The idea behind it is that consists of two parts. The driving theory is the basic law of .
Part 1: consists of shares traded at an equilibrium price. An equal number of buyers and sellers are present during this . This area is displayed as the upper and lower shadows on a single . For this indicator, traded in equilibrium is not included in the display.
Part 2: consists of shares that are not traded at an equilibrium price, driving price up or down for the time period. In this , buyers or sellers are not present in equal numbers. This area is displayed as the body of the . This indicator focuses on this part of .
VPT_OBV plots only the that occurs at the difference in price between the open and the close. To achieve this, is divided by the difference between the high and the low (in pennies). Next, the difference between the open and close is calculated (in pennies). is then divided by the difference in the high and low, to get the amount of needed to move the asset up or down by $0.01 during the time period. This number is then multiplied by the difference between the open and close.
VPT_OBV plots the outcome as a cumulative total. A of the VPT_OBV is thrown in to provide smoothing.
study("VPT_OBV") length = input(20, minval=1, title="SMA Length") hilow = ((high - low)*100) openclose = ((close - open)*100) vol = (volume / hilow) spreadvol = (openclose * vol) VPT = spreadvol + cum(spreadvol) SMA = sma(VPT,length) plot(VPT, color=green, style=line, linewidth=1 ) plot(SMA, color=blue, style=line, linewidth=2)