Most investors ignore quantity. Big mistake! Big! Huge!
Volume must be the most underrated market variable used in technical analysis. But in case you recognize how to investigate and interpret it, you’ll be able to see market turning factors increase and expect pullbacks and trend changes.
You can figure out whether or not the choices Professionals are buying or selling via studying:
The Better Volume indicator improves to your usual extent histogram through coloring the bars primarily based on 5 standards:
When there are not any quantity alerts the choices default histogram bar coloring is cyan. The Better Volume indicator also comes in a PaintBar model, so that you can see the choices coloring on the choices fee bars themselves.
Better Volume Indicator: Volume Climax Up
Volume Climax Up bars are diagnosed through multiplying shopping for quantity (transacted at the ask) with variety after which seeking out the highest cost in the remaining 20 bars (default putting). Volume Climax Up bars indicate massive volume demand that results in bidding up prices. The default setting is to coloration the bars pink.
Volume Climax Up bars are generally seen at:
The beginning of an up fashion is almost constantly marked via a Volume Climax Up bar. This shows that the buyers are irritating to get on board and large extent enters the choices market and bids up costs speedy. A valid breakout must be observed by using extra shopping for however occasionally the low of the Volume Climax Up bar is tested.
Market tops also are characterised by Volume Climax Up bars regularly with High Volume Churn and/or Low Volume take a look at patterns. Changes in fashion generally take some time to increase, so don’t be suckered in too quickly – anticipate the marketplace to grow to be exhausted. A useful sign to watch for is the Low Volume bar – this suggests that in the end there may be no call for and the market is possibly to forestall advancing.
During a down fashion, pullbacks are regularly characterized by using Volume Climax Up bars. These show quick overlaying or buyers calling a bottom too speedy. As soon as this Climax volume declines the down fashion is possibly to renew. Continuation of the choices down trend is showed whilst the low of the choices Volume Climax Up bar is taken out.
Better Volume Indicator: Volume Climax Down
Volume Climax Down bars are basically the choices inverse of Volume Climax Up bars.
Volume Climax Down bars are identified via multiplying selling quantity (transacted at the choices bid) with range after which seeking out the highest fee inside the closing 20 bars (default placing). Volume Climax Down bars suggest huge extent deliver that outcomes in pushing down expenses. The default putting is to coloration the bars white.
Volume Climax Down bars are commonly seen at:
The starting of a down trend is nearly constantly marked through a Volume Climax Down bar. This indicates that the dealers are nerve-racking to get on board and big extent enters the choices marketplace and pushes down costs fast. A legitimate breakdown have to be accompanied by using extra selling but once in a while the excessive of the choices Volume Climax Down bar is tested.
Market bottoms are also characterised through Volume Climax Down bars often with High Volume Churn and/or Low Volume test patterns. Changes in fashion normally take a while to develop, so don’t be suckered in too quickly – look forward to the marketplace to come to be exhausted. A beneficial signal to watch for is the Low Volume bar – this indicates that eventually there is no deliver and the choices marketplace is likely to stop declining.
During an up fashion, pullbacks are often characterised through Volume Climax Down bars. These display earnings taking or buyers calling a top too quick. As quickly as this Climax quantity declines the choices up trend is in all likelihood to resume. Continuation of the up fashion is confirmed whilst the high of the Volume Climax Down bar is taken out.
Better Volume Indicator: High Volume Churn
High Volume Churn bars are identified by dividing extent with the aid of the bar’s high to low range after which looking for the very best value within the closing 20 bars (default placing). High Volume Churn bars indicate earnings taking, new supply getting into the marketplace at tops or new demand coming into the market at bottoms. The default placing is to shade the volume histogram bars green and the choices rate PaintBars blue.
High Volume Churn bars are usually seen at:
When Volume Churn is high it suggests demand is being met by way of new deliver at tops or deliver is being met by means of new call for at bottoms – in effect, fee isn’t capable of increase as new deliver or call for enters the marketplace. Hence the bar’s high to low range is low.
I want to think of the choices High Volume Churn bars as ‘brakes’. It’s like hitting the choices brakes – usually, the automobile will forestall shortly thereafter (1-2 points), after which turn around. At other times, however, the choices momentum is so super that every one you get is a pause after which the choices marketplace just keeps going inside the equal path! Unfortunately, now and again it is difficult to inform which outcome will arise. Then you simply want commonplace experience. Neil F.
Occasionally Volume Climax (up or down) and High Volume Churn bars coincide and those bars are colored magenta.
A word of warning with intra-day charts. High Volume Churn frequently appears on the closing bars of the choices buying and selling day. This does now not always represent a likely turning point, but is much more likely simply to be high extent from day traders remaining out positions.
And finally a chunk of records and a screenshot from Humphrey B. Neill’s 1931 conventional on analyzing the tape. In this segment he talks especially about tops being marked through high volume and no progress – high quantity churn. HT to John A. for pointing me inside the path of this extraordinary book. Darn, and I thought I’d coined the choices time period 🙁
Better Volume Indicator: Low Volume
Low Volume bars are recognized by means of looking for the lowest quantity within the last 20 bars (default putting). Low Volume bars suggest a lack of call for at tops or a loss of deliver at bottoms. The default placing is to color the choices bars yellow.
Low Volume bars are generally visible at:
Low Volume bars are my preferred volume indicator signal. They show what the amateurs are doing on tick charts. They are also very beneficial confirming indicators of a change in fashion path while the marketplace is testing a pinnacle or backside.
Better Volume Indicator: TradeStation EasyLanguage Code
A snippet of the TradeStation EasyLanguage code for the Better Volume indicator is proven above. By default, intra-day charts use the choices “UpTicks” and “DownTicks” facts to be had within TradeStation. For day by day, weekly or monthly charts an estimate of the shopping for and promoting quantity is calculated based on the bar’s open, excessive, low and close.
Please notice, the choices TradeStation EasyLanguage term “UpTicks” will call the entire extent transacted on an uptick/at the ask. Similarly, the term “DownTicks” will name the entire volume transacted on a downtick/at the bid. Total quantity for an intra-day bar can be deduced with the aid of adding collectively “UpTicks” and “DownTicks”. This terminology won’t be the choices equal for other charting platforms – so don’t malicious program me about it!
The desk above is a quick reference guide that shows what extent indicator signals to watch for at one-of-a-kind stages of the choices marketplace:
Remember, this approach of identifying turning points using quantity is even extra powerful whilst blended with non-correlated indicators, along with the choices Hilbert Sine Wave.
Better Volume Indicator for TradeStation, NinjaTrader, etc.
Just click on the buttons under to down load the loose Better Volume indicator for numerous buying and selling structures: TradeStation, NinjaTrader, ProRealTime, MultiCharts.internet, TradingView and the EasyLanguage code in textual content format. With the NinjaTrader download, please be aware you need to unzip the file first before importing.
Click this hyperlink for extra loose indicator code.
What people are pronouncing approximately the choices Better Volume indicator
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Elliott Wave, NinjaTrader Forum
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Emini futures are likely the choices exceptional day trading automobile inside the global these days. The ‘Better’ signs are a completely unique set of three non-correlated indicators on the way to provide you with an edge day trading. Read approximately the choices Emini buying and selling methodology and notice the signs at work within the trading weblog »
My name is Barry Taylor. I’m just a normal guy who makes a residing day buying and selling Emini futures full-time. This internet site shows what works for me and is a document of the way my buying and selling methodology is evolving … greater »
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