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Best Market Breadth indicator on an online trading platform

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Let’s say the stock market went up. Can you look at the ticker, candlestick chart or indicators like MACD and tell how many of the underlying stocks went up to contributed to the rise? The answer is no.

To understand the market breadth, you need an indicator which gives you specific details of how many stocks went up and down. It gives you a wider perspective of what is happening at the ground level across the listed scrips on the stock exchange.

Advance Decline Ratio – It is among the most popular internal technical indicators. It shows you a percentage and ratio of how many stocks went up in the market in comparison to the ones that went down. With this, you can know if the rally was broad-based or just restricted to a few scrips that did well. This information is the basis of deciding the wider performance of the stock market and is not restricted to indices like Nifty, Bank Nifty, Midcap 50 etc. For instance, if the Advance Decline ratio is negative for a week and a bunch of blue chip stocks continue to make new highs during that time it means that the market is overall bearish. One can analyze this information in several ways depending upon your approach. It tells you if money is flowing in or out of the stock market during the day. It is considered as the most reliable sentiment indicator.

Learn how to use it:

Fyers One Market breadth 0

You can find Market Breadth under “Tools” in the main menu as shown in the image above.

Fyers One Market breadth 1

You can see that the tool has a column for the Trend, Number of stocks, traded volumes & turnover. You can get to know the total number of stocks that have gone up, down and ones which haven’t changed from the previous day’s close. The colour codes add to the visual convenience of the tool.
In the Volume and Turnover columns, you get a percentage calculation of Advances and Declines. You can easily get to know how much volume is behind the buying and selling.

Fyers One Market breadth 2

Similarly, you can also get the same data for NSE Futures Segment. As you can see it shows you the total number of scrips available in the Futures in NSE as 180 (Total Number of Stocks that have derivatives contracts). The total traded volumes for Futures are more than the equity segment because of the leverage present in futures trading. At the right-hand side of the bottom, you can see the Advance Decline Ratio of all the scrips in the Futures Segment. If you compare it with the equity segment of the stock market, you can clearly see that the FNO scrips have outperformed for the day.

You can analyse Advance Decline ratio for stocks in different circumstances. We will need to write another post to explain it in depth. Professional traders use it for technical analysis as no other indicator gives you such widespread information on all stocks. Fyers One is our unique in-house trading platform which is designed to give you that extra edge that is needed to succeed in trading. We’ll write more posts on how to use the available features, stay tuned.

Tejas Khoday

Tejas Khoday

Tejas is the Co-Founder & CEO at FYERS, the youngest team to get NSE’s broker license. He has a specialization in finance and has over 10 years of work experience spanning across proprietary trading, risk management, and broking. Tejas & his team started FYERS, a technology-focused brokerage as a mission to transform the trading/investment landscape in India.

10 Comments

  • Avatar Amarpeet says:

    I was using spider software before but yours is free. How you plan to make money?

    • Tejas Khoday Tejas Khoday says:

      Hey, yes it’s free! Our income is based on the number of transactions. it’s pretty straight forward.

  • Avatar Akhilesh says:

    Mr. Tejas I am from Rajajinagar Bangalore. Can I have the opportunity to meet you personally at your office? We are looking for sub-brokership of your prestigious company.

    • Tejas Khoday Tejas Khoday says:

      Hi Akilesh, Got feedback that you’re in touch with Rahul at our office. Come on over. We’d like to learn about your business plan. Request you to write to me at tejas@fyers.in to fix a convenient time.

  • Avatar Madhav says:

    Hello,
    Hope Fyers will bring now storm in Indian stock market. My question is:
    1. What extent Algo trading is profitable when compared to traditional method? Will FYers allow Algo trading? and is it feasible for retail traders.
    2. Do have BTST (By today sell tomorrow) in equity trading?

    Thank you.

    Madhav

    • Tejas Khoday Tejas Khoday says:

      Madhav, We’re doing our best to change things for the better.
      1. The profitability of algo trading depends on your strategy.
      You cannot compare it to traditional methods because even those depend on execution.
      We have a trading platform which can assist you in understanding markets efficiently.
      Trading strategies will have to be modified in algo trading depending on markets.
      And yes, it is feasible for retail traders if it is semi-automated.
      2. BTST is a basic product, we do have it.

  • Avatar Prateek says:

    How should i use this during trading?

    • Tejas Khoday Tejas Khoday says:

      Let’s say you’re really bearish on the NIFTY and the advance decline ratio is 1.5,
      It is best not to go short as you will be against the trend. Market breadth indicators
      don’t give you specific trade ideas but just represent the overall sentiment prevailing
      on a particular day. It is best not go against it. In the sense, if you short when the ratio
      is very high, you’re likely to end up losing money because you’re against the trend.
      It does give you a broad indication. You can use this to filter stocks accordingly.

  • Avatar Stalin Johnson says:

    I understood the concept of the market breadth meter, but can you please tell me how to make use of this in my technical Analysis? I am new to trading and I wanted to know more. Can you help me with this?

    • Tejas Khoday Tejas Khoday says:

      Stalin, advance declines help you track the broader sentiment of the market which is
      otherwise not possible by just observing charts. For instance, when most stocks are going down on a particular day,
      it is unlikely that a stock trend will reverse and go up to its potential unless the advance decline ratio changes.
      So if you are bullish and the advance decline ratio is falling hard, its best to stay away and wait..

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