KLP Volume Price Change Oscillator

The KLP Volume Price Change Oscillator (KLPVPCOsc) is a custom technical indicator designed to evaluate price movements using algorithmic analysis.

It attempts to provide insights into market conditions as an oscillator, creating an enhanced RSI-like (Relative Strength Index) metric tailored to momentum analysis.
Key Features:

Percentile Analysis:

Measures the change in price over a specified length (default 14 bars).
Incorporates volume data to analyze momentum.

Dynamic Thresholds:

These levels help identify potential divergence points and confirm trend continuation or reversal.

Application:

This indicator is well-suited for intraday and swing trading, offering traders actionable insights into market momentum and potential reversals by:

Spotting Divergences:

Divergences between price and the oscillator (e.g., rising price with declining oscillator) may signal a weakening trend or impending reversal.

Assessing Volume-Driven Moves:

Highlights whether price changes are supportive, providing a better context for breakout and breakdown scenarios.

Confirming Momentum:

Crosses above 70 or below 30 can indicate overbought or oversold conditions, similar to traditional RSI interpretation.

How to Use:

Setup:

Apply the indicator to a chart with timeframes suitable for your trading strategy (e.g., 5-minute for intraday, daily for swing trades).
Adjust the length parameters (RSI Length and Volume Length) to align with market behavior and asset volatility.

Interpret Signals:

Use overbought and oversold levels as caution zones for potential trend reversals.
Look for divergences or sustained movement near thresholds to evaluate trade entry/exit points.

Combine with Other Indicators:

For best results, pair this oscillator with trend-following tools (e.g., moving averages) or volume-based indicators to validate signals.

This indicator is effective in identifying nuanced price movements and is especially helpful for traders focused on momentum.