(OFPI) Order Flow Polarity Index - Momentum Gauge (DAFE)

The (OFPI) Order Flow Polarity Index - Momentum Gauge tool is a momentum tracking indicator that quantifies market aggression by analyzing the relationship between candle body position and volume. It provides traders with a visual representation of the current balance of power between buyers and sellers through a centered gauge and a real-time dashboard.

Usage

The indicator can be used to identify who is currently in control of price action and to spot potential reversals.

• Bullish Momentum: Represented by lime-colored segments filling to the right of the gauge. This suggests buyers are dominant, often used to confirm breakout opportunities or trend continuations.
• Bearish Momentum: Represented by red-colored segments filling to the left. This indicates seller control, useful for scouting breakdowns or short entries.
• Neutral Momentum: Indicated by orange segments near the center, suggesting a lack of decisive market direction.
• Momentum Shift: Detected when the index reaches a local peak or trough, signaling a potential exhaustion of the current move or a forthcoming reversal.

Details

The script calculates the Order Flow Pressure Index (OFPI) by splitting total volume into buy and sell pressure based on where the close price sits relative to the high-low range of the candle. This value is then smoothed using a Tilson T3 moving average, which offers a superior balance between lag reduction and noise filtering compared to standard moving averages. The result is normalized and mapped to a 20-segment gauge displayed in a dashboard on the chart.

Settings

• Lookback Length: Determines the number of bars used to calculate the cumulative pressure and total volume.
• T3 Smoothing Length: Sets the period for the T3 moving average smoothing applied to the raw OFPI value.
• T3 Volume Factor: Controls the sensitivity of the T3 calculation; higher values result in more responsive signals, while lower values provide smoother trends.

FAQ

How do I interpret the gauge bar?

The gauge bar is centered at zero. Filling to the right indicates positive (bullish) momentum, while filling to the left indicates negative (bearish) momentum. Empty segments represent a lack of conviction in that direction.

What is a "Momentum Shift" alert?

A momentum shift occurs when the smoothed OFPI value forms a crest or a trough. This indicates that the current momentum is losing speed and a change in direction may be imminent.

How can I access the (OFPI) Order Flow Polarity Index - Momentum Gauge?

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