B3 VWM is a momentum indicator that responds to the change of price in relationship to volume. In the end the final formula is the classic physics test question of p=mv where p is momentum, m is mass and v is velocity. In this indicator mass is the amount of volume it took to move the price where it did, and velocity is the change in price expressed as a percentage of the bar range. Then, the indicator goes through some filtering to help display the line. Should appear with very little lag work it to find the perfect bar for reversals.
This can be thought of as directional volume times directional momentum index, but truly it is not these literally, as the script doesn't discern how many contracts flew to the bid or to the ask for separation. So with this momentum indicator you can hopefully get a feel of the volume flow, yet still use this like a traditional momentum oscillator. Look to hit the reversals at peaks, and use caution when trading longs when this indicator is negative, and vise versa. There can be divergence in this oscillator, and you can help remedy poor divergences by adjusting the smoothness or the flatness of the indicator to suit your chart. Also the dead zone and mid zone are likely in need of adjustments depending on volume flow and price changes for that symbol and resolution. Defaults are a great starting point for most charts 5m to day. Swing traders might enjoy a length of 8-10 to rid some quick changes of direction in the indicator. Love to have things like this up with pivot studies for level reversal entries, like the few on the shared oil chart.
Enjoy, and I hope you like some of my other proprieties too. Feel free to comment! ~B3
Could you allow access to this code? I've messaged @HammondB3 privately.
Felixbtc
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Hi, this is interesting strategy. Can i have an access to the code? Thanks in advance.
taylo88885
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Would it be possible to program your study to indicate the closing price at which the study will trigger a change, rather than the studies indicator value?
Example: would like to know in advance what the closing price would need to be when your study indicator crossed its threshold level for direction change.
HammondB3
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@taylo88885, I have been working on this method of printing in the future bars of other platforms. It is not an easy formula to create but it can be done in other platforms. I have yet to make one like this in T-View. I will reply again if I get that working.
sk12722
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Hi....very interesting strategy......quite novel ! Thanks for sharing......how has been your back testing result ? rgds
HammondB3
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I have yet to make the strategy in TV, however, in my easylanguage strategies, trading this indicator alone currently doing well on ES and CL 60m, and over-trades small time-frames for too many little trades. Algo trading volume flow is tough and needs the market conditions to support success, as do many systems. So what I typically do with any volume related study is use it as a secondary indicator for entry/exit timing. This method works well manually and when set up in a confluence algorithm.