This Indicator is built to give you an edge into the market. Given volume, volatility and price-action, it compares market conditions against the maximum that have occurred so far in the session. Useful for intraday and day trading for timing entries with the smart money.
The green/red histogram gives us a view into the relative strength of the current bar, whether they have strong buying or selling power.
The orange signal line gives us a view of the recent trend, which can be modified using the various inputs.
Release Notes
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*Updated so the signal/smoothing (orange) line is more responsive and can be tweaked. To increase visibility of the signal line, increase the size of it. The number of days past variable controls how many days to look back into the market (Note: this is limited to 1000 bars back and dependent on time frame).*
Use Green bars represent candle strength and volume is leaning bullish while red bars represent candle strength and volume is leaning bearish. A value of 1/-1, respectively, represents the current strength is either the highest or equal to the strongest volume in the number of days back. The signal line shows where the overall trend of the volume is.
A strong confidence in a buy entry is given when a red bar is immediately matched or overshot by a green bar, when price is within a significant entry zone. This shows that seller strength was matched or overtaken by buyers. A strong confidence in a sell entry is given when a green bar is immediately matched or overshot by a red bar, when price is within a significant entry zone. This shows that buyer strength was matched or overtaken by sellers.
Release Notes
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*Update: Now has easy to read lines to use as a confirmation on all trade entries.*
If Buy Strength is above the green line, it means it has significant volume and price action that leans bullish. And the reverse, If Sell Strength is above the red line, it means it has significant volume and price action leaning bearish.
Use this as a good confirmation / exit indicator to track big money moves.
Good luck my trading brother and sisters, hope this helps us all take some money away from these pig, selfish rich bastards :)
Release Notes
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Did my best attempt to make an easier to read version for all users. I will do a quick run down here and later next week release a tutorial video.
PURPOSE To understand the true sentiment of the market (bullish or bearish) as indicated by volume, volatility, and individual candle price action.
How to Use The signal line is our trend indicator, it is essential a moving average of the VSI. When it is above 0, there is indication that there is an overall bullish bias. When it is below 0, there is indication that there is an overall bearish bias. The signal line changes color based on its own change in value, green means bullish momentum, a red means bearish.
Note: N means the number of days back the indicator views for the max/min for comparisons The green columns show the relative strength of the volume for the given bar is bullish. At a max strength of 1.0 (meaning highest bullish strength in N) and min of 0. The red columns show the relative strength of the volume for the given bar is bullish. At a max strength of -1.0 (meaning highest bearish strength in N) and a min of 0. The gray columns represent the strengths of previous strength ratings for the opposite side, useful for comparing when the overall bias of the market is given between the bulls and the bears.
Release Notes
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*Clarity and bugfix update*
Colors of bullish/bearish bars are now customizable. Fixed a bug where the number of days past variable was calculating incorrectly. Should now properly look back as far as 2000 bars.
Note: Fixing this bug made me a realize that a spike in volume (news events) can cause the bars to seem disproportionately small, will work on a fix for this, but in the meantime just keep in mind that small bars to do not necessarily mean no strength of volume; the important aspect is how the bars compare to their most RECENT counterparts.
Release Notes
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Updated Default Settings for Day Trading (Those who trade timeframes above 1hr I suggest playing with the Number of Days variable!). Updated bar calculations for more accurate bars with less "noise".
(For those waiting on my video tutorial, it IS in the works, I am just having way too much fun animating it, and I'm trying to create quality--I mean it will probably look terrible but I want the content to be good!)
Release Notes
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HUGE UPDATE!
Preface Sorry for anyone waiting for a Youtube tutorial; I just couldn't find the time to make a product I was happy with (and so it isn't happening). Oh well, you all will just have to take the time to learn to use this complicated beauty... Or will you? This update features a very handy view to simplify this indicator and yes... It comes equipped with easy entry signals!
Change List:
Simple Mode.
Complex/Histogram Mode (classic version).
Smoother VSI calculations with better reaction to market changes.
Ability to change the calculations of price action via changing the weighting given to the wicks.
How to use with the new changes: Simple mode is made for those not bold enough to dive into the true power of the classic version, or who just like a cleaner look. Bullish Color circles will be produced on candles that suggest a shift in strength, and could possibly be a good entry. NOTE: Don't take every signal. It is up to your further analysis to filter out the false signals and determine the correct direction. The Bearish Color signal line is best used as an indicator for trend momentum. Steep slope = strong trend. Flat slope = weak/undecided trend.
Histogram mode is a powerful beast. If you want to unlock the power, do some backtesting, draw your own conclusions. No free handouts on this one (that's what simple mode is for).
Finally, this is probably the VSI's last form, as I have fixed most of the stuff about it that made me unhappy, and I am moving on, into the world of professional trading. I will eventually comeback and continue to give to the community once I have successfully made it, but until then, hope you guys enjoy! Please share this indicator with as many struggling traders as you can and I wish you all the best of luck! Remember to manage your risk!
I was (am) a little drunk when I uploaded this, mean to say:
If Sell Strength is below the red line, it means it has significant volume and price action leaning bearish.
In the release notes.
thatr
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@Caldris, In Caldris we trust
barnacle999
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It's not clear how the histogram works. What does the gray bar represent that is equal to and above or below the colored bar? What does it mean if a red/green bar is above the middle line or below?
SinlessTrading
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Hopefully the new layout is easier to understand. Let me know if there is anything confusing, but please play with it a little bit first before you ask your Q. I will be doing a detailed tutorial video and that will go live sometime this week. Thanks guys.
SinlessTrading
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@Caldris, Still working on the video in case anyone reads this comment. (I am very bad with ETA's sorry!)
Will post link here and also on reddit in r/trading and r/forex when it is complete!
joshuawroble
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Thank you! I am excited to back test this!
stsms13
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@joshuawroble, stupid question but, how do you back test?
SinlessTrading
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@stsms13, You can either do it manually or programmatically, but the latter requires knowing to code in pine script (the trading view code). You can manually back test by looking at good entries on the chart and lining it up to the indicator. You then count how many entries it was able to predict correct (based on a rule like: buying when it crosses above 0 and selling when it crosses below) and how many it got wrong. You then change the settings and try again.
It's basically a very tedious process, but I assure you with this baby it will be very rewarding. Best of luck!
SinlessTrading
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@joshuawroble, Excited to hear your results (sorry if my updates messed you up in anyway, I assure you, they were needed)