Relative Volume - VPA / VSA / Better Volume

2018년 9월 29일

Volume is important.

Volume is VERY important.

But all the existing methods of volume analysis and order flow analysis fall into the same trap: they're all extremely complicated, hard to learn, and difficult for the human brain to distill down to an actual, tradable signal.

The Relative Volume Gradient Paintbars indicator seeks to address this issue by reducing and simplifying concepts from Volume Price Analaysis (VPA), Volume Spread Analysis (VSA), and Market Profile / Volume Profile into a single indication with varying levels of intensity. Rather than adding more complex symbology and cluttering up your charts with arrows and signals and lines as many volume indicators do, relative volume intuitively takes advantage of the dimension of color, and plays to your brain's automatic recognition of color intensity to highlight areas of interest on a chart where large volumes are being traded. These areas can in turn point out levels of support and resistance, or show strength in a move, exposing the actions of larger market participants that are behind a move.

The Relative Volume indicator can calculate based on a time-segmented / time-based / bar-specific average of volume, adjusting for some of the typical spikes in volume that happen at the beginning and end of a trading day; Or it can be calculated based on any length and type of moving average of volume that is desired: simple, exponential, weighted, Wilders, price-weighted, Hull, or TEMA.

This indicator does more than just normal relative share volume. It can also do relative volume-per-range. The idea behind this setting is that when more volume is being traded but very little movement is happening, this can indicate substantial support or resistance, where a lot of trades are likely being absorbed by larger operators. You can choose your own range calculation for this setting, whether you prefer True Range, high-low range, candle body range, close to close range, or any of several other custom settings.

Moreover, the levels or thresholds at which the color intensity changes are completely user-controlled, so you can adjust them upward to tune out more noise, or downward to increase the level of sensitivity. In addition, all of the colors for each of the thresholds are completely user-controlled.

We hope to see TradingView add support for Richard Arms' CandleVolume or Equivolume before too long, as well as Tick Volume or Trade Count Volume data, all of which can add a lot of power to this method of trading.

2018년 9월 30일

릴리즈 노트

Added options for dollar-based volume which can be good on longer term charts and cryptocurrency charts like BTCUSD:

• $ Volume
  
• $ Volume/Range
  
• $ Volume / Range %
  

2018년 10월 1일

릴리즈 노트

Added Candle Range + Wicks, ignoring gaps, as an option for the range calculation.

2019년 4월 23일

릴리즈 노트

Fixed a negative value issue on HULL ma type.

2019년 5월 14일

릴리즈 노트

Updated defaults.

2019년 5월 14일

릴리즈 노트

Updated documentation and comments.

2021년 5월 23일

릴리즈 노트

Fixed a small bug related to the threshold5 coloration.

2023년 10월 4일

릴리즈 노트

Updated to Pine Script version 5, added some error handlers.

2월 9일

릴리즈 노트

I use this set to show the relative volume divided by range. When this value is high, it indicates difficult movement ... i.e., lots of nearby support/resistance, a "thick" limit order book, etc. When this value is low it indicates ease of movement ... i.e., little nearby support/resistance, and a "thin" limit order book. This can be good for if you have an area of interest already and price is approaching that area, the relative volume per range can be good for confirming that support/resistance in real time.

3월 15일

릴리즈 노트

2024-03-15 Updated script to include color selectors on the main input screen so they're easy to identify and edit based on threshold.

8월 27일

릴리즈 노트

Update 2024-08-27 simple change, added checkbox to show/hide histogram so indicator can be used for paintbars functionality only, to save screen real estate.