Rotation Factor: Buy/Sell Pressure for Market/Volume Profile

The Rotation Factor: Buy/Sell Pressure indicator calculates the cumulative buying and selling pressure within a specific interval to provide deeper insight into market sentiment and trend strength.

Usage

The Usage section describes how the script can be used to identify trend direction and momentum shifts. This tool is primarily designed for use on the 30-minute timeframe with a daily reset interval, though it can be adapted for longer-term analysis.

• Intraday Analysis: By setting the reset interval to "1D," traders can monitor the net rotation of price action throughout a single trading session. A positive value indicates dominant buying pressure, while a negative value indicates selling pressure.
• Trend Confirmation: The indicator can be used alongside Market Profile or Volume Profile to confirm if price movements are supported by structural buying or selling strength.
• Zero-Line Crosses: Crosses above or below the zero line can signal a shift in market control between buyers and sellers.

Details

The Rotation Factor is a point-based system that evaluates the relationship between the current bar's high and low relative to the previous bar's high and low. The calculation logic is as follows:

• Higher High and Higher Low: +2 points
• Lower High and Lower Low: -2 points
• Higher High and Lower Low (Outside Bar): 0 points
• Lower High and Higher Low (Inside Bar): 0 points
• Equal High and Higher Low: +1 point
• Higher High and Equal Low: +1 point
• Lower High and Equal Low: -1 point
• Equal High and Lower Low: -1 point

The points are accumulated throughout the chosen interval and reset at the start of each new period (e.g., every new day or month). This approach filters out noise by focusing strictly on price discovery and directional conviction.

Settings

Indicator Settings

• Reset Interval: Determines the timeframe resolution at which the rotation factor count resets (e.g., 1D for daily resets, 1M for monthly resets).
• Merge Gaps: Controls how requested data is merged. When enabled, it allows for gaps (na values); when disabled, it fills gaps with the previous value.
• Merge Lookahead: Determines if the requested data includes future bars in history. This should typically remain off for standard trading to avoid repainting.

Style Settings

• Positive Color: Sets the color of the indicator when the rotation factor is above zero.
• Negative Color: Sets the color of the indicator when the rotation factor is below zero.
• Width: Adjusts the thickness of the plotted visual.
• Style: Allows users to choose between various visual representations, including Columns, Histogram, Line, Area, and Stepline.

FAQ

How do I interpret a zero value on an outside or inside bar? An outside bar (higher high and lower low) or an inside bar (lower high and higher low) represents a lack of directional conviction or a balance in pressure, resulting in 0 points added to the cumulative total.

Can I use this on a Daily timeframe? Yes, while commonly used on intraday charts, some traders apply it to Daily charts with a 1-month (1M) reset interval to track long-term institutional pressure.

How do I access the Rotation Factor: Buy/Sell Pressure indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.