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Better Volume Indicator with Sound Alerts
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Better Volume Indicator with Sound Alerts

  #71 (permalink)
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Fat Tails View Post
The original concept of BetterVolume goes back to Emini Trading & How to Day Trade | Emini-Watch.com

http://emini-watch.com/uploads/Media/Better_Volume_Indicator.pdf

Here is a simplified definition:

Climax bar: Wide ranging high volume bar. If N is the lookback period, then the product range x volume should be larger than for the last N-1 bars.
Churn bar: Narrow range high volume bar. If N is the lookback period, then the ratio volume/range should be larger than for the last N-1 bars. As the ratio alone does not define a high volume bar, it is also required that the volume of a churn bar be above average.
Climax churn bar: A bar which is both a climax and a churn bar.

Weak climax bars are basically the same as strong climax bars, but the period N is smaller. For a strong climax bar, the default value for the lookback period is N = 20, for a weak climax bar it is only N = 10. The larger the lookback period is chosen, the more important is the climax or churn bar.

Low volume bars: If N is the weak lookback period, then the volume of the low volume bar should be lower than the volume of the preceding N-1 bars.

Other bars: Upclose and downclose bars that neither qualify as climax, churn nor volume bars.


Thank you most kindly. Very much appreciated.

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  #72 (permalink)
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Hi FT,

You state "Climax churn bar: A bar which is both a climax and a churn bar."

Just wondered how can a bar be both, i.e. qualifying as wide range and at the same time as narrow range? Thanks

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  #73 (permalink)
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danjuma View Post
Hi FT,

You state "Climax churn bar: A bar which is both a climax and a churn bar."

Just wondered how can a bar be both, i.e. qualifying as wide range and at the same time as narrow range? Thanks

Of course it cannot .....

But you can read the answer from the definitions. For a climax churn bar you need both

-> volume x range is largest of last N bars
-> volume / range is largest of last N bars

This can be achieved if you have an average range bar with very high volume. In that case the product from volume and range is high because volume is high, and the ratio from volume and range is high, because volume is high.

The wide range works in favor of the climax and against the churn bar. The narrow range works in favor of the churn bar, but against the climax bar.

Usually climax churn bars have a wider range which includes stopping volume at one end. If you draw a price volume distribution you would get a p-shaped (for an upclose) or a b-shaped distribution (for a downclose).

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  #74 (permalink)
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Fat Tails View Post
Of course it cannot .....

But you can read the answer from the definitions. For a climax churn bar you need both

-> volume x range is largest of last N bars
-> volume / range is largest of last N bars

This can be achieved if you have an average range bar with very high volume. In that case the product from volume and range is high because volume is high, and the ratio from volume and range is high, because volume is high.

The wide range works in favor of the climax and against the churn bar. The narrow range works in favor of the churn bar, but against the climax bar.

Usually climax churn bars have a wider range which includes stopping volume at one end. If you draw a price volume distribution you would get a p-shaped (for an upclose) or a b-shaped distribution (for a downclose).


Thank you very much for your reply FT. I won't pretend I understand what you are saying . Main thing is that it's a great indicator which I find very useful and many thanks for it and for your explanations.

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  #75 (permalink)
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Hello FT,

Another question please if you be so kind. Which variable in your code is assigned the current spread/range (i.e. narrow, wide or average). Reason I am asking is I want to display the current spread/range on my chart so I know what the spread/range is even if no volume bars (climax, churn etc) are identified. Hope I am making sense?

Many thanks
Dan

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  #76 (permalink)
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danjuma View Post
Hello FT,

Another question please if you be so kind. Which variable in your code is assigned the current spread/range (i.e. narrow, wide or average). Reason I am asking is I want to display the current spread/range on my chart so I know what the spread/range is even if no volume bars (climax, churn etc) are identified. Hope I am making sense?

Many thanks
Dan

If you want to display the range of a bar you can simply apply the Range indicator to your chart.

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  #77 (permalink)
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Fat Tails View Post
If you want to display the range of a bar you can simply apply the Range indicator to your chart.

Thanks for the reply FT. Does this range indicator (in NT I assume) you refer too the same thing as below (definition of spread per VSA principles)? I would have thought it refers to just the difference between the open and close of a bar?

The price spread is the difference between the highest and lowest trading points reached during the
timeframe you are looking at, which may be weekly, daily, hourly, or whatever other timeframe you
choose.



Thanks

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  #78 (permalink)
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Fat Tails View Post
If you want to display the range of a bar you can simply apply the Range indicator to your chart.

Ok, I think I understand what you are saying. Thanks

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  #79 (permalink)
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danjuma View Post
Thanks for the reply FT. Does this range indicator (in NT I assume) you refer too the same thing as below (definition of spread per VSA principles)? I would have thought it refers to just the difference between the open and close of a bar?

The price spread is the difference between the highest and lowest trading points reached during the
timeframe you are looking at, which may be weekly, daily, hourly, or whatever other timeframe you
choose.



Thanks

The range of a bar is equivalent to the spread of the period covered by that bar. The formula for the range is simply the high minus the low of the bar. That is what is used by the BetterVolume indicator.

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Fat Tails View Post
The range of a bar is equivalent to the spread of the period covered by that bar. The formula for the range is simply the high minus the low of the bar. That is what is used by the BetterVolume indicator.

Completely understood. Thank you sir.

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