What Is the Intraday Intensity Index?

The Intraday Intensity Index is a volume-based technical indicator that integrates volume with a security’s price. Traders can use the Intraday Intensi🀅ty Index to follow how intraday highs and lows are moviꩵng with volume in comparison to the previous day’s closing price.

How the Intraday Intensity Index Works

The Intraday Intensity Index was developed by Dave Bostian. It is one of several indicators that can be used to follow how volume is influencing a 澳洲幸运5开奖号码历史查询:security’s price. It provides a continuous volume-focused indicator by using a security’s most recent close, high, and low in its calculation while also 澳洲幸运5开奖号码历史查询:factoring in volume.

Formula for the Intraday Intensity Index

The♉ Index level is derived from the following calculation꧂:

$\begin{aligned} &\text{Intraday Intensity Index} = \frac{ (\text{Close} \times 2) - \text{High} - \text{Low} }{ (\text{High} - \text{Low}) \times \text{Volume} } \\ &\textbf{where:}\\ &\text{Close} = \text{Most recent closing price} \\ &\text{High} = \text{Intraday high price} \\ &\text{Low} = \text{Intraday low price} \\ &\text{Volume} = \text{Number of shares sold intraday} \\ \end{aligned}$​Intraday Intensity Index=(High−Low)×Volume(Close×2)−High−Low​where:Close=Most recent closing priceHigh=Intraday high priceLow=Intraday low priceVolume=Number o🔜f shares sold intraday​

The numerator subtracts the security's high and low from two times the most recent 澳洲幸运5开奖号码历史查询:closing price. The denominator multiplies volume times the difference between the security's high and low trading price. Overall, the security's intraday highs and lows become important factors driving the index's value when they move above the closing price with increased volume.

Reading the Intraday Intensity Index

Generally, in the index's calculation, when the intraday highs and lows move above the closing price with volume, then the index will move sharply toward negative territory. Thus, the Intraday Intensity Index can help identify significant price changes caused by volume. Since high volume is typically driven by institutional trades, it can also be considered a means for following how institutional investment is affecting price.

The Intraday Intensity Index is typically available through advanced charting software. It is usually followed in a chart window below a 澳洲幸运5开奖号码历史查询:candlestick chart. Often it will also be an overlay against volume. Many traders use the Intraday Intensity Index in conjunction with 澳洲幸运5开奖号码历史查询:Bollinger Bands or other envelope channels since substantial movement in the Intraday Intensity Index can help to support trading plans around a security's resistance and support trendlines.

Chaiken's Money Flow

Chaiken’s Money Flow indicator uses the Intraday Intensity Index in its calculation. It follows the sum of the Intraday Intensity Index over a specified time period in compaﷺrison to the sum of volume. Its calculation is as follows:

$\begin{aligned} &\text{Chaiken's Money Flow} = \frac{ \sum_{i=1}^{21} \text{Intraday Intensity Index}_i }{ \sum_{i=1}^{21} \text{Volume}_i } \\ &\textbf{where:}\\ &\text{Numerator} = \text{Sum of 21 periods of Intraday Intensity Index} \\ &\text{Denominator} = \text{Sum of 21 periods of total volume} \\ \end{aligned}$​Chaiken’s Money Flow=∑i=121​Volumei​∑i=121​Intraday Intensity Indexi​​where:Numerator=Sum🌠 of 21 periods🦄 of Intraday Intensity IndexDenominator=Sum&𒀰nbsp;of 21 period𒀰s of total volume​

The Bottom Line

The Intraday Intensity Index, used in technical analysis, signals to traders how the price of a security moves in relation to volume𒊎. Used with other technica😼l indicators, it can help traders know when to execute buy and sell orders.