Volume Moving Average - evo

The Volume Moving Average - evo indicator provides a specialized volume analysis tool that separates bullish and bearish volume into distinct moving averages to help traders identify the dominant market direction and trend momentum.

Usage

The Usage section describes how the script can be used to interpret volume dynamics. This tool is primarily used to visualize whether buying or selling pressure is controlling the current trend.

• Trend Identification: Users can observe the crossovers between the positive and negative volume moving averages. When the green (positive) average is above the red (negative) average, it suggests a bullish volume bias.
• Momentum Analysis: Comparing the volume bars against the moving averages helps identify spikes in activity that may precede price breakouts or trend exhaustion.
• Heikin Ashi Smoothing: Enabling the Heikin Ashi setting allows for a smoother calculation of volume averages, which is particularly useful for filtering out noise during trending periods.

Details

The script operates by categorizing volume based on the relationship between the closing and opening prices. If the close is higher than the open, the volume is attributed to the "up" calculation; if lower, it is attributed to the "down" calculation.

A unique feature of this implementation is that the moving averages utilize the last known value for their respective calculations. This means the bearish average will carry forward its previous value even during a bullish candle, ensuring the lines remain continuous on the chart. Users can choose between Simple Moving Averages (SMA), Exponential Moving Averaged (EMA), or Hull Moving Averages (HMA) to suit their preference for responsiveness versus smoothness.

Settings

• Heikin Ashi Settings: When enabled, uses Heikin Ashi price data to determine candle polarity and smooth the resulting volume colors and averages.
• Average Type: Selects the calculation method for the moving averages (SMA, EMA, HMA, or None).
• Average Length: Sets the lookback period for the volume moving average calculations.
• Separate Average: Toggles between showing two distinct lines (bullish vs. bearish volume) or a single average of the total volume.
• Show Volume: Toggles the visibility of the underlying volume histograms.

FAQ

How do I interpret a crossover between the two moving averages? A crossover where the positive volume average moves above the negative volume average generally indicates that buying pressure is becoming the dominant force in the market.

Can I use this for volume breakout alerts? Yes, the script includes built-in alert logic for volume crossing its average and for crossovers between the positive and negative volume averages.

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