MoonFlag

Volume Effectiveness

792 lượt xem
84
I have been trying to work with volume as an indicator for quite some time, as it holds qualities as a 'leading indicator'.
However, please note that any indicator which to some extent predict a future trend has its issues as it can be misleading.
But, in some datasets in a selected timeframe the leading properties of volume as an indicator are useful.

So this script is not too complicated. It shows a numeric which resembles the 'effectiveness of volume' in moving price.

For example, if a small volume creates a large price change - the Volume Effectiveness indicator will be high and show a spike
Whereas, if a large volume creates a small price change - the Volume Effectiveness indicator will be low

I used 3 metrics to represent Volume Effectiveness (these are different colors on the bar chart)
One price difference is the absolute(high - low) for each bar
Another is the absolute(open - close)
The 'open-close' is smaller than the 'high-low', so note this when viewing the bar charts

The final metric depends on if the open is greater than the close or vice-versa
But it considers the 'absolute( high-low )' and the difference between the open and the high (or low) and the close and the low (or high)
So the final metric is the largest of the 3 metrics and is generally the most useful of the 3 however, the other 2 are displayed to provide a better understanding of what 'Volume Effectiveness' displays

Note, I use absolute values so they are only positive, i.e. there are no negative values to represent a price drop within a bar

So, why is this indicator useful - its because volume is a leading indicator

A decreasing volume tends to suggest a price change is coming
Also, when the volume within a bar is very small, its Volume Effectiveness tends to go very high
That means a small trade volume creates a relatively large change in price
This is ideal conditions for a big pump (or big dump - although this indicator seems to work better before pumps)

A large spike in the Volume Effectiveness is commonly/sometimes preceding a big pump

So watch this indicator - and if there is a big spike - evaluate other market conditions to consider getting into position

Large spikes in the Volume Effectiveness can precede big price changes and therefore can provide a leading indication before a pump or dump

Timeframe is important - I found on the daily timeframe this indicator did not provide sufficient lead to be useful. Similarly on the <15min timeframe the spikes were not highly correlated with pumps/dumps

However, in medium timeframes (15mins, 1hour, 4hours) this indicator can be useful for predicting sizeable price changes.



Mã nguồn mở

Với tinh thần của TradingView, tác giả đã xuất bản tập lệnh theo mã nguồn mở, vì thế trader có thể dễ dàng hiểu và tùy chỉnh được. Bạn có thể sử dụng miễn phí, hoặc tùy chỉnh lại mã đã được cấp phép bởi Quy tắc Chung. Bạn có thể sử dụng nó trên biểu đồ.

Bạn muốn sử dụng tập lệnh này trên biểu đồ?

Bình luận

Interesting concept. Thanks for sharing.
Phản hồi
Note, this indicator is most accurate/useful towards the end time of bar, just before the start of the next bar. (The very start of a new bar is subject to massive spikes in 'Volume Effectiveness', because as time goes on the volume effectiveness within a bar reduces as more buy trades cancel sell trades.)
Phản hồi
Trang chủ Bộ lọc cổ phiếu Bộ lọc Forex Bộ lọc Tiền điện tử Lịch kinh tế Giới thiệu Tính năng Biểu đồ Trả phí Giới thiệu bạn Quy tắc Áp dụng Trung tâm Trợ giúp Giải pháp cho Website & Nhà môi giới Widget Giải pháp biểu đồ Thư viện Biểu đồ Lightweight Blog & Tin tức Twitter
Hồ sơ Tùy chỉnh Hồ sơ Tài khoản và Thanh toán Giới thiệu bạn Xu Ticket Hỗ trợ của tôi Trung tâm Trợ giúp Tin nhắn riêng Trò chuyện Đăng xuất