Volatility/Volume Impact

Concept is as below:
- Compare volume with a reference median value. You can also use moving average or other types for this comparison.
- If volume is higher than median, increment positive value impact with change in close price. If volume is less than median, then increment negative value impact with change in close price.
- With this we derive pvd and nvd which are measure of price change when volume is higher and lower respectively. pvd measures the price change when volume is higher than median whereas nvd measures price change when volume is lower than median.
- Calculate correlation of pvd and nvd with close price to see what is impacting the price by higher extent.
- Colors are applied to plots which have higher correlation to price movement. For example, if pvd has higher correlation to price movement, then pvd is coloured green whereas nvd is coloured silver. Similarly if nvd has higher correlation to price then nvd is coloured in red whereas pvd is coloured in silver.
Similar calculation also applied for volatility.
With this, you can observe how price change is correlated to high/low volume and volatility.
Let us see some examples on different markets.
Example 1:
From the chart snapshot below, it looks evident that SPY always thrive when there is low volatility and LOW VOLUME!!
https://www.tradingview.com/x/9sq1sUoN/
Example 2:
The picture will be different if you look at individual stocks. For Tesla, the price movement is more correlated to high volume (unlike SPY where low volume days define the trend)
https://www.tradingview.com/x/729SP8PW/
Example 3:
Unlike stocks and indices, high volatility defined the trend for BTC for long time. It thrived when volatility is more. We can see that high volume is still major influencer in BTC price movements.
https://www.tradingview.com/x/5GoJrgyM/
Settings are very simple and self explanatory.
https://www.tradingview.com/x/axehSIFT/
Hint: You can also move the indicator to chart overlay for better visualisation of comparison with close price.
https://www.tradingview.com/x/IurS9noh/
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Per un accesso rapido a un grafico, aggiungi questo script ai tuoi preferiti: per saperne di più clicca qui.
Subscribe - trendoscope.io/pricing
Blog - docs.trendoscope.io
Declinazione di responsabilità
Script open-source
In pieno spirito TradingView, il creatore di questo script lo ha reso open-source, in modo che i trader possano esaminarlo e verificarne la funzionalità. Complimenti all'autore! Sebbene sia possibile utilizzarlo gratuitamente, ricorda che la ripubblicazione del codice è soggetta al nostro Regolamento.
Per un accesso rapido a un grafico, aggiungi questo script ai tuoi preferiti: per saperne di più clicca qui.
Subscribe - trendoscope.io/pricing
Blog - docs.trendoscope.io