Indicator: Relative Volume Indicator & Freedom Of Movement

Relative Volume Indicator
RVI is a support-resistance technical indicator developed by Melvin E. Dickover. Unlike many conventional support and resistance indicators, the Relative Volume Indicator takes into account price-volume behavior in order to detect the supply and demand pools. These pools are marked by "Defended Price Lines" ( DPLs ), also introduced by the author.

RVI is usually plotted as a histogram; its bars are highlighted (black, by default) when the volume is unusually large. According to the author, this happens if the indicator value exceeds 2.0, thus signifying that a possible DPL is present.

DPLs are horizontal lines that run across the chart at levels defined by following conditions:

* Overlapping bars: If the indicator spike (i.e., indicator is above 2.0 or a custom value)
corresponds to a price bar overlapping the previous one, the previous close can be used as the
DPL value.

* Very large bars: If the indicator spike corresponds to a price bar of a large size, use its
close price as the DPL value.

* Gapping bars: If the indicator spike corresponds to a price bar gapping from the previous bar,
the DPL value will depend on the gap size. Small gaps can be ignored: the author suggests using
the previous close as the DPL value. When the gap is big, the close of the latter bar is used

* Clustering spikes: If the indicator spikes come in clusters, use the extreme close or open
price of the bar corresponding to the last or next to last spike in cluster.

DPLs can be used as support and resistance levels. In order confirm and refine them, RVI is used along with the FreedomOfMovement indicator discussed next.

Freedom of Movement Indicator
FOM is a support-resistance technical indicator, also by Melvin E. Dickover. FOM is the ratio of relative effect (relative price change) to the relative effort (normalized volume ), expressed in standard deviations. This value is plotted as a histogram; its bars are highlighted (black, by default( when this ratio is unusually high. These highlighted bars, or "spikes", define the positioning of the DPLs .

Suggestions for placing DPLs are the same as for the Relative Volume Indicator discussed above.

Note that clustering spikes provide the strongest DPLs while isolated spikes can be used to confirm and refine those provided by the Relative Volume Indicator. Coincidence of spikes of the two indicator can be considered a sign of greater strength of the DPL .

More info:
S&C magazine, April 2014.

I am still trying these on various instruments to understand the workings more. Don't forget to share what you learn -- any use cases / ideal scenarios / gotchas, would love to hear them all.

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// @author LazyBear
// If you use this code in its orignal/modified form, do drop me a note. 
study("Relative Volume Indicator [LazyBear]", shorttitle="RVI_LB")
x= input(60, "Standard deviation length")
y= input(2, "Number of deviations")
allowNegativePlots=input(false, type=bool)
matchVolumeColor=input(false, type=bool)

av= sma(volume, x)
sd= stdev(volume, x)
relVol= iff(sd!=0, (volume-av)/sd, 0)
relV = allowNegativePlots == false ? max(relVol, 0) : relVol
b_color=matchVolumeColor ? (close>open ? green : red) : black

plot(relV, style=histogram, color=relV > y ? b_color : gray, linewidth=4)