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Better Volume Indicator

by Savio Rodrigues, 3478 days ago
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The Better Volume indicator uses a combination of bid/ask volume and range to identify
Volume Climax, High Volume Churn and Low Volume bars.
? Market tops are characterized by Volume Climax Up bars, High Volume Churn and Low
Volume Up bars (also called Testing).
? Market bottoms are characterized by Volume Climax Down bars, High Volume Churn
and Low Volume Down bars (Testing).
? Pullbacks, in either up or down trends, are similar to market topping or bottoming
patterns, but shorter in duration and with simpler volume patterns.
? The Better Volume indicator works in all markets and for all time frames - but is
particularly useful for tick charts.

You can figure out whether the Professionals are buying or selling by analyzing:
? Volume transacted at the bid or the ask
? High to low range of the bar, and
? Average trade size.
The Better Volume indicator improves on your typical volume histogram by coloring the
bars based on 5 criteria:
? Volume Climax Up - high volume, high range, up bars (red)
? Volume Climax Down - high volume, high range, down bars (white)
? High Volume Churn - high volume, low range bars (green, PaintBar blue)
? Volume Climax plus High Volume Churn - both the above conditions (magenta)
? Low Volume - low volume bars (yellow)
? When there are no volume signals the default histogram bar coloring is cyan

Volume Climax Up bars are identified by multiplying buying volume (transacted at the ask)
with range and then looking for the highest value in the last 20 bars (default setting).
Volume Climax Up bars indicate large volume demand that results in bidding up prices. The
default setting is to color the bars red.
Volume Climax Up bars are typically seen at:
? The start of up trends
? The end of up trends, and
? Pullbacks during down trends.
The beginning of an up trend is almost always marked by a Volume Climax Up bar. This
shows that the buyers are anxious to get on board and large volume enters the market and
bids up prices quickly. A valid breakout should be followed by more buying but occasionally
the low of the Volume Climax Up bar is tested.
Market tops are also characterized by Volume Climax Up bars often with High Volume
Churn and/or Low Volume test patterns. Changes in trend usually take a while to develop,
so don't be suckered in too soon - wait for the market to become exhausted. A useful
signal to watch for is the Low Volume bar - this shows that finally there is no demand and
the market is likely to stop advancing.
During a down trend, pullbacks are often characterized by Volume Climax Up bars. These
show short covering or traders calling a bottom too quickly. As soon as this Climax volume
declines the down trend is likely to resume. Continuation of the down trend is confirmed
when the low of the Volume Climax Up bar is taken out.

You can use this indicator to filter out your trades.

for more info u can check www.Emini-Watch.com

To display the better volume indicator with the different colors, type the following code:

BarColor = bettervolume(20);
a = ema(kst(), 20);
Plot(Volume, "Volume", colorBlack, ChartBar, StyleSymbolNone);
UpdateColor(BarColor == 0, colorYellow); // LowColor
UpdateColor(BarColor == 1, colorRed); // ClimaxUpColor
UpdateColor(BarColor == 2, colorWheat); // ClimaxDownColor
UpdateColor(BarColor == 3, colorGreen); // ChurnColor
UpdateColor(BarColor == 4, colorMagenta); // ClimaxChurnColor
UpdateColor(BarColor == 5, colorCadetBlue); // Neutral

This item requires the following indicator: KST indicator


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Type: Trading Indicator

Object ID: 470


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Market: All

Style:
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