The time has finally arrived to simplify how we use the volume indicator on our charts. This is a post on what “simple” volumes are, & how to use them on Tradingview.
The Simple volume indicator is minimalistic, in that, instead of introducing more bells & whistles, it strips away the conventional volume indicator from a lot of “noise”, & help narrow our focus on actionable volume bars only.
The conventional volume indicator is full of ‘noise’ in that all volume bars are given the same importance. Color & size are the two informations they provide. But this information is “across the board”, irrespective of when it’s important enough or not.
A moving average of the volume helps filter out above average volumes as significant ones. If the rest are inconsequential, why do they need equal amount of our attention?
Simple volume displays only 3 type of volume bars prominently: blue, green & red.
Blue bars: Pocket Pivot Volumes (PPV), that is an up-day volume which is greater than any down-day volume of the last 10 trading days.
Red bars: Down-day volumes that are greater than 50-period moving average of the volume.
Green bars: Up-day volumes that are greater than 50-period moving average of the volume.
Other than these three, all other volumes are “noise” & need not be kept into any actionable consideration. All these inconsequential bars are dark grey. Moving average of the volume is also purposely hidden, as the dark grey bars themselves are indication of a below-average volume .
Rather than looking at each bar & comparing it to the overlying moving average line, the color scheme itself is self-explanatory, & devoid of distractions.
While initiating a long entry, we need to look out for only these 3 volume bars, & arrive at our decision. PPVs are the best indicator of institutional accumulation. Multiple PPVs in a consolidation base, & in a breakout candle are very bullish signals.
RRV (recent red volumes) are indicative of unconsumed supply. Either the highs of those red days be taken out, or these RRVs be suceeded later by PPVs or higher RGVs (recent green volumes).
LINK
Here is the link of the Tradingview script for Simple volumes:
UPDATES
Update 28-Aug-2022
Added orange bars to depict very low dry volumes.
Added Relative volume label in percent.
Users can now change the colors of the various volume bars.
Update 20-Mar-2023
Lowest volume in a quarter (LVQ) or in an year (LVY)
Average dollar volume (with option to display in millions or crores)
Volume RR (run rate) or volume buzz
Up/Down volume ratio
Update 26-Mar-2023
Now includes labels for:
Highest Volume Ever (HVE)
Highest Volume in Over a Year (HVY)
Highest Volume in a quarter (HVQ)
Learnt these from @RaiTrades who uses the Highest Volume Edge to gauge institutional accumulation.
Update 10-Sep-2023
Option to change the table's location, size & layout (horizontal or vertical). You can choose to display all the columns or only the ones of your choice.
Option to display Power volumes via background headlight. (#IYKYK)
Option to change pocket pivot length from 10 to either 5 or 20.
Lots of tooltips in the settings (& also on hover)
1-click dark mode
Update 13-Jan-2024
Provides an option to display the Volume Buzz in place of the Relative Volume (Rvol).
Provides an option to not include the current day volume while calculating the volume average for Rvol
LINK
Here is the link of the Tradingview script for Simple volumes:
Hope you find this useful.
what is the significance of R Vol? How to read it?