…make a Volume indicator that blows away other indicators?

[IHopeToLearn]

I would like to challenge all who participate in “useThinkScript” with this question.

I have been thru maybe ALL the indicators.
LAGGING (old news).
LEADING (I’d like to see the future, ah not quite)
COINCIDENT (the BIG picture, created by the Elite & Politicians, ahh No thanks)
*https://www.investopedia.com/ask/answers/what-are-leading-lagging-and-coincident-indicators/

One indicator that moves all of these indicators is VOLUME (Buyers/Sellers).
The King of indicators appears to be VOLUME!

But I thought Price Action was King?

I did a video of my trades and compared frame by frame what moved.
Usually the indicators discussed didn’t (always) move.
But when the Candle (Price action) moved the Volume moved immediately and maybe first.

If I am right we wasted a lot of time creating/using all of the above indicators.

Should the focus be on how to make a Volume indicator that blows away other indicators?

My current go to Volume is: https://www.floatchecker.com/blog/better-volume-indicators-for-thinkorswim.
Simple (which I REALLY prefer) and I think effective, but NOT ENOUGH.

I am currently looking at the DTS sellers “DTS_Scalping_Indicator”, promising(?).
https://usethinkscript.com/threads/...ators-labels-for-thinkorswim.8466/post-129366

The challenge is creating something like the “ThermoMixIndicator” below but with various VOLUME concepts rolled into one. Maybe we can call it “VolumeMixIndicator”.

Looking in the Edit Studies panel searching Volume (not 100% sure which ones, suggestions?) maybe it could include OnBalanceVolume, PriceandVolumeRank, ThermoSwamiIntradayVolume?, PositiveVolumeIndex & NegativeVolumeIndex, VolumeOsc? You guys would know better which is the ideal combo.

The “ThermoMixIndicator” takes into account Momentum, CCI, RSI, MOBO, CI, ADX and Trend.
And very simple to use, “Red light Green light, 1,2,3” and it shows the trend.
https://usethinkscript.com/threads/...pt-your-one-stop-research-shop.300/#post-4881

Thanks for reading this. I hope you agree with my thought and have the skills (unlike me) to write a script.

 

[armybender]

Yes, volume is important, but remember you can also see volume without actually seeing volume.
Look at a chart sloping up to see where buyers are entering. Similar for a chart sloping down with sellers.

By reading the bars, they will tell you where buyers and sellers are. Trade WITH them as they move the price.

Volume-based indicators are fine, but would not use in isolation or without understanding what the price action says is happening.

 

[Glefdar]

I would like to challenge all who participate in “useThinkScript” with this question.

I have been thru maybe ALL the indicators.
LAGGING (old news).
LEADING (I’d like to see the future, ah not quite)
COINCIDENT (the BIG picture, created by the Elite & Politicians, ahh No thanks)
*https://www.investopedia.com/ask/answers/what-are-leading-lagging-and-coincident-indicators/

One indicator that moves all of these indicators is VOLUME (Buyers/Sellers).
The King of indicators appears to be VOLUME!

But I thought Price Action was King?

I did a video of my trades and compared frame by frame what moved.
Usually the indicators discussed didn’t (always) move.
But when the Candle (Price action) moved the Volume moved immediately and maybe first.

If I am right we wasted a lot of time creating/using all of the above indicators.

Should the focus be on how to make a Volume indicator that blows away other indicators?

My current go to Volume is: https://www.floatchecker.com/blog/better-volume-indicators-for-thinkorswim.
Simple (which I REALLY prefer) and I think effective, but NOT ENOUGH.

I am currently looking at the DTS sellers “DTS_Scalping_Indicator”, promising(?).
https://usethinkscript.com/threads/...ators-labels-for-thinkorswim.8466/post-129366

The challenge is creating something like the “ThermoMixIndicator” below but with various VOLUME concepts rolled into one. Maybe we can call it “VolumeMixIndicator”.

Looking in the Edit Studies panel searching Volume (not 100% sure which ones, suggestions?) maybe it could include OnBalanceVolume, PriceandVolumeRank, ThermoSwamiIntradayVolume?, PositiveVolumeIndex & NegativeVolumeIndex, VolumeOsc? You guys would know better which is the ideal combo.

The “ThermoMixIndicator” takes into account Momentum, CCI, RSI, MOBO, CI, ADX and Trend.
And very simple to use, “Red light Green light, 1,2,3” and it shows the trend.
https://usethinkscript.com/threads/...pt-your-one-stop-research-shop.300/#post-4881

Thanks for reading this. I hope you agree with my thought and have the skills (unlike me) to write a script.

Volume is generally considered to validate or confirm signals because thinner volume can cause the signals to have less predictive value since e.g. in such case they’re trying to interpret or represent a trend with a scarcity of market participation backing that up (which is kind of oxymoronic if you think about it). That being said, a huge amount of volume occurs in dark pools and if a trader is thinking that one thing is “king” for price move forecasting that usually means they are missing a bigger picture understanding that includes factors such as market internals, options flow activity, etc.

If you still want to pursue this idea further then a good conceptual starting point would be to define what volume indicators would not be redundant with each other. If you just throw a bunch of them together then a lot of the signals would likely be just different math for describing the same behavior, which means that their combination would have little value compared to being interpreted separately.

