Buying/Selling Pressure

Buying/Selling Pressure - Volume-Based Market Sentiment

Buying/Selling Pressure identifies market dominance by separating volume into buying and selling components. The indicator uses Volume ATR normalization to create a universal pressure oscillator that works consistently across all markets and timeframes.


What is Buying/Selling Pressure?

This indicator answers a fundamental question: Are buyers or sellers in control? By analyzing how volume distributes within each bar, it calculates cumulative buying and selling pressure, then normalizes the result using Volume ATR for cross-market comparability.

Formula: [(Cumulative Delta - EMA(Cumulative Delta)) / Volume ATR] × 100

Where Delta = Buying Volume - Selling Volume


Calculation Methods

Money Flow (Recommended):
Volume weighted by close position in bar range. Close near high = buying pressure, close near low = selling pressure.
Formula: [(close - low) - (high - close)] / (high - low)

Simple Delta:
Basic approach where bullish bars = 100% buying, bearish bars = 100% selling.

Weighted Delta:
Volume weighted by body size relative to total range, focusing on candle strength.


Key Features

• Volume ATR Normalization: Adapts to volume volatility for consistent readings across assets
  
• Cumulative Delta: Tracks net buying/selling pressure over time (similar to OBV)
  
• Signal Line: EMA smoothing for trend identification and crossover signals
  
• Zero Line: Clear visual separation between buyer and seller dominance
  
• Color-Coded Display: Green area = buyers control, red area = sellers control
  

Interpretation

Above Zero: Buyers dominating - cumulative buying pressure exceeds selling
Below Zero: Sellers dominating - cumulative selling pressure exceeds buying
Cross Signal Line: Momentum shift - pressure trend changing direction
Increasing Magnitude: Strengthening pressure in current direction
Decreasing Magnitude: Weakening pressure, potential reversal


Volume vs Pressure

High volume with low pressure indicates balanced battle between buyers and sellers. High pressure with high volume confirms strong directional conviction. This separation provides insights beyond traditional volume analysis.


Best Practices

• Use with price action for confirmation
  
• Divergences signal potential reversals (price makes new high/low but pressure doesn't)
  
• Large volume with near-zero pressure = indecision, breakout preparation
  
• Signal line crossovers provide momentum change signals
  
• Extreme readings suggest potential exhaustion
  

Settings

• Calculation Method: Choose Money Flow, Simple Delta, or Weighted Delta
  
• EMA Length: Period for cumulative delta smoothing (default: 21)
  
• Signal Line: Optional EMA of oscillator for crossover signals (default: 9)
  

Buying/Selling Pressure transforms volume analysis into actionable market sentiment, revealing whether buyers or sellers control price action beneath surface volatility.

This indicator is designed for educational and analytical purposes. Past performance does not guarantee future results. Always conduct thorough research and consider consulting with financial professionals before making investment decisions.