A Normalized Volume Oscillator with Relative Volume Color Bands
Summary
The indicator presents volume relative to its average over a selected period, expressing the deviation as a percentage. This makes below-average activity visible as negative readings and above-average activity visible as positive readings. The displayed histogram also assigns colors to ranges of relative volume, distinguishing below-average volume, modest increases, and larger increases.
The stated color thresholds include Fibonacci-style levels and a level at which volume has doubled relative to its average. These bands provide a quick visual way to assess whether current trading activity is unusually quiet or elevated. The description explains how to interpret the indicator but gives no trading rules, performance results, or guidance for choosing the averaging period. It should therefore be treated as a volume visualization tool rather than a standalone entry or exit strategy.
Key ideas
- The oscillator expresses current volume as a percentage deviation from its period average.
- Negative readings indicate volume below the average, while positive readings indicate volume above it.
- Histogram colors distinguish several levels of above-average volume, including thresholds based on Fibonacci proportions.
- The description provides no evidence that these volume bands predict price direction or improve strategy returns.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.