Volume Flow Confluence

10 thg 11, 2024

Volume Flow Confluence (CMF-KVO Integration)


Core Function:


The Volume Flow Confluence Indicator combines two volume-analysis methods: Chaikin Money Flow (CMF) and the Klinger Volume Oscillator (KVO). It displays a histogram only when both indicators align in their respective signals.

Signal States:


• Green Bars: CMF is positive (> 0) and KVO is above its signal line
• Red Bars: CMF is negative (< 0) and KVO is below its signal line
• No Bars: When indicators disagree

Technical Components:


Chaikin Money Flow (CMF):
Measures the relationship between volume and price location within the trading range:
• Calculates money flow volume using close position relative to high/low range
• Aggregates and normalizes over specified period
• Default period: 20

Klinger Volume Oscillator (KVO):
Evaluates volume in relation to price movement:
• Tracks trend changes using HLC3
• Applies volume force calculation
• Uses two EMAs (34/55) with a signal line (13)

Practical Applications:


1. Signal Identification
- New colored bars after blank periods show new agreement between indicators
- Color intensity differentiates new signals from continuations
- Blank spaces indicate lack of agreement

2. Trend Analysis
- Consecutive colored bars show continued indicator agreement
- Transitions between colors or to blank spaces show changing conditions
- Can be used alongside other technical analysis tools

3. Risk Considerations
- Signals are not predictive of future price movement
- Should be used as one of multiple analysis tools
- Effectiveness may vary across different markets and timeframes

Technical Specifications:

Core Algorithm

CMF = Σ(((C - L) - (H - C))/(H - L) × V)n / Σ(V)n
KVO = EMA(VF, 34) - EMA(VF, 55)
Where VF = V × |2(dm/cm) - 1| × sign(Δhlc3)
Signal Line = EMA(KVO, 13)

Signal Logic
Long: CMF > 0 AND KVO > Signal
Short: CMF < 0 AND KVO < Signal
Neutral: All other conditions
Parameters

CMF Length = 20
KVO Fast = 34
KVO Slow = 55
KVO Signal = 13
Volume = Regular/Actual Volume

Data Requirements

Price Data: OHLC
Volume Data: Required
Minimum History: 55 bars
Recommended Timeframe: ≥ 1H

Credits:

• Marc Chaikin - Original CMF development
• Stephen Klinger - Original KVO development
• Alex Orekhov (everget) - CMF script implementation
• nj_guy72 - KVO script implementation

17 thg 3

Phát hành các Ghi chú

The Volume Flow Confluence Indicator has been enhanced with a new toggle feature that gives traders more control over signal visualization:

Added an "Initial Signals Only" toggle that, when enabled, displays only the first bar where both CMF and KVO indicators come into agreement. This helps traders focus specifically on new trend changes and filter out continuing signals that might create visual noise.

When this toggle is disabled (default setting), the indicator behaves as in the original version, showing all periods of confluence with color intensity variation to distinguish between new and continuing signals.

This enhancement makes the indicator more versatile for different trading styles - whether you prefer to see the complete duration of confluence periods or only want to be alerted to the initial breakout moments where volume flow patterns first align.

17 thg 3

Phát hành các Ghi chú

Added custom timeframe support to the Volume Flow Confluence Indicator. Users can now select any timeframe for analysis independently of the chart's current timeframe. This enhancement enables traders to identify volume flow patterns across multiple timeframes from a single chart view, allowing for more comprehensive market analysis without switching between different chart periods.