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$VOLD Divergence Indicator for ThinkorSwim

BenTen

Administrative
Staff
VIP
Here is an indicator that shows divergences between $VOLD and $SPY. A divergence happen when the price disagree with an indicator or an index. In this case, it's the $VOLD index. VOLD is the difference between the up volume and down volume on the NYSE.

How to trade:

  • When the price of SPY is going up while $VOLD is heading lower, we have a bearish divergence = short
  • When the price of SPY is going down while $VOLD is heading higher, we have a bullish divergence = long
You don't need an indicator for this, just create a side-by-side chart in ThinkorSwim and have both tickers on display. Or you can use the following indicator and only need to have one chart. Pick whichever works best for you.

I put this indicator together so that I can quickly check for divergences all in one chart.

thinkScript Code

Code:
# VOLD and SPY Divergences
# Assembled by BenTen at useThinkScript.com
# Discussion https://usethinkscript.com/threads/vold-divergence-indicator-for-thinkorswim.715/

declare lower;

input symbol_1 = "SPY";
def IsUp = close > open;
def IsDown = close < open;
def U = close("$UVOL");
def D = close("$DVOL");
def UDL = U - D;

plot volume;
def volume_confirm = UDL > UDL[5];
def volume_confirm2 = UDL > UDL[5];

volume.SetPaintingStrategy(paintingStrategy.SQUARED_HISTOGRAM);
volume.assignValueColor(if volume_confirm then Color.green else Color.red);

if (GetUnderlyingSymbol() == symbol_1)
{
  volume =  UDL;
}
else
{
  volume = double.nan;
}

AddLabel(yes,"SPY Only", color.white);

assignPriceColor(if volume_confirm then color.green else color.red);

Here's how it works:

The direction of the candles is based on $SPY. The color of the candles is based on $VOLD. If you see SPY moving down, but the candles remains green, then there is a possible bullish divergence. Same goes for when SPY is moving up, but the candles are red, there is a potential bearish divergence.

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This method is just one way of utilizing the market internals to trade. I heard some people also use $ADD and $TICK. Here's a quick overview of Market Internals.
 
Last edited:

john3

Active member
2019 Donor
@BenTen Would you please include the URL of the thread in the study's header. Just makes it easier to go back to it if needed. Thank you.
 

Charles

New member
Lifetime
I like this indicator, but was wondering if it would be useful to color the divergent bars a different color. For example, a divergent green bar would be colored a lighter shade of red and a divergent red bar a lighter shade of green. This would keep the divergent trend easy to see, but give a bit more information.
 

BenTen

Administrative
Staff
VIP
@Charles You would still have to identify the divergence on your own. The coloring just suggest that there might be a divergence. See the examples I provided. SPY going up but the candles are red (this suggest there might be a bearish divergence).
 

BenTen

Administrative
Staff
VIP
@tdvayreda Pine script and thinkScript are two different language. It won't work out of the box. You will need to convert it to pinescript.
 

tdvayreda

New member
Thank you for this quick response. One more question? Is there a program to convert this script? Or do I have to write it myself in pinescript?
Tnx
 

we29125

Member

Would this code work ? @BenTen

Code:
# $TICK and SPY Divergences
# Assembled by BenTen at useThinkScript.com
# Discussion https://usethinkscript.com/threads/vold-divergence-indicator-for-thinkorswim.715/

declare lower;

input symbol_1 = "SPY";
def IsUp = close > 0;
def IsDown = close < 0;
def UDL = close("$TICK");

plot volume;
def volume_confirm = UDL > UDL[5];

volume.SetPaintingStrategy(paintingStrategy.SQUARED_HISTOGRAM);
volume.assignValueColor(if volume_confirm then Color.green else Color.red);

if (GetUnderlyingSymbol() == symbol_1)
{
  volume =  UDL;
}
else
{
  volume = double.nan;
}

AddLabel(yes,"SPY Only", color.white);

assignPriceColor(if volume_confirm then color.green else color.red);
 
Last edited:

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