Trading Index
Trading index is a ratio developed by Richard Arms in order to show how much volume is moving to advancing or declining stocks, and is calculated by following equation:
TRIN = (advancing issues / declining issues) / (volume of advancing / volume of declining issues)
If a ratio is greater than 1, it means that greater volume is moving to declining stock and is considered a bearish indicator, and if a ratio is lower than 1, it means that greater volume is moving towards advancing stocks and is considered bullish indicator.
Trading index is also called Arms index.
| Related Terms: Index Option |