RedK EVEREX - Effort Versus Results Explorer

The RedK EVEREX indicator provides a visual exploration of Volume Price Analysis (VPA) and Wyckoff’s "Effort versus Result" law by comparing relative volume with price action to detect market imbalances and trend strength.

Usage

The Usage section describes how the script can be used to identify market conditions through its multi-layered visual output.

Volume Price Analysis (VPA) Interpretation

The indicator calculates a relative value for volume (Effort) and price movement (Result) compared to a user-defined lookback period.

• Balanced Action: When both the volume and price bands are equally strong or weak, the market is in equilibrium.
• Compression: A high volume band paired with a tiny price action band suggests "Effort without Result," often signaling a potential reversal or exhaustion.
• Ease of Move (EoM): A small volume band paired with a large price action band indicates the market is moving easily in a specific direction with little resistance.
• Validation: Increasing volume associated with trending price action confirms the sustainability of the current move.

Relative Rate of Flow (RROF)

The RROF is a +100/-100 oscillator derived from the normalized volume and price values. It functions similarly to a volume-weighted RSI and is used to detect shifts in bullish or bearish sentiment. Users can look for zero-line crossovers or divergences between the RROF and price to identify fading strength or emerging reversals.

Details

The script utilizes a proprietary Normalize() function to calculate relative values. Unlike a standard Stochastic function which can be distorted by extreme outliers, this normalization method categorizes data into tiers (e.g., very low, average, high, super high) to better mimic how a human trader perceives volume bars.

The indicator offers several visualization modes:

• Stacked Bands: Displays relative volume as a lower band and price strength as an upper band.
• Bias/Sentiment: An area plot showing long-term market direction.
• Bulls & Bears Pressure: Separate plots for buying and selling pressure, accessible via the Style tab.
• Markers: Visual icons on the zero line identifying specific VPA patterns like MegaBars, Compressions, and Ease of Move.

Settings

Rate of Flow (RoF)

• Length: The lookback period for the main RROF calculation.
• MA Type: Select the moving average type (WMA, EMA, SMA, HMA, RMA) used for smoothing.
• Smooth: Smoothing factor applied to the RROF line.
• Signal Length: The period for the secondary signal line.
• Signal Type: The moving average type for the signal line.

Lookback Parameters

• Length: The period used to determine the "average" volume and price range for normalization.
• Averaging: Choose between a simple average or the same MA type used for the RROF.

Bias / Sentiment

• Bias Plot: Toggles the background area plot for long-term sentiment.
• Length/MA Type: Defines the period and calculation method for the Bias plot.

EVEREX Bands

• Show EVEREX Bands: Toggles the stacked volume and price bands.
• Band Scale: Adjusts the vertical scale (100, 200, or 400) to zoom into the visual bands.
• Band Option: Determines if bands are "Joint" (stacked) or "Separate."

FAQ

How do I interpret a Compression bar in EVEREX? A Compression bar occurs when there is high relative volume (Effort) but very little price movement (Result). This often indicates that the current trend is meeting significant absorption and may be nearing a reversal.

What is the difference between RROF and standard RSI? While RSI only considers price changes, RROF weights those changes based on normalized relative volume, providing a clearer picture of the "flow" and conviction behind price moves.

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