Volume-Weighted Trend Strength index

28 thg 9, 2024

Volume-Weighted Trend Strength index (VWTSI)

Introduction

The VWTSI is a custom indicator designed to combine trend strength, volume, and volatility to give traders a comprehensive view of market dynamics. It provides flexibility by allowing you to visualize the indicator as either an oscillator or a moving average.

Features

1. Dual Visualization: Can be displayed either as an oscillator or as a moving average on the chart.
   
   
2. Volume-Weighted: Adjusts trend strength based on current volume compared to its average.
   
   
3. Volatility-Adjusted: Incorporates market volatility into the trend strength calculation.
   
   
4. Customizable: Various parameters can be fine-tuned to suit different trading environments.
   
   

How It Works

1. Trend Strength Calculation
The difference between the fast (10-period) and slow (30-period) EMAs is used to calculate trend strength, which gives a percentage-based indication of the trend's strength

2. Volatility Adjustment
The ATR-based volatility is calculated and used to amplify or reduce the trend strength based on the current market conditions

3. Volume Adjustment
The ratio of current volume to the volume SMA adds another layer of adjustment to the final VWTSI value

4. Final VWTSI Calculation
The VWTSI value is the product of trend strength, volatility factor, and volume ratio

5. Normalization
The final VWTSI is normalized to fit within a range of -100 to 100 for better visualization in oscillator mode

Customization Inputs

1. Fast EMA Length: Default is 10.
   
2. Slow EMA Length: Default is 30.
   
3. Volume Length: Default is 14.
   
4. Volatility Length (ATR): Default is 20.
   
5. Oscillator or MA Mode: Toggle between displaying the indicator as an oscillator or moving average.
   

30 thg 9, 2024

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