Volume Exhaustion [AlgoAlpha]

Introducing the Volume Exhaustion by AlgoAlpha, is an innovative tool that aims to identify potential exhaustion or peaks in trading volume, which can be a key indicator for reversals or continuations in market trends 🔶.

Key Features:
* Signal Plotting: A special feature is the plotting of 'Release' signals, marked by orange diamonds, indicating points where the exhaustion index crosses under its previous value and is above a certain boundary. This could signify critical market points 🚨.

Calculation Length Customization: Users can adjust the calculation and Signal lengths to suit their trading style, allowing for flexibility in analysis over different time periods. ☝️
Pine Script®
len = input(50, "Calculation Length") len2 = input(8, "Signal Length")
Visual Appeal: The script offers customizable colors (col for the indicator and col1 for the background) enhancing the visual clarity and user experience 💡.
Pine Script®
col = input.color(color.white, "Indicator Color") col1 = input.color(color.gray, "Background Color")
Advanced Volume Processing: At its core, the script utilizes a combination of Hull Moving Average (HMA) and Exponential Moving Average (EMA) applied to the volume data. This sophisticated approach helps in smoothing out the volume data and reducing lag.
Pine Script®
sv = ta.hma(volume, len) ssv = ta.hma(sv, len)
Volume Exhaustion Detection: The script calculates the difference between the volume and its smoothed version, normalizing this value to create an exhaustion index (fff). Positive values of this index suggest potential volume exhaustion.
Pine Script®
f = sv-ssv ff = (f) / (ta.ema(ta.highest(f, len) - ta.lowest(f, len), len)) * 100 fff = ff > 0 ? ff : 0
Boundary and Zero Line: The script includes a boundary line (boundary) and a zero line (zero), with the area between them filled for enhanced visual interpretation. This helps in assessing the relative position of the exhaustion index.
Customizable Background: The script colors the background of the chart for better readability and to distinguish the indicator’s area clearly.

Overall, Volume Exhaustion [AlgoAlpha] is designed for traders who focus on volume analysis. It provides a unique perspective on volume trends and potential exhaustion points, which can be crucial for making informed trading decisions. This script is a valuable addition for traders looking to enhance their trading experience with advanced volume analysis tools.

Release Notes

Removed a redundant input

Release Notes

Fixed a typo in the input names

Open-source script

In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.

For quick access on a chart, add this script to your favorites — learn more here.

AlgoAlpha

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Code: ALPH4

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Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

Open-source script

For quick access on a chart, add this script to your favorites — learn more here.

AlgoAlpha

Also on: