1. Market Breadth: Introduction
  2. Market Breadth: Volume Studies
  3. Market Breadth: 52-Week Highs/Lows
  4. Market Breadth: Advance/Decline Indicators
  5. Market Breadth: Point & Figure Internal Indicators
  6. Market Breadth: Conclusion


This directory on market breadth introduces traders to how they can gain an advantage in the market, but it will take time to master the movements of each individual indicator. Try following two or three internal indicators every day instead of trying to master them all. Many of the indicators overlap, so find the ones that work for your personal trading style and focus on those. Always rely first on the price data of the vehicle you're trading, and then check that the internal indicators reinforce your position.

Here is an overview of the main points we dealt with in this tutorial on market breadth:

  • Internal indicators measure market breadth, which refers to the amount of force and the level of participation behind market moves.
  • The most common data used to build internal indicators are volume, advance/decline and new highs/lows.
  • Strong volume in the day's winners indicates buyers are winning the day, and vice versa.
  • Advance/decline data gives traders a look into how many different companies are taking part in a rally or decline. The more companies taking part, the broader the move.
  • New highs or lows for a company indicate exceptionally positive or negative feelings toward its performance. If many stocks are making new highs or lows, movements in the broad market should mirror that sentiment.
  • Point-and-figure charting, by removing the time element from the chart and recording only larger price moves, helps filter out market noise.
  • Internal indicators are most useful when used in conjunction with a price chart.
  • Market breadth should never be used to rationalize an otherwise bad trade. The price action trumps everything else when it hits a stop-loss.
  • Internal indicators are used to confirm price moves in a given market, and they should generally print the same shape as the underlying price chart, making highs and lows near the same date.
  • An important warning signal is given when an internal indicator diverges from the direction of the market in question, indicating that a price move is not widely supported by market participants.
  • A reversal occurring when an internal indicator is in an overbought or oversold condition may mean fast moving price changes are ahead.

Related Articles
  1. Trading

    Market Breadth: A Directory Of Internal Indicators

    Discover the indicators that measure the force of the bulls and bears, telling you what a simple price chart cannot.
  2. Trading

    Discovering the Absolute-Breadth Index and the Ulcer Index

    It's time to acquaint yourself with these lesser-known yet effective technical indicators.
  3. Trading

    Using Technical Indicators To Develop Trading Strategies

    Unfortunately, there is no perfect investment strategy that will guarantee success, but you can find the indicators and strategies that will work best for your position.
  4. Investing

    What The Market Open Tells You

    The first few moments of trading provide a lot of information. If a trader analyzes this information, it can give a lot of insight into the market's moves for the day.
  5. Trading

    The Top Technical Indicators For Options Trading

    Options traders have to pay attention to more indicators than your average stock trader does, including volatility, direction, and duration.
  6. Trading

    4 Key Indicators That Move The Markets

    Find out what reports to watch in order to anticipate and react to market movements.
  7. Investing

    How to Use Trading Indicators Effectively

    Careful and effective use of technical indicators can improve your odds of finding an investment’s best entry and exit points.
  8. Trading

    Trading Around Key Options Indicators

    Learn the key economic indicators to help predict market movement.
Frequently Asked Questions
  1. What are Some Examples of Free Market Economies?

    Learn which of the world's economies best resemble free market economies, marked by free trade, low government involvement, ...
  2. Who Decides When to Print money in India?

    Find out the role of the Reserve Bank of India, or RBI, and the amount of authority given to the government. Learn who is ...
  3. What is the Difference Between a Forward Rate and a Spot Rate?

    Learn about spot and forward contracts, how spot and forward rates are used for spot and forward contracts, and the difference ...
  4. What are Some Examples of Stratified Random Sampling?

    Learn what simple random sampling and stratified random sampling are, some examples of stratified random samples, and how ...
Trading Center