This is the first robust implementation of volume based candlesticks (bars) on TradingView. This type of bar was describe in the book "Advances in Financial Machine Learning," written by Lopez de Prado, a well-known quant who has managed billions of dollars over the course of his career.
Volume Candlesticks (Bars) are bars that are indexed by total volume, with each set of N shares exchanged forming a separate bar.
This means that on CBTV chart a candle forms not after a specific time interval defined by the time frame of the chart, but when a determined volume was traded.
This approach to price sampling is much better than the time based one, because it does not oversample periods where nothing happens. Traditional candlestick charts show a lot of low volume bars without meaningful price changes in them.
The efficient price sampling results in better results when using volume based bars in machine learning forecasting models. They are also useful for technical analysis. Candlestick patterns on CBTV chart are more pronounced and have more predictive power.
Volume based bars can be constructed only for instruments where volume data is available. These are stocks, futures and crypto currencies.
When you run CBTV it appears in a separate window below the traditional time based chart.
CBTV will be used in pair with a helper indicator which is called Optimal Volume per Candle (OVPC).
When applied to a chart OVPC shows the optimal range for volume per candle to construct volume based candlesticks from this timeframe data. It appears in the blue box above the most recent candle of a standard time based chart.
When you set a Volume Per Candle parameter in CBTV make sure it is within the range that shows OVPC. In this case volume based chart will be easy to read and all the calculations will be performed with the high level of precision.
The most recent unfinished candle is marked with the different set of colors than historical candles. Unfinished candle is colored in orange if it is a falling candle, blue it it is a rising one.
If you leave the CBTV chart opened for a long time you can have multiple blue or orange candles on it. In this case press the “hide” icon with the eye sign twice (it’s on the left side of the indicator panel next to its input parameters). This will refresh the CBTV and remove the artifacts.
While everything comes Real-time you will see the orange or blue bars form but never update. All you need to do is REFRESH THE CHART. Hoping soon to update this with a version you wont have to refresh the chart.
Please drop a like and comment what you guys think and once again thank you Tradingview for such a great platform :)
Interesting. What would be practical uses of it? Asset gaining momentum? Topping out?
AngelAlgo
⋅
any thoughts?
roamingandy
⋅
Hey mate, thanks for this script; have been looking for a while for something like this. Where do I find the OVPC indicator? Best, Andrew.
dr_mua
⋅
Can you please also make an indicator where color of the candles change based on candle volume? Lets say, (for premarket, 10k volume, 30k another color, and for post market two different volumes)? So far, most of the indicators are relative, which isn't enough to understand the liquidity of the stock.
I very much like this tool. I also like NOT having a refreshed chart, as it seems to give pretty good historical data that can be tradable. Any way we can alter the script so we can get just the dynamic "histogram" of the price data? Thanks for sharing such a great tool!
Sukhavati
⋅
Hello sir, I think this is a great indicator, I think it has a lot of potential, but only if we can stack other indicators on the candles that are generated. I would love to see how this indicator can be fed into other ones, because for now I am having no luck with this. I will try and fork this code and I will post if I figure out which changes are necessary. Cheers!