Throughout my trading career, I've been intrigued by the dynamic interplay between candlestick patterns and trading volume. This fascination led me to develop an open-source indicator to help illuminate these patterns for the broader trading community.
Upon researching the Public Library, I found that many indicators relating to candlestick/volume analysis are proprietary and not open-source. This discovery further fueled my commitment to contribute a free, accessible tool that traders of all levels can utilize in their technical analysis.
Thus, I am excited to present to you our High Volume Bars Indicator. A unique tool that I believe fills a gap in the Public Library. I truly hope you find it beneficial in your trading journey and that it empowers you to make more informed decisions.
The High Volume Bars Detector is designed to help traders identify bars with significantly higher volume than the average. Users can filter in the settings menu:
1) The length of the Simple Moving Average (SMA) for volume, allowing you to define the average volume over a specific number of bars.
2) The Volume Multiplier, a factor that determines how much greater the volume of a bar should be compared to the SMA to qualify as a high-volume bar.
3) The Lookback Period, a specified number of candles used as a comparative benchmark for identifying the highest volume.
4) If the Volume bar is green or red, so if the candle price is --> close > open or open > close
Examples to better understand the logic of the indicator:
1) Length of the Simple Moving Average (SMA) for Volume: This setting allows you to define the average volume over a specific number of bars. For instance, if you set the SMA length to 20, the indicator will calculate the average volume of the past 20 bars and use it as a baseline to identify high volume bars.
2) Volume Multiplier: This is a critical factor that determines the threshold for what constitutes a high-volume bar. If you set the volume multiplier to 2.0, for example, the indicator will flag any bar where the volume is twice the value of the SMA volume as a high-volume bar.
3) Lookback Period: This setting lets you specify the number of candles that the indicator should consider when determining the highest volume. For instance, if the lookback period is set to 14, the indicator will compare the volume of the current bar with the volumes of the previous 14 bars. If the current bar's volume is the highest, it will be flagged.
4) Volume Bar Color: This filter helps you identify whether a high-volume bar is bullish or bearish. If the bar is green (close > open), it suggests buyers were dominant during that period. If the bar is red (open > close), it suggests sellers had the upper hand. By setting this filter, you can choose to focus on high volume bars that are either bullish (green) or bearish (red) or both, depending on your trading strategy.
Remember, these filters offer a level of customization that allows you to tailor the High Volume Bars Detector to your unique trading style and requirements. Always remember to adapt these settings to align with your overall trading plan and risk tolerance.
It is important to note that no trading indicator or strategy is foolproof, and there is always a risk of losses in trading. While this indicator may provide useful information for making conclusions, it should not be used as the sole basis for making trading decisions. Traders should always use proper risk management techniques and consider multiple factors when making trading decisions.
If you find this new indicator helpful in your trading analysis, I would greatly appreciate your support! Please consider giving it a like, leaving feedback, or sharing it with your trading network. Your engagement will not only help me improve this tool but will also help other traders discover it and benefit from its features. Thank you for your support!
2. Introduced a feature that plots the selected moving average (SMA or EMA) directly on the chart. The type and length of this moving average can be chosen by the user, offering a clearer visual reference.
Dentro do verdadeiro espírito TradingView, o autor deste script publicou ele como um script de código aberto, para que os traders possam compreender e checar ele. Um viva ao autor! Você pode usá-lo gratuitamente, mas a reutilização deste código em uma publicação é regida pelas Regras da Casa. Você pode favoritá-lo para usá-lo em um gráfico.
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