Time Segmented Volume was developed by Worden Brothers, Inc to be a leading indicator by comparing various time segments of both price and volume. Essentialy it is designed to measure the amount of money flowing in and out of an instrument.
Time Segmented Volume was originally ported to TradingView by user @liw0 and later corrected by user @vitelot. I never quite understood how to read Time Segmented Volume until I ran across a version by user @Storma where they indicated when price would be long or short, but that code also utilized the incorrect calculation from user @liw0.
In an effort to make Time Segmented Volume more accessible and easier to read, I have re-coded it here. The calculations are based on the code from @vitelot and I have added direction indicators below the chart.
If the histogram (TSV) is greater than zero and greater than the moving average, price should be moving long and there will be a green box below the chart. If TSV falls below the moving average while still being greater than zero, the trend may be exhausting and has been coded to read Price Action Long - FAILURE with a black x below the chart.
If the histogram (TSV) is less than zero and less than the moving average, price should be moving short and there will be a red box below the chart. If TSV rises above the moving average while still being less than zero, the trend may be exhausting and has been coded to read Price Action Short - FAILURE with a black x below the chart.
At times, the moving average may be above zero while TSV is below zero or vice versa. In these situations the chart will indicate long or short based on whether or not TSV is greater or less than zero. It is possible a new trend may be forming as the moving average obviously lags, but also possible price is consolidating with little volume and causing TSV to oscillate close to zero.
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vickdee
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Hi. Someone pls explain...how is this any more leading than an ordinary PSAR? At least, with a PSAR, most of the time, i am at least in my posn. Not whipsawed out of a trade!
I could be wrong, maybe there is a subtlety lost on me but this TSV is about the same, if not worse, than a PSAR or its cousins like CM PSAR.
Thank you.
StephXAGs
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@vickdee, I'd recommend reading through the information Worden provides in the link I posted in the description to understand what their goal was. If it doesn't work for you that's ok *shrug*
I find TSV far more interesting for exits than entries, but with the right settings it could be useful for both. I personally don't believe you should ever rely on one indicator to determine whether you enter a trade, otherwise they will ALL whipsaw you back and forth to some degree.
vickdee
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@eylwithsteph, I am sorry, I did not mean to trivialize your work. I did read Worden's description (they too say that this is "another" indicator to use along with others). I am trying to understand how to make sense of this when it is so similar to PSAR. From my AI observations, I have found 2/17 for MA to work "reasonably" well. When I plugged those into here, I get a tight curve -- right now, studying this to see whether it means something, or it is another rabbit hole!
Best is to simply throw all of these "reasonable" indicators into a machine learning model, and let it figure out and show strong correlations. But that is another project altogether :(
Again, thank you for your work.
StephXAGs
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@vickdee, I don't think you trivialized it :) I simply don't have the answer as I've not compared it to PSAR. Backtesting can certainly be time consuming. I believe there are some NNFx Strategy codes floating around to assist with that, but off hand I'm unsure where they are. I find that indicators you can understand and easily read work best for trading. Anything too convoluted isn't worth a ton of effort, and what will make sense to some, won't make sense to others. The best way to review your hypothesis would to be reviewing them on a chart together and manually comparing where you're getting an entry signal or exit signal and how that could impact your profit. Then compare them both on a real time chart, say a 1 minute chart, to see how they react as price is changing quickly.
StephXAGs
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UPDATE: I am unsure why, but when using the link above to access the info re: TSV on Worden's website, the link errors out. If you would like to read more about TSV from Worden directly I recommend googling "Worden Time Segmented Volume" and select the worden.com result "Time Segmented Volume - Worden TC2000"