Edit: one other point I’ll share as an aside is that extreme thinking (as a thinking style or emotional tendency) will typically doom traders to failure. I have struggled with that quite a lot because my personality and temperament are naturally dramatic. But that must be overcome and replaced with a temperate and observational thinking style or else a trader is liable to make emotion driven mistakes (since thought and perception that are extreme cannot help but result in feelings that are extreme, which cannot help but cause reactions that are extreme, and extreme reactions are the major way that the market fools people and takes their money). Trading seems less about nerves of steel than just being able to stay focused and relaxed without having extreme thoughts, feelings or reactions to what is happening in the market. Finding one pattern or interpretable bit of information that gives you an edge and mastering it is more likely to result in success than trying to create a holy grail. I wish you the best of luck on your journey of learning and just wanted to offer a couple of thoughts in case they’re helpful. All the best.

 

[IHopeToLearn]

Volume is generally considered to validate or confirm signals because thinner volume can cause the signals to have less predictive value since e.g. in such case they’re trying to interpret or represent a trend with a scarcity of market participation backing that up (which is kind of oxymoronic if you think about it). That being said, a huge amount of volume occurs in dark pools and if a trader is thinking that one thing is “king” for price move forecasting that usually means they are missing a bigger picture understanding that includes factors such as market internals, options flow activity, etc.

If you still want to pursue this idea further then a good conceptual starting point would be to define what volume indicators would not be redundant with each other. If you just throw a bunch of them together then a lot of the signals would likely be just different math for describing the same behavior, which means that their combination would have little value compared to being interpreted separately.

Edit: one other point I’ll share as an aside is that extreme thinking (as a thinking style or emotional tendency) will typically doom traders to failure. I have struggled with that quite a lot because my personality and temperament are naturally dramatic. But that must be overcome and replaced with a temperate and observational thinking style or else a trader is liable to make emotion driven mistakes (since thought and perception that are extreme cannot help but result in feelings that are extreme, which cannot help but cause reactions that are extreme, and extreme reactions are the major way that the market fools people and takes their money). Trading seems less about nerves of steel than just being able to stay focused and relaxed without having extreme thoughts, feelings or reactions to what is happening in the market. Finding one pattern or interpretable bit of information that gives you an edge and mastering it is more likely to result in success than trying to create a holy grail. I wish you the best of luck on your journey of learning and just wanted to offer a couple of thoughts in case they’re helpful. All the best.

Hi Imk99m,
Thanks for your response, the two Volume Indicators I am currently evaluating as mentioned are the...

"My current go to Volume is: https://www.floatchecker.com/blog/better-volume-indicators-for-thinkorswim."
and the
"...DTS sellers “DTS_Scalping_Indicator”, promising(?).
https://usethinkscript.com/threads/...ators-labels-for-thinkorswim.8466/post-129366"

I did a file to file comparison and they appear to be using the same math...
def Buying = V * (C - L) / (H - L);
def Selling = V * (H - C) / (H - L);
But I really don't know this stuff and would love someone better suited to evaluate them.

I do like the DTS's buyer/seller lines (w/dots on the bars) part (if it's accurate?) but like all these indicators I have to take them as they are because of my ignorance in these matters.

So are these two giving the same results and accurate?
If that's the case I may settle for the time being for DTS's.

Unless the useThinkScript group takes my challenge and blows it away

Thank you

 

[MerryDay]

FYI: ToS data feeds do not provide buying and selling volume.
Scripts with these types of def statements:

def Buying = V * (C - L) / (H - L);
def Selling = V * (H - C) / (H - L);

are not Volume Indicators.

These are called Volume Pressure Indicators.
They are price / candle pattern studies that attempt to predict who is in control using the high, low, close of the price bar not volume.

Pros: Candle Patterns are bar-by-bar no-lag price action studies.
Cons: they are a bar-by-bar microanalysis with no correlation to any bigger picture.
So while not useful in isolation they can be powerful when combined w/ other indicators.
https://usethinkscript.com/threads/...nt-to-successful-trading-in-thinkorswim.6114/

Every Volume Pressure Indicator is different (not better, not blown away, just different).
They use the Same Math but get Different Results because:

• how the calculations are used
• what settings, IE: lookbacks, lengths are used
• what they are combined with (remember that whole "cannot be used in isolation" thing)
• the method of plotting

For instance, the VIP Volume Pressure Indicator is combined with price amplitude to produce a Colored Tape Reader. https://usethinkscript.com/threads/volume-tape-reader.16118/
While it starts out with the same calculations; the information that is provides is not at all the same as the two that you ascribe to. That doesn't mean the VIP version blows away the others. Just means it is different.

Good news, if you are looking for Volume Pressure Studies.
Dozens have been consolidated into the 7 pages found here:
https://usethinkscript.com/threads/...ssure-indicators-labels-for-thinkorswim.8466/
And here are more sorted by popularity:
https://usethinkscript.com/search/1286849/?q=buysellpressure&t=post&c[title_only]=1&o=replies&g=1

Instructions for using Volume Pressure Indicators:
https://usethinkscript.com/threads/...-volume-pressure-like-this.14328/#post-122771
FYI, care needs to be exercised in choosing a Volume Pressure.
There are Volume Pressure Indicators that include lagging moving average calculations or other lagging indicators. The biggest benefit of Volume Pressure is that it is No-Lag! Anything that combines it with lagging calculations defeats the purpose of the indicator.
So it is important to review it on your chart to verify that it is doing what you think it is doing.

My Favorite Volume Indicators:
If you are interested in REAL volume?
I do have a few volume indicators which I tend to use more than others.
The way that they display provides clear analysis for me. BUT might be "clear as mud" to others.
So, I don't believe there are indicators that "blow away" all others.
https://usethinkscript.com/threads/favorite-volume-indicators-in-thinkorswim.15694/#post-126275


Hope this helps you on your quest.