Volume Signature per Pattern
By LuxAlgoJun 14, 2026
Volume Signature per Pattern is an indicator on Vela, our next-generation charting platform, written in Pine Script®.
Volume Signature per Pattern automates the classical audit behind the volume signature per pattern idea. When a consolidation is flagged (a 14-bar span compressed to within 2 times the 200-bar ATR), a zone box locks onto the window's extremes and the audit begins: the least-squares drift of volume across the formation, and the expansion demanded at the break. A break on contracting formation volume and at least 1.5x average volume is tagged Confirmed; anything else is Suspect, and the resolved zone fades to match.
How to Trade the Volume Signature per Pattern?
- Confirmed tag: both legs of the textbook signature passed. Quiet while coiling, expansion at the boundary.
- Suspect tag: the signature failed on one leg or both, the breaks charting texts warn about; consider waiting for a retest.
- Formation Volume read: the running drift inside the zone. Negative and falling is the textbook shape.
- Dashboard: the live audit, the volume a breakout needs right now, and the last verdict.
Five alerts cover new consolidations and both directions of confirmed and suspect breakouts; hovering a tag shows the full audit.
Volume Signature per Pattern Settings
- Detection Window (default 14): bars whose high-low span must compress to flag a consolidation.
- Volatility Baseline (default 200): the long-run ATR yardstick of the compression test.
- Compression Threshold (default 2): span at or below this ATR multiple flags the coil.
- Breakout Basis (default Close): resolve on a close beyond the zone, or any wick with High / Low.
- Average Volume Length (default 20): the volume SMA snapshotted before the pattern and reread at the break.
- Breakout Expansion Multiple (default 1.5): what the break bar must reach versus recent average.
- Dashboard and style toggles cover zones, Show Last (default 10), the formation read, and the quality tags.
Frequently Asked Questions
Free to use
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