The Volume Oscillator is a powerful tool for analyzing volume dynamics and identifying potential divergences and trend confirmations. This indicator combines multiple volume analysis techniques to provide a comprehensive view of market participation and potential turning points.
At its core, the Volume Oscillator calculates a custom volume delta, taking into account the true range of each candle. The volume delta is adjusted based on the relationship between the open and close prices, assigning a higher weight to the candle body when the close is higher than the open. This approach captures the nuances of buying and selling pressure within each candle.
The cumulative volume delta is then calculated using one of three user-selectable methods: On-Balance Volume (OBV), Cumulative Volume Delta (CVD), or Price-Volume Trend (PVT). These options allow traders to choose the volume accumulation method that best suits their analysis style.
The Volume Oscillator plots the difference between two exponential moving averages (EMAs) of the selected cumulative volume. The short-term EMA length and long-term EMA length can be customized by the user, providing flexibility to adapt to different trading timeframes and market conditions.
A key feature of this indicator is the divergence detection. It identifies bullish and bearish divergences between the Volume Oscillator and price action. Bullish divergence occurs when the oscillator forms a higher low while the price forms a lower low, suggesting potential buying pressure. Conversely, bearish divergence occurs when the oscillator forms a lower high while the price forms a higher high, indicating potential selling pressure. The divergence detection algorithm uses a configurable lookback range and pivot point detection to improve the accuracy of divergence signals.
The indicator also incorporates a signal line, which is an EMA of the Volume Oscillator. Crossovers between the Volume Oscillator and the signal line provide additional confirmation of potential trend changes. Bullish crossovers occur when the oscillator crosses above the signal line, while bearish crossovers occur when the oscillator crosses below the signal line.
To enhance the reliability of crossover signals, the indicator utilizes deviation bands based on the average volume delta. Bullish crossovers are confirmed when the signal line is below the lower deviation band, and the Volume Oscillator is negative. Bearish crossovers are confirmed when the signal line is above the upper deviation band, and the Volume Oscillator is positive.
The Volume Oscillator employs a dynamic color scheme to visually represent the strength and direction of the oscillator. The color gradually changes based on the normalized gradient between two colors, providing an intuitive view of the oscillator's momentum.
Customization options include:
- Short and long EMA lengths for the Volume Oscillator calculation
- Cumulative volume type (OBV, CVD, or PVT)
- Signal line length
- Divergence detection parameters (lookback range and pivot point settings)
This indicator is designed to be used in conjunction with other technical analysis tools and should not be relied upon as a standalone trading system. It is intended to provide insights into volume dynamics and potential trend changes, aiding in the decision-making process for professional traders.
Please note that this indicator is a complex tool that requires a solid understanding of volume analysis and technical analysis concepts. It is recommended to thoroughly test and validate the indicator's performance in different market conditions and timeframes before incorporating it into a live trading strategy.
At its core, the Volume Oscillator calculates a custom volume delta, taking into account the true range of each candle. The volume delta is adjusted based on the relationship between the open and close prices, assigning a higher weight to the candle body when the close is higher than the open. This approach captures the nuances of buying and selling pressure within each candle.
The cumulative volume delta is then calculated using one of three user-selectable methods: On-Balance Volume (OBV), Cumulative Volume Delta (CVD), or Price-Volume Trend (PVT). These options allow traders to choose the volume accumulation method that best suits their analysis style.
The Volume Oscillator plots the difference between two exponential moving averages (EMAs) of the selected cumulative volume. The short-term EMA length and long-term EMA length can be customized by the user, providing flexibility to adapt to different trading timeframes and market conditions.
A key feature of this indicator is the divergence detection. It identifies bullish and bearish divergences between the Volume Oscillator and price action. Bullish divergence occurs when the oscillator forms a higher low while the price forms a lower low, suggesting potential buying pressure. Conversely, bearish divergence occurs when the oscillator forms a lower high while the price forms a higher high, indicating potential selling pressure. The divergence detection algorithm uses a configurable lookback range and pivot point detection to improve the accuracy of divergence signals.
The indicator also incorporates a signal line, which is an EMA of the Volume Oscillator. Crossovers between the Volume Oscillator and the signal line provide additional confirmation of potential trend changes. Bullish crossovers occur when the oscillator crosses above the signal line, while bearish crossovers occur when the oscillator crosses below the signal line.
To enhance the reliability of crossover signals, the indicator utilizes deviation bands based on the average volume delta. Bullish crossovers are confirmed when the signal line is below the lower deviation band, and the Volume Oscillator is negative. Bearish crossovers are confirmed when the signal line is above the upper deviation band, and the Volume Oscillator is positive.
The Volume Oscillator employs a dynamic color scheme to visually represent the strength and direction of the oscillator. The color gradually changes based on the normalized gradient between two colors, providing an intuitive view of the oscillator's momentum.
Customization options include:
- Short and long EMA lengths for the Volume Oscillator calculation
- Cumulative volume type (OBV, CVD, or PVT)
- Signal line length
- Divergence detection parameters (lookback range and pivot point settings)
This indicator is designed to be used in conjunction with other technical analysis tools and should not be relied upon as a standalone trading system. It is intended to provide insights into volume dynamics and potential trend changes, aiding in the decision-making process for professional traders.
Please note that this indicator is a complex tool that requires a solid understanding of volume analysis and technical analysis concepts. It is recommended to thoroughly test and validate the indicator's performance in different market conditions and timeframes before incorporating it into a live trading strategy.
Информация о релизе:
Added volume spike detection feature
- Detects significant volume spikes based on price action confirmation
- Volume spikes are identified when the current volume exceeds the EMA of volume over a certain period
- The EMA period and multiplier are adjusted based on the current timeframe for better spike detection
- Confirms volume spikes with price action
- Price action confirmation: Checks if the close is higher/lower than the open and above/below the SMA of the close over a confirmation period
- Subsequent price action: Checks if the close is higher/lower than the open and above/below the SMA of the close over a subsequent period
- Plots volume spike patterns with triangular shapes
- Upward triangle for volume spike up with price action confirmation
- Downward triangle for volume spike down with price action confirmation
- Provides alerts for volume spike patterns
- Alerts are triggered when a volume spike pattern is detected
- Separate alerts for volume spike up and volume spike down patterns
- Configurable through the "Show volume spikes" checkbox input
- Allows users to enable or disable the volume spike detection feature
Dmytro S.