Better_Volume_Indicator - The Better Volume Indicator . My...

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The Better Volume Indicator . .. My Secret To Analyzing Volume Most Traders Ignore Volume - Big Mistake! Volume has to be the most underrated market variable used in technical analysis. But if you know how to analyze and interpret it, you'll be able to see market turning points develop and anticipate trend changes. What you'll learn in the following article:   How to identify climax volume, volume churn and low volume   What 3 volume patterns occur again-and-again at market tops   What 3 volume patterns occur again-and-again at market bottoms   How can volume tell you when an up trend or down trend has started   What volume patterns signal mid-trend entry points Most traders focus on whether the volume is buying volume or selling volume. This has to be flawed - the buying volume by definition equals the selling volume. What we should be looking at is average trade size, whether new buyers or sellers are entering the market and what effect they are having on price - and I use a combination of tick charts, volume and the bar's RANGE to determine this. Better Volume Indicator Code Inputs: Color(Cyan), LowColor(Yellow), ClimaxColor(Red), ChurnColor(Green), ClimaxChurnColor(Magenta), LowChurnColor(White), AvgColor(Red); Variables: BarColor(Cyan); BarColor = Color; Value1 = V; Value2 = V*Range; If Range <> 0 then Value3 = V/Range; Value4 = Average(Value1,100); If Value1 = Lowest(Value1,20) then BarColor = LowColor; If Value2 = Highest(Value2,20) then BarColor = ClimaxColor; If Value3 = Highest(Value3,20) then BarColor = ChurnColor; If Value2 = Highest(Value2,20) and Value3 = Highest(Value3,20) then BarColor = ClimaxChurnColor; If Value3 = Lowest(Value3,20) then BarColor = LowChurnColor; Plot1(Value1,"Volume",BarColor); Plot2(Value4,"Avg",AvgColor); Better Volume Indicator EasyLanguage Code The Better Volume Indicator . .. My Secret To Analyzing Volume 04.04.2008 Copyright 2008 www.Emini-Watch.com 1 of 7
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TradeStation EasyLanguage code for the Better Volume indicator is shown above. The typical volume histogram can be improved by coloring bars based on 5 criteria:   Climax volume - high volume and high range   High volume churn - high volume but low range   Climax volume plus High volume churn - both the above conditions (rare)   Low volume churn - low volume and high range   Low volume - just low volume but not a low volume churn bar Volume Climax is identified by multiplying volume with range and then looking for the highest value in the last 20 bars. In the code above, Value2 is used to make the calculation
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This note was uploaded on 02/10/2011 for the course GEOL 4330 taught by Professor Chesnokov during the Spring '11 term at University of Houston - Downtown.

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Better_Volume_Indicator - The Better Volume Indicator . My...

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