Finite Volume Elements (FVE)

The FVE is a pure volume indicator. Unlike most of the other indicators
(except OBV), price change doesn`t come into the equation for the FVE (price
is not multiplied by volume), but is only used to determine whether money is
flowing in or out of the stock. This is contrary to the current trend in the
design of modern money flow indicators. The author decided against a price-volume
indicator for the following reasons:
- A pure volume indicator has more power to contradict.
- The number of buyers or sellers (which is assessed by volume) will be the same,
regardless of the price fluctuation.
- Price-volume indicators tend to spike excessively at breakouts or breakdowns.

Open-source script

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.

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////////////////////////////////////////////////////////////
//  Copyright by HPotter v1.0 30/05/2014
// The FVE is a pure volume indicator. Unlike most of the other indicators 
// (except OBV), price change doesn?t come into the equation for the FVE (price 
// is not multiplied by volume), but is only used to determine whether money is 
// flowing in or out of the stock. This is contrary to the current trend in the 
// design of modern money flow indicators. The author decided against a price-volume 
// indicator for the following reasons:
// - A pure volume indicator has more power to contradict.
// - The number of buyers or sellers (which is assessed by volume) will be the same, 
//     regardless of the price fluctuation.
// - Price-volume indicators tend to spike excessively at breakouts or breakdowns.
////////////////////////////////////////////////////////////
study(title="Finite Volume Elements (FVE)", shorttitle="FVE")
Period = input(22, minval=1)
Factor = input(0.3, minval=1)
xhl2 = hl2
xhlc3 = hlc3
xClose = close
xVolume = volume
xSMAV = sma(xVolume, Period)
nMF = xClose - xhl2 + xhlc3 - xhlc3[1]
nVlm = iff(nMF > Factor * xClose / 100,  xVolume, 
        iff(nMF < -Factor * xClose / 100, -xVolume, 0))
nRes = nz(nRes[1],0) + ((nVlm / xSMAV) / Period) * 100
plot(nRes, color=red, title="FVE")

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