A Volume, Volatility, and Momentum Indicator for Trend Strength
Summary
The article proposes a trend-strength indicator that combines recent volatility, volume relative to its moving average, and the absolute size of recent momentum. It also applies session-dependent activity multipliers and describes normalizing inputs with volatility-adjusted ranges inspired by Gann’s scale-invariance ideas. The resulting measures are presented alongside a conventional candlestick chart, with trend force and direction shown in separate panels and empirical reference levels used to interpret strength.
The author says a 20-bar volume average offered a preferred balance of sensitivity and stability, and that the displayed force thresholds were selected empirically. The material describes indicator construction and visualization, but the supplied text offers no quantified out-of-sample evaluation, benchmark comparison, or detailed evidence for the claimed predictive patterns. Session multipliers, normalization, and thresholds may be market- and timeframe-dependent, so the approach requires independent testing before use as a trading signal.
Key ideas
- Trend force is formed from volatility, volume relative to its moving average, and absolute momentum.
- Session multipliers adjust volume interpretation across Asian, European, and American trading hours.
- Volatility-adjusted normalization is intended to make the indicator respond to changing market scale.
- The visualization separates price, trend force, and trend direction into aligned chart panels.
- The proposed thresholds and predictive claims are described as empirical but are not supported here by a quantified validation study.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.