The indicator basically takes out the noise and colors bars based on factors of time and for day. There are three different time periods you can set: Short, Medium, Long. Each period can be set with a different color. The period value looks for highest bar within that period. If today's bar is the hightest value, it colors the bar based on the formatted color. It does not matter if the price bar is up or down. The defaults are 4 days, 20 days, 100 days. There is also a moving average available to show or hide based on you trading style.
The purpose is to easily see changes in . Typically, you would like to see rising as a new trend begins. This will show up quickly as you will see a cluster of rising red and / or purple bars.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
// // @author MarketSurvivalist // This indicator is based on the ideas written about by Vincent Kott in his book Volume Spike Analysis // (http://www.amazon.com/Volume-Spike-Analysis-Includes-indicators-ebook/dp/B00F87ZMK8) // study("Volume Spike Analysis [marketsurvivalist]", shorttitle="VSA_MS") shortLookback=input(4) mediumLookback=input(20) longLookback=input(100) showMA=input(true) lengthMA=input(60) v2 = volume highestShort = highest(volume, shortLookback) highestMedium = highest(volume, mediumLookback) highestLong = highest(volume, longLookback) c = iff(highestLong == v2, blue, iff(highestMedium == v2, purple, iff(highestShort == v2, red, white))) plot(v2, style=columns, color=c) plot(showMA?sma(v2, lengthMA):na, color=aqua)