Confirmation is an important part of our alerts. Naively, if a stock trades at $10.00, then trades at $11.00, this is probably interesting. If you look at the volatility of the stock, you will have a better idea of how quickly the stock price must move before it is considered interesting. But important question is, how do you know the price change was real? How do you know it was not a fluke?
We use the term “confirmed by volume”, or just “(confirmed)” for short, to describe our strongest form of confirmation. This says that there was a significant amount of volume at the given price levels, and that’s how we know that the trend is real. This allows us to throw away some prints if the price does not appear correct.
Volume confirmation comes at a cost. If the price was $10.00, then we see a print at $11.00, we cannot immediately report on this sudden change. Many of our volume confirmed alerts have “fast”, “short term” or “unconfirmed” counterparts. These make less use of volume and more use of other factors, like the bid and ask or the spread to confirm a trend. These react to the market faster, but may report more noise.
Many alerts, such as the crossed above 200 day moving average alert, are always confirmed by volume. The 200 day SMA exists on a very long time scale. There is no reason to try to create a faster version of an alert which deals with this technical level.
We offer the following alert types which are related to this topic. Click on the icon for a detailed description of the alert, or click on the example link for additional samples of each type of alert.