Volume Exhaustion [AlgoAlpha]

7. Jan. 2024

Introducing the Volume Exhaustion by AlgoAlpha, is an innovative tool that aims to identify potential exhaustion or peaks in trading volume, which can be a key indicator for reversals or continuations in market trends 🔶.

Key Features:
* Signal Plotting: A special feature is the plotting of 'Release' signals, marked by orange diamonds, indicating points where the exhaustion index crosses under its previous value and is above a certain boundary. This could signify critical market points 🚨.

• Calculation Length Customization: Users can adjust the calculation and Signal lengths to suit their trading style, allowing for flexibility in analysis over different time periods. ☝️
  

  len = input(50, "Calculation Length")
  len2 = input(8, "Signal Length")

• Visual Appeal: The script offers customizable colors (col for the indicator and col1 for the background) enhancing the visual clarity and user experience 💡.
  

  col = input.color(color.white, "Indicator Color")
  col1 = input.color(color.gray, "Background Color")

• Advanced Volume Processing: At its core, the script utilizes a combination of Hull Moving Average (HMA) and Exponential Moving Average (EMA) applied to the volume data. This sophisticated approach helps in smoothing out the volume data and reducing lag.
  

  sv = ta.hma(volume, len)
  ssv = ta.hma(sv, len)

• Volume Exhaustion Detection: The script calculates the difference between the volume and its smoothed version, normalizing this value to create an exhaustion index (fff). Positive values of this index suggest potential volume exhaustion.
  

  f = sv-ssv
  ff = (f) / (ta.ema(ta.highest(f, len) - ta.lowest(f, len), len)) * 100
  fff = ff > 0 ? ff : 0

• Boundary and Zero Line: The script includes a boundary line (boundary) and a zero line (zero), with the area between them filled for enhanced visual interpretation. This helps in assessing the relative position of the exhaustion index.
  
  
• Customizable Background: The script colors the background of the chart for better readability and to distinguish the indicator’s area clearly.
  

Overall, Volume Exhaustion [AlgoAlpha] is designed for traders who focus on volume analysis. It provides a unique perspective on volume trends and potential exhaustion points, which can be crucial for making informed trading decisions. This script is a valuable addition for traders looking to enhance their trading experience with advanced volume analysis tools.

13. Jan. 2024

Versionshinweise

Removed a redundant input

26. Jan. 2024

Versionshinweise

Fixed a typo in the input names