LucF

Volume Ticks - Increasing Volume Bar Count [LucF]

Volume Ticks is a zero-lag market sentiment indicator. It works by providing a cumulative count of increasing volume columns.

A one count is added for each increasing volume column where close>open, and one is subtracted on an increasing volume column if close<open. That’s it. The count does not change when volume hasn’t increased compared to the previous bar’s volume , nor when price does not change. Price movement during the bar, whether 0.001% or 100%, is irrelevant to Volume Ticks; it only moves by 1 at a time.

Given that price is not used in Ticks, it is intriguing how well it tracks—or often leads—price movement. The fact that it doesn’t use price also makes it an ideal companion to most indicators that do use price, whether in momentum or mean-reversion based strategies.

As with my TLD indicator, the postulate behind Ticks is that price movement occurring on increasing volume is more significant than otherwise. In my opinion, the usefulness of Ticks tends to validate this.

Features
  • The averages can be turned on and off.
  • A long-term sentiment marker can be turned on.
  • Markers for BB exits and pause-reversals can be turned on, with the option of showing only long or short markers.
  • 9 alerts can be defined on markers, with the option of choosing only long or short markers.

Use cases
  • Provides perspective when reading momentum indicators.
  • Helps identify false momentum tops or bottoms.
  • Comes in handy in detecting subtle sentiment in consolidations. Instances where slight price movement is accompanied by more important Ticks movements often predate more important price movements.
  • Helps detect exhaustion in trends.

Things to keep in mind
  • Volume Ticks show sentiment—not price nor trend. Because it so often mimics price, this is easy to forget.
  • Volume Ticks is not bound. Its position with regards to the zero line is not particularly useful either; position relative to and interplay between the MAs is much more useful.
  • Readings are more reliable with many data points. When used on monthly, weekly or daily charts , readings should be validated at shorter intervals. Over the same length of time, a compressed view of a shorter interval will usually provide more reliable readings than the longer interval view.
  • Being zero-lag, Ticks is inherently noisy. You will see this when using the Pause-Reversal markers.
  • The signal line will not move if no increasing volume is accompanying price movement, however important that movement may be.
  • Linear regressions are used in lieu of MAs, except the slow long MA (T5) which uses a simple moving average . The fast MA (T2) is double-smoothed.
  • Markers 2 are brighter when T3 and T4 are in the direction of the marker. The markers are not this indicator’s most useful feature.

Here is Ticks in action on a chart also using TLD:

Release Notes:
  • Updated short title so it reflects long name.
  • Improved alert code so alerts are easier to create.
Alerts
You can define alerts on any combination of markers you configure. After defining the markers you want the alert to trigger on, make sure you are on the interval you want the alert to be monitoring at, then create the alert, select Volume Ticks, use the default Configured Markers alert condition and choose your triggering window (usually Once Per Bar Close). Once the alert is created, you can change the indicator's inputs with no effect on the alert.
Release Notes:
  • A new marker (#3) has been added. It triggers when Ticks goes up by X in the last N bars. Both values are configurable (defaults are 3 and 5). I find the new marker quite useful, but keep in mind that Ticks has no idea of where price is, so signals should be filtered using a price-based indicator.
Release Notes: Minor change in indicator's name.
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"The stock market is a device for transferring money from the impatient to the patient."
— Buffet

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Comments

One Question: Which line is the "signal line?"

Per the statement in description: The signal line will not move if no increasing volume is accompanying price movement, however important that movement may be.
Reply
LucF TheEconomyCreator
@TheEconomyCreator, It's the yellow and blue line.
Reply
Perfect, thanks for making public
Reply
seems like really useful.
I am surprised they have such a high correlation to price action.

thanks for making it public.
Reply
Thanks a lot buddy.
Reply
Very cool, thanks for sharing!
Reply
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