Volume Price Confirmation Indicator (VPCI) for ThinkorSwim

[BenTen]

VPCI or known as Volume Price Confirmation Indicator was developed by Buff Dormeier. It plots the relationship between the price trend and the volume.

The author states:
I believe a falling trend and falling VPCI is a bullish indication.
A falling trend and a rising VPCI is a bearish indication.

Additional signals can come from VCPI crossing its own moving average.
The indicator crossing above and below zero can offer useful signals to traders.
The indicator can be used over any timeframe with varying inputs.

In the Dow Award-winning paper, the test results are impressive and do demonstrate that the VCPI can increase trade reliability.
The author wisely notes that this is a tool that can help improve your performance, but it is not the Holy Grail.

You may find this excerpt interesting (full article):

> Fundamentally, the VPCI reveals the proportional imbalances between price trends and volume-adjusted price trends. An uptrend with increasing volume is a market characterized by greed supported by the fuel needed to grow. An uptrend without volume is complacent and reveals greed deprived of the fuel needed to sustain itself. Investors without the influx of other investors ( volume ) will eventually lose interest and the uptrend should eventually breakdown. A falling price trend reveals a market driven by fear. A falling price trend without volume reveals apathy, fear without increasing energy. Unlike greed, fear is self-sustaining, and may endure for long time periods without increasing fuel or energy. Adding energy to fear can be likened to adding fuel to a fire and is generally bearish until the VPCI reverses. In such cases, weak-minded investor's, overcome by fear, are becoming irrationally fearful until the selling climax reaches a state of maximum homogeneity. At this point, ownership held by weak investor’s has been purged, producing a type of heat death capitulation. These occurrences may be visualized by the VPCI falling below the lower standard deviation of a Bollinger Band of the VPCI, and then rising above the lower band, and forming a 'V' bottom.

thinkScript Code

Per author: the shortTerm/longTerm lengths need tuning for your instrument. The default 5/20 is not optimal

#//
#// @author LazyBear
#//
#// If you use this code in its orignal/modified form, do drop me a note.
#//
#study("Volume Price Confirmation Indicator [LazyBear]", shorttitle="VPCI_LB" )
# Converted to TOS by Rigel 2018.
#
declare lower;
input shortTerm = 5;
input longTerm = 20;
def agg=aggregationPeriod.MIN;
input src = close;
input BBlength = 20; #, title="BB Length"
input mult = 2.5;
def vpc = vwap(period=longTerm*agg) - Average(src, longTerm);
def vpr = vwap(period=shortTerm*agg) / Average(src, shortTerm);
def vm = Average(volume, shortTerm) / Average(volume, longTerm);

plot vpci = vpc * vpr * vm;
vpci.setDefaultColor(color.green);
plot zero=0;
zero.setdefaultColor(color.cyan);

input lengthMA=8 ; #, "VPCI MA Length"
plot MA = Average(vpci, lengthMA);
MA.setdefaultColor(color.pink);

def bb_s = vpci;
plot basis = Average(bb_s, BBlength);
def dev = (mult * StDev(bb_s, BBlength));
plot upper = (basis + dev);
plot lower = (basis - dev);
basis.setdefaultColor(color.white);
basis.setPaintingStrategy(PaintingStrategy.line);
basis.setStyle(curve.SHORT_DASH);

Shareable Link

https://tos.mx/DbMSRi

This indicator was converted to ThinkorSwim by rigel from the TradingView version developed by LazyBear.

 

[netarchitech]

Doesn't display for me. The code looks fine. No gripes from the compiler. Puzzling...

 

[BenTen]

@netarchitech You have to enable pre-market if you haven't aldready

 

[netarchitech]

@BenTen I finally see it! On the 5 min... Thanks again, BenTen 😀

 

[TapthatAsk]

@

VPCI or known as Volume Price Confirmation Indicator was developed by Buff Dormeier. It plots the relationship between the price trend and the volume.

You may find this excerpt interesting (full article):

thinkScript Code

Per author: the shortTerm/longTerm lengths need tuning for your instrument. The default 5/20 is not optimal

#//
#// @author LazyBear
#//
#// If you use this code in its orignal/modified form, do drop me a note.
#//
#study("Volume Price Confirmation Indicator [LazyBear]", shorttitle="VPCI_LB" )
# Converted to TOS by Rigel 2018.
#
declare lower;
input shortTerm = 5;
input longTerm = 20;
def agg=aggregationPeriod.MIN;
input src = close;
input BBlength = 20; #, title="BB Length"
input mult = 2.5;
def vpc = vwap(period=longTerm*agg) - Average(src, longTerm);
def vpr = vwap(period=shortTerm*agg) / Average(src, shortTerm);
def vm = Average(volume, shortTerm) / Average(volume, longTerm);

plot vpci = vpc * vpr * vm;
vpci.setDefaultColor(color.green);
plot zero=0;
zero.setdefaultColor(color.cyan);

input lengthMA=8 ; #, "VPCI MA Length"
plot MA = Average(vpci, lengthMA);
MA.setdefaultColor(color.pink);

def bb_s = vpci;
plot basis = Average(bb_s, BBlength);
def dev = (mult * StDev(bb_s, BBlength));
plot upper = (basis + dev);
plot lower = (basis - dev);
basis.setdefaultColor(color.white);
basis.setPaintingStrategy(PaintingStrategy.line);
basis.setStyle(curve.SHORT_DASH);

Shareable Link

https://tos.mx/DbMSRi

This indicator was converted to ThinkorSwim by rigel from the TradingView version developed by LazyBear.

Are the 5/20 lengths good for short term or long term? This looks like a good lil tool to look at. @MerryDay @BenTen

The lengths I honestly don't know what they really mean or is supposed to determine @MerryDay

 

[MerryDay]

The lengths I honestly don't know what they really mean or is supposed to determine @MerryDay

This indicator is definitely geared toward more experienced technical chartists.
It can NOT be used until you optimize the lengths!

To find out how lengths affect your chart analysis.
Put in a much higher number in the 1st length variable. Analyze it over different timeframes, across history and with multiple instruments.
What difference did it make? Now make it a much lower number. Ask yourself the same questions.
Now do the same with the 2nd length variable.

This is how you become intimate with your indicators, you have to ask it questions and learn from its answers.
Doing this, will provide you a much deeper understanding of what your chart is telling you.

For more information about the VPCI:
https://cmtassociation.org/video/volume-price-confirmation-indicator/
https://www.stockfetcher.com/forums/General-Discussion/VPCI-indicator/52357/20

 

[TapthatAsk]

To find out how lengths effect your chart analysis.
Put in a much higher number in the 1st length variable. Analyze it over different timeframes, across history and with multiple instruments.
What difference did it make? Now make it a much lower number. Ask yourself the same questions.
Now do the same with the 2nd length variable.

This is how you become intimate with your indicators, you have to ask it questions and learn from its answers.
Doing this, will provide you a much deeper understanding of what your chart is telling you.

https://cmtassociation.org/video/volume-price-confirmation-indicator/
https://www.stockfetcher.com/forums/General-Discussion/VPCI-indicator/52357/20

The links are good info, you've convinced me to let my indicator seduce me, you should teach a class "Getting up close and personal with your indicators" I would pay for it