Volume variation
Trading volume is a measure of how much of a given financial asset has been traded over a period of time.
Looking at volume patterns over time can help get a sense of the strength or conviction behind advances and declines in specific stocks and entire markets.
Within this indicator, what strategy does Anny offer?
1. Volume variation between candles
2. Volume variation over average
1. Volume variation between candles
Logic of the algorithm:
- The logic of this algorithm is to trigger a signal when the volume of the last candle is a certain percentage (x%) higher than the volume of the previous candle.
- This strategy is designed to identify significant increases in trading volume between consecutive candles, which may indicate increased market activity or interest.
Configuration:
- Pre-configured for the candle of 30m.
- Fires when there's an increase of 200% in volume compared to the previous candle.
For example, if the volume of the last candle is twice (200%) the volume of the previous candle, a signal will be triggered, indicating a notable increase in trading activity.
2. Volume variation over average
Logic of the algorithm:
- In this strategy, the algorithm generates a signal when the volume of the last candle is a certain percentage (x%) higher than the average volume over a specified period.
- This approach helps identify instances where the current trading volume deviates significantly from the average, potentially indicating a notable change in market sentiment or activity.
Configuration:
- Pre-configured for the candle of 1 day (1d) over 120 periods (days).
- Fires when there's an increase of 10% in volume compared to the average volume over the last 120 days.
Hints💡
- To add further confirmation to these volume-based strategies, traders can combine them with other volume-related indicators or technical analysis tools. Utilizing complementary indicators can provide additional insights into the strength of price movements and potential trend reversals.
- As with any trading strategy, risk management is crucial. Traders should consider incorporating stop-loss orders and position sizing techniques to protect their capital and manage potential losses. Additionally, backtesting these volume-based strategies and analyzing their historical performance can provide valuable insights into their effectiveness before implementing them in real trading scenarios.