The Arms Index, also known as the TRIN (TRaders INdex) is a popular technical analysis indicator used by stock traders, and stock index futures traders.
The TRIN has four components.

1. New York Stock Exchange (NYSE) advancing issues.
   
2. NYSE declining issues.
   
3. NYSE advancing volume.
   
4. NYSE declining volume.
   

The formula for the TRIN is given below: [Advancing Issues / Declining Issues] / [Advancing Volume / Declining Volume] This formula returns a neutral value of 1, a bearish value greater than 1, and a bullish value less than 1.
Therefore, the TRIN moves inversely to price action.
Rather than interpreting the TRIN by stating that the TRIN is above 1, therefore the market is bearish, most traders interpret the trend of the TRIN.
For example, if the TRIN is currently .
7, but the TRIN is rising, that would be considered bearish even though the TRIN indeed is below 1.
A price chart with the TRIN visually illustrates this phenomenon.
Similarly, a TRIN reading above 1 would not necessarily be considered bearish, if the TRIN was trending lower.
To illustrate, the TRIN could be 2 (an extreme bearish reading) but nevertheless could be trending down.
If prices, in turn were heading back upwards, then the combination of a decreasing TRIN and increasing price action would be labeled as bullish.
A similar indicator to the TRIN is the Market Thrust indicator.
The formula for Market Thrust is given next: [Advancing Issues x Advancing Volume] - [Declining Issues x Declining Volume] The Arms Index (TRIN) is a heavily used technical indicator measuring the overall health and strength of the market as a whole.
The TRIN can help a trader stay on the correct side of the market, giving the trader an edge.