BUY & SELL VOLUME TO PRICE PRESSURE by @XeL_Arjona

The BUY & SELL VOLUME TO PRICE PRESSURE indicator analyzes the relationship between price action and volume to quantify buying and selling pressure. By utilizing specialized power-balance algorithms, it identifies dominant market forces and trend shifts through volume-weighted oscillators and histograms.

Usage

The Usage section describes how the script can be used to identify market sentiment and potential trend reversals.

• Volume Pressure Histogram: This feature visualizes the dominant volume force. Columns plotted in the positive area represent the primary force for the period, while negative columns represent the counterforce acting against the dominant trend.
• Buy to Sell Convergence / Divergence (VPO): Operating similarly to a MACD, this oscillator measures the difference between buying and selling pressure averages. A reading above zero indicates a bullish dominant trend, while a reading below zero indicates a bearish dominant trend.
• Signal Confirmation: The histogram within the oscillator mode represents the difference between RAW volume pressures and normalized (filtered) signals, providing a secondary layer of confirmation for momentum changes.

Details

The indicator is built upon several core technical concepts:

• Power Balance Algorithm: Based on Vadim Gimelfarb’s "Bull and Bear Balance," the script calculates the internal strength of price movements relative to the high, low, open, and previous close.
• Volume Weighting: These power calculations are then multiplied by volume to derive Buy Pressure Volume (BPV) and Sell Pressure Volume (SPV).
• Normalization: The script includes a normalization filter inspired by Karthik Marar’s VSA work. This helps filter out high-frequency trading (HFT) noise and day-to-day volatility by comparing current volume against a long-term average.
• Smoothing: Moving averages (EMA and WMA) are applied to the raw data to create "Signal" lines that reduce erratic fluctuations.

Settings

• Base for FastMA Periods: Determines the smoothing length for the volume pressure averages.
• Buy to Sell Conv/Div Lookback: Sets the lookback period used for the normalization calculations and cumulative sums.
• Buy to Sell Convergence/Div OSC: Toggles between the raw volume pressure histogram view and the oscillator (MACD-style) view.
• Buy to Sell Conv/Div as cumulative: If enabled, the oscillator uses cumulative sums of volume pressure rather than instantaneous averages.
• Normalised (Filtered) Version: When checked, the indicator applies the normalization filter to clean market noise.

FAQ

How do I interpret the positive and negative columns?

In the standard view, positive columns show the strongest volume force (Buying or Selling) for that candle, while negative columns show the opposing counter-pressure. In the Oscillator view, the color and position relative to zero indicate the overall trend direction.

What is the difference between VPO1 and VPO2?

VPO1 typically represents the raw volume pressure relationship, while VPO2 represents the normalized or "Signal" version. Their convergence or divergence helps identify momentum strength.

How can I access this tool?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.