This is a simple yet powerful indicator that can replace volume, Money Flow, Chaikin Money Flow, Price Volume Trend (PVT), Accumulation/Distribution Line (ADL), On Balance Volume (OBV).
When "Baseline Chart" option is disabled, it looks similar to regular volume. The volume bars has two shades of green and red. The dark shade shows amount of accumulation and the light shade shows total volume (what you see on a regular volume indicator). Blue line is the moving average (or cumulative total) of A/D and the gray line is for total volume.
When money volume is enabled, volume it multiplied by price. As you can see in the chart below, trade volume in terms of USD was declining after ATH. This is not the case in regular volume chart which shows instrument volume (chart above).
In Baseline view, the aggregation method you choose can turn it into different indicators. With EMA/SMA aggregation, blue and gray line shows buy/sell pressure. At 0, there is not buy or sell pressure.
If you turn off volume bars (from style menu), it gives you a reliable indicator to measure divergence. This should be more reliable than most other range-bound indicators (i.e. RSI, MFI, CMF). I will publish a TA about correctly measuring divergence (it's a must read even if you are a pro trader). Make sure that the length is set to a large number on smaller TFs such as 4h.
For following results, set aggregation to cumulative and turn off money volume:
When wick weight=0, the GRAY line is identical to OBV indicator.
When normalized by spread and wick weight=10, the BLUE line is identical to ADL (improved by true range).
When normalized by previous bar price, wick weight=0, the BLUE line is identical to PVT.
How I use this indicator:
- Baseline chart, replaced my regular volume indicator - Mostly 4h TF for divergence - EMA aggregation (and occasional cumulative aggregation) with length above 50. I change the length to 100 and 200 for confirmation. - Wick weight=0 or max 2.
With this indicator, you can learn how different indicators are built and how they are different from each other. I will publish a TA to explain more about different indicators and their pros and cons.
I will publish this indicator without volume bars and additional options to make it range bound.
Nota Keluaran
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- fixed a minor bug re disabling - changed the default chart mode
Nota Keluaran
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- Changed EMA aggregation to smoothed with equivalent length (EMA length = 2 x Smoothed MA length - 1
@cI8DH, hey bro, what do the numbers mean? The ones in either blue, green, grey or blue near the chart on the left? Is that something related to the volume? Thanks. P.s why are the buy and sell pressure alwayus similar even if the stock goes down or up??
INIFINIT3LIGHT
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Great work bro. But amazing part is you are not greedy for money to sell this master piece. If I make money then I will share the profits.
cI8DH
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@ShastryAnanth, your welcome my friend. the fact that u r appreciating it mean a lot to me. I will publish 2 complementary indicators to this one so u can make more money :D
nashlow
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Hi cI8DH, what a promising indicator. I am toying with it and like the 'baseline' feature. Any chance of having the opposing wick show up as well? For example, when the ADV histogram is green, show the wick for how far the selling attempt was. With the addition of the opposing wick, one can easily gauge the potential strength per bar/set of bars for potential reversal or trend continuation.
gopinath007777
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can we overlay it on the chart
farukkosovali
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Hi cI8DH, how great does it look like, can you please let me know if I have any chance to adopt this to GBP or USD? I have tried it but couldn't do that..