TRIN: the Arms index
Lesson 6 · about 9 min
TRIN (the Trading Index, also called the Arms index after Richard Arms, who published it in 1967) combines the two things you have just learned, advancers vs decliners and up volume vs down volume, into one ratio. It is old, slightly counterintuitive, and still useful once you understand what it is comparing.
The formula
TRIN = (advancers ÷ decliners) ÷ (up volume ÷ down volume)
Or equivalently: the advance-decline ratio divided by the up-down volume ratio.
Work an example. Advancers 1,800, decliners 1,000, up volume 600 million shares, down volume 200 million.
- A/D ratio = 1,800 ÷ 1,000 = 1.8
- Volume ratio = 600 ÷ 200 = 3.0
- TRIN = 1.8 ÷ 3.0 = 0.60
TRIN below 1.0 means volume is more lopsided toward the advancers than the count of advancers alone would suggest. Each advancing stock is attracting more volume than each declining one. That is bullish volume concentration.
Now the reverse. Advancers 1,000, decliners 1,800, up volume 300 million, down volume 700 million.
- A/D ratio = 0.556
- Volume ratio = 0.429
- TRIN = 0.556 ÷ 0.429 = 1.30
Above 1.0: volume is flowing into decliners faster than the count of decliners implies. Bearish volume concentration.
The counterintuitive part
TRIN moves inversely to the market. Low is bullish, high is bearish. New readers get this backwards for weeks, so a table:
| TRIN | Meaning | Typical context |
|---|---|---|
| Below 0.50 | Extreme buying pressure | Trend-up days, squeezes |
| 0.50 to 0.80 | Strong buying | Good up days |
| 0.80 to 1.20 | Roughly balanced | Most sessions |
| 1.20 to 2.00 | Strong selling | Bad down days |
| 2.00 to 3.00 | Heavy selling, often near-term washout | Sharp declines |
| Above 3.00 | Panic; historically often close to a short-term low | Crash days, capitulation |
A second oddity: TRIN is a ratio of ratios, so it is not symmetric. A reading of 0.5 and a reading of 2.0 are "equal and opposite" in log terms, not 0.5 and 1.5. Some traders plot it on a log scale for that reason. And because the denominator can get very small on lopsided days, the upside is unbounded (readings of 5 or 10 occur in crashes) while the downside is floored at zero.
Key idea: TRIN compares volume concentration to breadth. Below 1 means volume is chasing the advancers, above 1 means volume is chasing the decliners. It reads inversely to price, and extreme highs have historically clustered near short-term lows.
What TRIN adds that ADD and VOLD do not
You might reasonably ask why you need TRIN if you already watch ADD and VOLD. Two reasons.
It flags disagreement in one number. The interesting sessions are the ones where breadth and volume disagree: many stocks up but volume going into the few that are down, or the reverse. ADD and VOLD show that as two lines you have to compare; TRIN shows it as a reading far from 1.0 on a day when ADD is near zero.
| ADD | UVOL/DVOL | TRIN | Read |
|---|---|---|---|
| +1,500 | 4.0 | ~0.55 | Broad and funded; everything agrees |
| +1,500 | 1.2 | ~1.8 | Broad but volume is in the losers. Suspicious rally |
| −200 | 3.5 | ~0.25 | Few winners taking all the volume. Narrow squeeze |
| −1,500 | 0.25 | ~1.9 | Broad and funded selling; everything agrees |
The second and third rows are the ones worth a second look, and TRIN is what makes them jump out.
It has a long history at the daily close. Closing TRIN readings above 2.0, and especially above 3.0, have a decades-long record of appearing near short-term lows, because they mark the moment the last holders sell into whatever bid exists. That is not a reason to buy on the print; it is a reason to expect a bounce attempt within a few sessions and to be careful about chasing shorts after the print.
Intraday behaviour
Intraday TRIN is jumpier than the daily close because the ratios are computed on partial volume. Early in the session a few large prints can swing it wildly; by 10:30 it usually settles. Read it as a level with a direction:
Trend-up day: TRIN 0.9 → 0.7 → 0.6 → 0.55 (falling through the day)
Trend-down day: TRIN 1.1 → 1.4 → 1.8 → 2.2 (rising through the day)
Chop day: TRIN 0.8 → 1.1 → 0.9 → 1.0 (wandering around 1)
Reversal day: TRIN 2.4 at 10:30 → 1.3 by 14:00 (extreme that unwinds)
The reversal-day pattern is the one worth memorising. A very high morning TRIN that starts falling while ADD stops making new lows is the internals picture of a washout finding a bid.
Failure modes
- Trading the number alone. TRIN 0.4 on a Friday afternoon rebalance means nothing. Pair it with ADD and TICK.
- Assuming symmetry. 0.5 is a stronger reading than 1.5 in the opposite direction.
- Treating 3.0 as a buy signal. It is a warning that the decline is getting climactic. Lows are made by price, not by TRIN.
- Mixing exchanges. NYSE TRIN and Nasdaq TRIN are different series and can disagree on sector-driven days.
Try it: Compute TRIN by hand from the closing NYSE advancers, decliners, up volume and down volume for the last five sessions (most financial sites publish the four inputs daily). Compare your number to the published TRIN close to confirm you have the formula the right way up. Then note which sessions closed near their high or low and see whether TRIN agreed.
Recap
- TRIN = (advancers ÷ decliners) ÷ (up volume ÷ down volume).
- It reads inversely: below 1.0 is bullish volume concentration, above 1.0 bearish.
- It is asymmetric: floored at zero, unbounded above, so 0.5 and 2.0 are the fair pair, not 0.5 and 1.5.
- Its value is flagging disagreement between breadth and volume in one number, and marking climactic selling at the daily close.
- Extreme highs cluster near short-term lows historically, but the low is made by price, not by the print.