Relative Volume Index [PhenLabs]

19 gen

Relative Volume Index (RVI)
Version: PineScript™ v6

Description
The Relative Volume Index (RVI) is a sophisticated volume analysis indicator that compares real-time trading volume against historical averages for specific time periods. By analyzing volume patterns and statistical deviations, it helps traders identify unusual market activity and potential trading opportunities. The indicator uses dynamic color visualization and statistical overlays to provide clear, actionable volume analysis.

Components
• Volume Comparison: Real-time volume relative to historical averages
• Statistical Bands: Upper and lower deviation bands showing volume volatility
• Moving Average Line: Smoothed trend of relative volume
• Color Gradient Display: Visual representation of volume strength
• Statistics Dashboard: Real-time metrics and calculations

Usage Guidelines

Volume Strength Analysis:
• Values > 1.0 indicate above-average volume
• Values < 1.0 indicate below-average volume
• Watch for readings above the threshold (default 6.5x) for exceptional volume



Trading Signals:
• Strong volume confirms price moves
• Divergences between price and volume suggest potential reversals
• Use extreme readings as potential reversal signals



Optimal Settings:
• Start with default 15-bar lookback for general analysis
• Adjust threshold (6.5x) based on market volatility
• Use with multiple timeframes for confirmation

Best Practices:
• Combine with price action and other indicators
• Monitor deviation bands for volatility expansion
• Use the statistics panel for precise readings
• Pay attention to color gradients for quick assessment

Limitations
• Requires quality volume data for accurate calculations
• May produce false signals during pre/post market hours
• Historical comparisons may be skewed during unusual market conditions
• Best suited for liquid markets with consistent volume patterns

Note: For optimal results, use in conjunction with price action analysis and other technical indicators. The indicator performs best during regular market hours on liquid instruments.

6 giorni fa

Note di rilascio

What Makes This Unique & Useful
This indicator combines three essential components that work together to provide deeper volume analysis:
1. Time-Specific Volume Analysis: Instead of simple moving averages, it tracks and compares volume for specific times of day, creating more accurate benchmarks for trading sessions
2. Statistical Validation: Uses standard deviation (2.5x default) to confirm volume signals, reducing false alerts common in basic volume indicators
3. Session-Aware Filtering: Automatically adjusts calculations for market opens (8:30) and different trading sessions, preventing false signals during irregular trading periods

How It Actually Works
The indicator's core calculations:
• Maintains a rolling 15-bar(adjustable) historical volume array for each specific time period
• Calculates relative volume: Current Volume ÷ Time-Specific Historical Average
• Applies 20-period smoothing to reduce noise
• Generates bands at ±2.5 standard deviations to identify truly significant moves

Underlying Method
Unlike simple trend-following volume indicators, this tool:
• Uses array-based historical tracking instead of basic moving averages
• Compares current volume to exact same-time historical data (not just general averages)
• Implements dual-layer filtering: 15-bar specific time comparison + 20-bar trend smoothing
• Validates signals through standard deviation expansion/contraction cycle