Volume Exhaustion [AlgoAlpha]

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 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.

Versionshinweise:

Removed a redundant input

Versionshinweise:

Fixed a typo in the input names