The Arms Index, also known as the Short-Term Trading Index (TRIN) is a technical analysis indicator that compares the number of advancing and declining stocks (AD Ratio) to the volume of advancing and declining volumes (AD volume). It measures market sentiment in general. Richard W. Arms, Jr. invented the indicator in 1967, and it indicates the relationship between market supply and demand. It is used to predict future price changes in the market on a day-to-day basis, particularly on an intraday basis. Overbought and oversold levels are generated, which indicate when the index (and most of the stocks in it) will reverse direction.The TRIN can be used to identify buying or selling opportunities during specific periods throughout the day; however, because it relies heavily on Volume data which can be manipulated through high-frequency trading practices, its accuracy has been questioned in recent years. Despite this criticism though, many traders still use The Arms Index as a supplemental tool to help them make informed investment decisions
