Easily identify volume spikes. This indicator identifies volume spike bars and highlights them to facilitate studying volume spikes alongside price action.
CONCEPTS
Bars with abnormally high volume indicate market interest and are worth a closer look. They could indicate market exhaustion or act as future areas of S/R (as shown by the horizontal rays above).
The question is the level of volume that should prompt our interest.
Here, we use the Upper Band of a long-term Bollinger Bands applied on volume to identify bars with outlier volumes. (The lower panel of the chart shown serves to illustrate this concept, and is not included in this indicator.)
HOW TO USE
Volume spike bars will be highlighted in green by default. You may study how the market price action reacts to these volume spikes without the distraction of a separate plot.
Parameters
Period - Lookback period for the Bollinger Bands applied on volume.
Multiple - Multiple for the same Bollinger Bands.
Feel free to experiment with the parameters, but the default parameters work well for me on daily charts. However, for intraday timeframes, due to the typical skewing of volume to the beginning and end of a session, they do not work as well.
Release Notes
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Add alert function for Volume Spikes
You can now set up alerts to detect Volume Spikes.
Hey! Great indicator. Do you think it would be possible to add an option to input what time range to use? Eg. (0900-12:00) this way if I wanted to I could dismiss the first volume spikes of the open and the last ones of the close for the cash session
galenwoods
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Great suggestion! I'll look into that, perhaps as a separate indicator for intraday analysis.
Lij_MC
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Great Indicator, could you please add Alerts for when volume spike is detected
galenwoods
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@Lij_MC, glad you like it! I'll definitely be adding alerts in my next update to this indicator.