Smart Money Volume Activity

The Smart Money Volume Activity tool analyzes intraday volume distributions to distinguish between institutional accumulation/distribution and retail participation. By utilizing Z-score normalization on lower-timeframe data, it identifies statistically significant volume spikes and classifies them based on candle-body context, projecting these events as persistent reactive levels on the chart.

Usage

The script is designed to highlight areas of high liquidity and institutional interest. Users should begin by setting the Lower Timeframe Value to a timeframe smaller than the current chart (e.g., 5m for a 1h chart) to enable granular volume analysis.

• Smart Money Classification: volume events occurring within the candle body are classified as "Smart Money," suggesting hidden institutional positioning.
• Retail Classification: volume events occurring at the candle extremes (wicks/closes) are classified as "Retail," often indicating emotional entries or exits.
• Reactive Levels: Significant events are projected as horizontal lines. These act as support and resistance levels until price interacts with them again.
• P/L Table: The on-chart dashboard provides a live comparison of cumulative volume performance. Green cells represent profitable volume flows, while red cells indicate losing positions for that specific participant class.

Details

The indicator calculates volume intensity using a Z-score baseline over a user-defined period. This statistical approach filters out noise, focusing only on "extreme" volume events that deviate significantly from the average.

• Event Classification: The logic analyzes the relationship between the lower-timeframe close and the current chart's price action. If the volume spike occurs strictly inside the body, it is attributed to Smart Money; if it occurs at the bar's close or extremes, it is attributed to Retail.
• Dynamic Updating: Levels remain active on the chart until they are "tested" by the price action (crossing the body of a subsequent candle), at which point they are removed to maintain chart clarity.

Settings

• Period (Chart Bars): The number of bars used to calculate the volume moving average and standard deviation for Z-score analysis.
• Threshold (|Z|): The sensitivity of the detector; higher values only show the most extreme volume events.
• Lower Timeframe Value: The data source used for the granular volume breakdown.
• Show: Filters the display to show only Smart Money, Retail, or both.
• Show Levels: Toggles the horizontal reaction lines.
• Show Bubbles: Toggles visual markers at the point of the volume spike.
• Show P/L Table: Toggles the performance summary table.

FAQ

How do I interpret the bubble sizes?

The size and opacity of the bubbles are proportional to the Z-score of the volume event; larger, brighter bubbles indicate more significant institutional or retail activity.

What does it mean when a level disappears?

Levels are removed dynamically when price action "crosses" the level, signifying that the liquidity at that price point has been mitigated or reacted to.

How can I access Smart Money Volume Activity?

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