Volume Pressure Histogram (Normalized)

Overview

The Volume Pressure Histogram is designed to help traders analyze buying and selling pressure using real volume data.

Unlike traditional momentum indicators that rely solely on price movements, VPH measures the strength of bullish and bearish volume, providing insights into market participation.

How It Works

The histogram represents the difference between buying and selling volume over a selected period.

Green bars indicate strong buying pressure, while red bars signal strong selling pressure.
Lime and orange bars (if enabled) represent moderate buying and selling activity.

A white signal line smooths volume data to track momentum shifts over time.
How to Use It

Trend Confirmation: When price is rising and green bars increase, the trend is supported by real buying pressure.

Reversal Detection: If price makes a new high but green bars shrink, buyers may be losing strength.

Breakout Strength: A breakout with rising volume pressure confirms strong participation, while weak volume pressure suggests a potential fake move.

Divergence Signals: If price moves higher, but volume pressure declines, the move may lack conviction and could reverse.

Customization Options

Threshold Multiplier (default = 20) controls when green and red bars appear, filtering out weaker signals.

Log Scale Option helps normalize extreme volume spikes.

Adjustable Smoothing Length for both the histogram and signal line.

Why Use This Indicator

Provides a volume-based approach to analyzing market trends.

Can confirm or contradict price movements, helping identify strong or weak trends.

Works across multiple markets, including stocks, forex, crypto, and indices.

This indicator is designed for educational and informational purposes only and does not provide financial advice.