Volume Price Trend with Divergence and Pivot Points

2021년 10월 14일

The volume price trend indicator is used to determine the balance between a security’s demand and supply. The percentage change in the share price trend shows the relative supply or demand of a particular security, while volume indicates the force behind the trend. The VPT indicator is similar to the on-balance volume (OBV) indicator in that it measures cumulative volume and provides traders with information about a security’s money flow.

This is Volume Price Trend or VPT recalculated to be an Oscillator, a Divergence hunter was added, also Pivot Points and Alerts.

VPT is considered a "leading indicator" - in contrast to a "lagging indicator" just as Moving Averages it does not show a confirmation what already happened, but it shows what can happen in the future. For example: The chart is climbing while the VPT oscillator is slowly declining, gets weaker and weaker, maybe even prints bearish divergences? That means that a reversal might be occurring soon. Leading indicators are best paired with Stop and Resistance Lines, general Trendlines , Fib Retracements etc...Your chart is approaching a very important Resistance Trendline but the VPT shows a very positive signal? That means there is a high probability that the Resistance is going to be pushed though and becomes Support in the future.

What are those circles?
-These are Divergences. Red for Regular-Bearish. Orange for Hidden-Bearish. Green for Regular-Bullish. Aqua for Hidden-Bullish.

What are those triangles?
- These are Pivots . They show when the VPT oscillator might reverse, this is important to know because many times the price action follows this move.

Please keep in mind that this indicator is a tool and not a strategy, do not blindly trade signals, do your own research first! Use this indicator in conjunction with other indicators to get multiple confirmations.