As promised, here is the buyer to seller volume indicator!
About it/How it works:
The indicator tracks buying and selling volume. It does it simplistically but effectively simply by looking at red vs green candles and averaging out the volume of each respective candle. It uses the SMA of buying/selling and overall volume to track buyers to sellers and also display the average volume traded over a designated period of time.
Legend:
Green lines = buying volume Red lines = selling volume Yellow lines = SMA over designated period of time (user input defined, default is 14 candles).
Buyers are shown in green and sellers are shown in red:
How to Use it:
Default, the indicator goes to 1 Day, 14 candle period. My preference personally is to use to have it go to "chart" but you can view any time period on the chart that you want and designate the time period of volume you want to view independently.
This can be used for: 1. Identify trends: When buying or selling volume is above selling volume and above the SMA, you know that this persuasively supports a bullish trend. Inverse for the opposite (see below):
2. To identify fakeouts and whether there is volume backing a move:
3. To identify potential changes in trends via a cross:
Its also a great reference when you are unsure of a move. This indicator literally just saved me from wrongfully shorting the FOMC bear flag today:
Probably many other uses you can find, but these are the things I like to use it for!
As always, I have posted a tutorial video for your reference:
As always though, if you have any questions, comments or suggestions for the indicator, please share them below!
Hi sir,How you consider to calculate buy and sell volumes instead of general volume.I want to be sure before i using it.Thank you.Forgive me for my stupid questions... :)
Steversteves
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@berke_gorgun, No stupid questions! It interprets red candles as bearish volume and green candles as bullish volume. And it takes the total amount of volume involved in that candle and puts it into the respective category. The average volume is the cumulative volume of buyers AND sellers both which is represented with the yellow line. Hope this answers your question! Thanks for checking out the indicator!
cooboarder
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Great indicator. Do Heiken Ashi candles change the results?
Steversteves
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@cooboarder, They should not, no, as its coded to only pull volume data :-).
thank you this is superb! in term of usage / implications is it similar to VOLD by any chance?
Steversteves
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@louistran_016, Great question! I actually don't know enough about VOLD, I did an indicator search, is it volume density you are referring to? If so, just briefly looking at the coding, yes it is actually similar! I didn't realize this existed haha. But I am really not familiar with VOLD so I can't really speak to its application in relation to how my indicator is to be applied, but I am definitely going to play around with VOLD! Thanks! And thanks for the comment!
louistran_016
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@Steversteves, ah i was referring to VOLD, showing differences between the up volume and down volume on the NYSE, which is quite similar with your script in showing intra day breadth and strength of the trend. Thanks for making this public for us to learn