Fibonacci Blended Volume Flow (VFI)

The Fibonacci Blended Volume Flow (VFI) indicator is an advanced volume-based tool that blends up to 21 Fibonacci-sequenced Volume Flow Index (VFI) pairings to create a smoothed, adaptive composite signal. It aims to reduce market noise and provide a clearer view of trend strength and structure across various timeframes by utilizing volatility-aware logic.

Usage

The Usage section describes how the script can be used to identify high-quality reversals and confirm directional bias.

• Trend Confirmation: Use the color-coded histogram and signal crossovers to determine bullish or bearish dominance. The gradient coloring reflects momentum shifts in real-time.
• Crossover Systems:
  • Fast (5/13 VFI): Best for early reversal detection and aggressive entries.
  • Medium (8/21 VFI): Optimized for swing trading and mid-term momentum.
  • Slow (55/144 VFI): Used for long-term trend confirmation and cycle analysis.
• Structure Labels: The indicator automatically labels pivots (HH, HL, LH, LL) on the oscillator. These can be used to identify trend exhaustion or potential divergence zones when compared with price action.
• Volume-Weighted Baselines: Traders can use the rolling VWA of the VFI to find mean reversion setups or confirm breakouts relative to volume-weighted averages.

Details

The script evolves the foundational VFI logic by using log returns of HLC3 price data and filtering insignificant price moves through volatility-weighted thresholds. Unlike static volume indicators, it normalizes volume via adaptive capping (typically 2.5x the average) to prevent single-bar anomalies from distorting the overall flow. The "Fibonacci Fusion" system averages multiple VFI lengths (e.g., 13, 34, 55, up to 610) to ensure the signal remains responsive to both short-term volatility and long-term structure.

Settings

VFI Engine

• Use Dynamic Lookback: Automatically adjusts the high/low tracking based on the chart's timeframe.
• VFI Filter Profile: Allows switching between "Auto TF" and "Manual" settings for price-change filters and volume caps.
• VFI Smoothing: Controls the final smoothing applied to the composite signal.

VFI Blend & Histogram

• VFI Blend Profile: Selection of pre-set Fibonacci pairings (Fast, Balanced, Slow) to change the responsiveness of the composite signal.
• Histogram Display Mode: Choose between Regular Columns, Synthetic Candles, or both to visualize volume momentum.
• Signal Line Mode: Toggles the visibility of the EMA signal line and its crossover logic.

Guides & Overlays

• Guide Lines: Displays dynamic zero and ±50% bands based on historical histogram extremes.
• Rolling VFI VWA: A volume-weighted average overlay that acts as a baseline for the VFI signal.
• Pivot Structure Labels: Controls the display of structural tags (HH, LL, etc.) and their associated price/oscillator data.

FAQ

• How do I interpret the histogram colors? The histogram uses a gradient to show momentum. Stronger colors indicate high-velocity volume flow, while lighter shades or color shifts suggest cooling momentum or potential reversals.
• What are the pivot labels showing? Labels like HH (Higher High) or LL (Lower Low) appear on the oscillator to show market structure. These help identify if the volume flow is making new extremes alongside price.
• How can I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.