RSI-cumulative net volume as MACD

The RSI-cumulative net volume as MACD indicator combines volume-weighted relative strength with trend-following momentum to provide a unique perspective on market direction and volume accumulation. By processing cumulative net volume through a MACD calculation, it helps traders identify shifts in buying and selling pressure that may not be immediately visible on price-only charts.

Usage

The indicator can be used similarly to a traditional MACD but with an emphasis on volume dynamics. Traders can look for the following signals:

• Histogram/MACD Crossovers: When the MACD line (solid line) crosses above the Signal line, it indicates increasing bullish volume momentum. Conversely, a cross below suggests bearish momentum.
• Histogram Color Changes: The histogram transitions between green and red based on the slope of the MACD, highlighting immediate changes in volume-based strength.
• Zero Line Crossings: Movements above or below the zero line indicate whether the fast moving average of the normalized cumulative net volume is above or below the slow moving average.

Details

The script functions by first calculating the Net Volume (NV) using an RSI of the cumulative product of price change and volume. This value is then accumulated into a Cumulative Net Volume (CNV). To make this data readable for a MACD structure, the CNV is normalized by subtracting its 15-period simple moving average. Finally, the fast and slow exponential moving averages (EMAs) of this normalized value are subtracted to create the MACD line, while a signal line is derived from a simple moving average of the MACD result.

Settings

• Length: The lookback period for the RSI calculation of the net volume.
• Fast Length: The period for the shorter EMA used in the MACD calculation.
• Slow Length: The period for the longer EMA used in the MACD calculation.
• Signal Length: The smoothing period for the signal line.

FAQ

How can I access the RSI-cumulative net volume as MACD?

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

Can this indicator be used on any timeframe?

Yes, the indicator is designed to work across various timeframes; however, users should adjust the Length and MACD settings to suit the volatility and volume characteristics of their specific chart.

What is the difference between this and regular MACD?

Standard MACD uses price data only. This version uses "Cumulative Net Volume" (price change multiplied by volume) processed through an RSI, providing a momentum oscillator based on volume flow rather than just price action.