Volume Spike Detector

Volume Spike Detector

This script is designed to identify significant spikes in trading volume and visually represent them on the chart. It calculates the 20-period simple moving average (SMA) of the trading volume and multiplies it by a user-defined threshold to determine the spike threshold. When the current volume exceeds this threshold, the script detects and highlights a volume spike.

Key Features:
Dynamic Spike Threshold:

The script calculates the spike threshold dynamically based on the average trading volume. Users can customize the threshold multiplier using an input setting.
Example: A threshold multiplier of 2.0 means the current volume must be twice the 20-period SMA to trigger a detection.
Visual Representation:

The current volume is plotted in blue bars.
The spike threshold is plotted as a red line, making it easy to visually identify when the volume crosses the threshold.
Alert Notification:

When a volume spike is detected, an alert is triggered to notify the user.
This feature is useful for real-time monitoring and spotting potential trading opportunities.

Use Case:
Traders can use this tool to identify sudden increases in trading activity, which may indicate a significant market move or event. It’s suitable for all markets, including cryptocurrencies, stocks, and forex.