FuTech V-Spike & V-Highlighter

4 ore fa

FuTech V-Spike & V-Highlighter

In the context of trading and technical analysis, this volume spike & volume highlighter indicator is the perfect indicator used to assess market activity and make informed trading decisions.

Let's Understand in brief as below :

1) Volume Spike :
A volume spike refers to a sudden, significant increase in trading volume compared to the average volume over a specific period.
This spike can indicate heightened interest in a particular security, often preceding price movements.
Traders may look for volume spikes as signals for potential buy or sell opportunities because they can suggest that a stock is experiencing increased activity, possibly due to news, earnings releases, or other catalysts.

Characteristics of a Volume Spike:
Assess the sudden increase in trading volume.
It Can occur in both upward and downward price movements.
Often compared to the average volume over a defined period (e.g., the last 20 days).

2) Volume Highlighter:
A volume highlighter emphasizes significant changes in trading volume on a price chart. This indicator typically uses color coding to highlight periods of high volume, making it easier for traders to identify volume spikes at a glance.

How this indicator works:

a) Volume Spike will calculate the highest volume spike as per the user defined threshold multiplier. (Multiplier = when volume exceeds a certain threshold)

b) The threshold Multiplier can be set based on a fixed number or as a multiple of the Exponential Moving Average volume. Volume Spike Multiplier default is 1.5, means the EMA volume should cross 1.5 times the user defined lookback period

c) The result is derived from the user defined lookback candles by using its EMA instead of SMA, which will give us more precise results.

d) By default, last 10 candles EMA average is used to calculate the Volume Spike but you can choose your lookback period as many days, weeks, months, years of your choice !

e) In Volume Spike -
- Green candle will show Yellow color Bar as Bullish sentiments, whereas
- Red candle will show Black Bar as Bearish sentiments.

f) Volume Highlighter will highlight the candles background if the highest volume is crossing as per the the user defined lookback period

g) Default Lookback period is 20, Color coding (e.g., Blue for bullish spikes, Red for bearish spikes) helps traders quickly assess the volume context.

h) Volume Highlighter plotting shapes and positions can be modified

Illustration:

From the Above pic,

If last Volume Spike is 10 lookback candles, Spike multiplier is 1.5 and Highlighter lookback candles is 20,
Then yellow candle means the spike in volume which is 1.5 times higher than the last 10 candles
Highlighting color defines the highest volumes trading from the last 20 candles which is either Blue (Bullish) or Red (Bearish) sentiments

Conclusion :

Using FuTech V-Spike & V-Highlighter indicator - will help traders identify potential trading opportunities and better understand market dynamics.
By analyzing volume in conjunction with price movements, traders can make more informed decisions based on market sentiment.

Thank you !

Jai Swaminarayan Dasna Das !
He Hari ! Bas Ek Tu Raji Tha !