Arms Index

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Definition: Arms Index



What is the dictionary definition of Arms Index?

Dictionary Definition


The ARMS Index is considered by many technical analysts to be one of the most useful indicators for determining market breadth. The ARMS Index uses stock exchange advancing/declining issues as well as advancing/declining volume to produce an indicator that identifies short-term overbought and oversold market conditions. The ARMs Index is typically used for trading the NYSE and Nasdaq but may be applied to any exchange.  It was invented by Richard Arms in 1967.


Full Definition of Arms Index


Arms Index is a mathematic market meter designed to communicate the relationship between upward and downward moving stock prices and trading volumes. Arms Index is a technical analysis indicator. Created in the late sixties by Richard Arms, the Arms Index was intended to calculate the relationship between advancing and declining averages. Namely, the Arms Index illustrates the interaction of advancing and declining issues with advances and declines of absolute volumes. Hence, the Arms Index measure can be arrived at by dividing the ratio of advance/decline issues by the ratio of total upside to downside volume. A low Arms Index reading (i.e. below .95) is considered bearish while a high Arms Index reading (i.e. above 1.65) is considered bullish. Arms Index is a short-term market figure also known as TRIN (TRading INdex).

The index is calculated by dividing the Advance/Decline Ratio by the Advance/Decline Volume Ratio


Synonyms For Arms Index


Short Term Trading Index, TRIN

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Definition Sources


Definitions for Arms Index are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd March, 2020 | 1 Views.