Volume-Weighted Price Movement

5월 20일

The Volume-Weighted Price Movement (VWPM) indicator is an easy to read technical analysis tool that analyses how volume and price movement work together to drive market momentum.

How It Works
The VWPM indicator tracks two primary components:

Bullish Movement (green line): Measures the upward price movement weighted by volume. When price closes above the open, this component calculates how much buying pressure exists by multiplying the price change (close - open) by the volume of that period.

Bearish Movement (red line): Measures the downward price movement weighted by volume. When price closes below the open, this component calculates how much selling pressure exists by multiplying the price change (open - close) by the volume of that period.

Bull-Bear Difference (lime/orange line): Shows the net momentum by subtracting bearish movement from bullish movement, providing an at-a-glance view of which force is dominant.

The VWPM integrates volume data to identify whether price movements are backed by significant participation. A large price move with low volume carries less weight than the same move with high volume, providing a more accurate reflection of market strength.

A shorter lookback period makes the indicator more responsive to recent price action, while a longer period smooths out market noise for trend identification.

Interpretation

Bullish Signals

When the green line (bull movement) rises and stays above the red line
When the Bull-Bear Difference line crosses above zero and maintains positive momentum
Divergence between price making lower lows but the bull line making higher lows (hidden strength)

Bearish Signals

When the red line (bear movement) rises and stays above the green line
When the Bull-Bear Difference line crosses below zero and maintains negative momentum
Divergence between price making higher highs but the bull line making lower highs (hidden weakness)



open source, if anyone makes the script better please let me know :)

6월 3일

릴리즈 노트

The Volume-Weighted Price Movement (VWPM) indicator is an easy to read technical analysis tool that analyses how volume and price movement work together to drive market momentum.

How It Works
The VWPM indicator tracks two primary components:

Bullish Movement (green line): Measures the upward price movement weighted by volume. When price closes above the open, this component calculates how much buying pressure exists by multiplying the price change (close - open) by the volume of that period.

Bearish Movement (red line): Measures the downward price movement weighted by volume. When price closes below the open, this component calculates how much selling pressure exists by multiplying the price change (open - close) by the volume of that period.

Bull-Bear Difference (lime/orange line): Shows the net momentum by subtracting bearish movement from bullish movement, providing an at-a-glance view of which force is dominant.

The VWPM integrates volume data to identify whether price movements are backed by significant participation. A large price move with low volume carries less weight than the same move with high volume, providing a more accurate reflection of market strength.

A shorter lookback period makes the indicator more responsive to recent price action, while a longer period smooths out market noise for trend identification.

Interpretation

Bullish Signals

When the green line (bull movement) rises and stays above the red line
When the Bull-Bear Difference line crosses above zero and maintains positive momentum
Divergence between price making lower lows but the bull line making higher lows (hidden strength)

Bearish Signals

When the red line (bear movement) rises and stays above the green line
When the Bull-Bear Difference line crosses below zero and maintains negative momentum
Divergence between price making higher highs but the bull line making lower highs (hidden weakness)

How to use this in trading: By itself the indicator is not a signals generator, however it can give confluence to your trade plan and can help you work out when to exit your trade. You are able to see quickly and easily which price movements are accompanied by how much volume and whether the strength of the trend moving the opposite direction is gaining volume or loosing volume which can help in your decision making regarding your trade. Disclaimer: This is not real raw bear- bull strength information, this information assumes that the volume traded in each individual bar is related to the direction which the bar is heading. Trading is risky so trade safe.

Open source, if anyone makes the script better please let me know :)