OPEN-SOURCE SCRIPT
up/down VolumeRatio
Idea:
Measure the directional dominance of trading volume by comparing aggregated up-volume versus down-volume, then stabilize the signal using a logarithmic transformation and EMA smoothing.
Rationale:
The ratio of up-volume to down-volume captures the imbalance between buying and selling pressure. Log transformation ensures symmetry and reduces extreme value distortion, while EMA extracts persistent trends in volume flow.
Usage:
Use the log ratio crossing its EMA as a signal of momentum shift. Positive values indicate bullish dominance, negative values indicate bearish dominance.
Measure the directional dominance of trading volume by comparing aggregated up-volume versus down-volume, then stabilize the signal using a logarithmic transformation and EMA smoothing.
Rationale:
The ratio of up-volume to down-volume captures the imbalance between buying and selling pressure. Log transformation ensures symmetry and reduces extreme value distortion, while EMA extracts persistent trends in volume flow.
Usage:
Use the log ratio crossing its EMA as a signal of momentum shift. Positive values indicate bullish dominance, negative values indicate bearish dominance.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.