Time Segmented Volume with divergence and Kumo cloud background

The Time Segmented Volume with divergence and Kumo cloud background indicator is a comprehensive volume-based oscillator designed to identify trend momentum, potential reversals through divergences, and trend sentiment via a Kumo cloud integration. It provides traders with a multi-layered view of market activity by combining classic volume segmentation with advanced visual filters and signal detection.

Usage

The Usage section focuses on interpreting the various visual components provided by the tool:

• TSV Histograms: The primary oscillator bars indicate volume flow. Positive (blue) bars suggest bullish accumulation, while negative bars suggest bearish distribution.
• Zero-Line Crossovers: Background highlights and diamond shapes at the bottom of the pane signal when the TSV oscillator crosses the zero threshold, indicating a shift in momentum.
• Divergence Signals: The script automatically detects and labels four types of divergences (Regular Bullish/Bearish and Hidden Bullish/Bearish) using "B" and "H" labels. These are often used to anticipate potential trend exhaustion or continuation.
• Kumo Cloud Background: The background color is determined by a modified Ichimoku Kumo cloud calculation (Lead Line 1 vs. Lead Line 2). A green background suggests a bullish environment, while a red background suggests a bearish one.
• Price Action Symbols: Square and cross symbols at the bottom help identify specific relationships between the TSV value and its moving average, highlighting momentum strength or potential failures.

Details

The script calculates Time Segmented Volume (TSV) by comparing the current price to the previous price and multiplying it by volume to determine the directional flow of capital. This implementation includes:

• Smoothing: A customizable moving average is applied to the TSV to filter out noise.
• Divergence Logic: Pivot points are used to compare price peaks/valleys against oscillator peaks/valleys.
• Ichimoku Integration: It uses Donchian channels to calculate Conversion and Base lines, forming the "Kumo" background logic to provide a secondary trend confirmation layer.

Settings

TSV & Smoothing

• TSV Length: Determines the period used for the initial TSV calculation.
• Moving Average: Allows selection between different MA types (RMA, SMA, EMA, WMA, VWMA) for smoothing.
• MA Length: The lookback period for the smoothing moving average.
• Source: The price source used for the calculations (default is Close).

Divergence Detection

• Pivot Lookback Right/Left: Sets the number of bars required to confirm a pivot high or low.
• Max/Min of Lookback Range: Defines the bar window in which the script searches for divergences.
• Plotting Toggles: Options to enable or disable the visualization of Bullish, Hidden Bullish, Bearish, and Hidden Bearish signals.

Kumo Cloud

• Conversion Line Length: Period for the short-term Ichimoku line.
• Base Line Length: Period for the medium-term Ichimoku line.
• Lagging Span 2 Length: Period used for the longer-term Lead Line calculation.
• Displacement: Shifts the Kumo cloud forward or backward.

FAQ

How do I interpret the "H" and "B" labels?

"B" stands for Regular Divergence, which typically suggests a trend reversal. "H" stands for Hidden Divergence, which usually indicates trend continuation.

What do the square and cross icons at the bottom mean?

Squares indicate momentum is aligned with the trend (Long or Short), while crosses indicate "Failure" points where the oscillator and price action may be losing synchronization.

How can I access Time Segmented Volume with divergence and Kumo cloud background?

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