Better Volume Bar Colors for Climax, Churn, and Low Volume
Summary
The document describes a price chart overlay that classifies bars using volume, bar range, price direction, and comparisons with recent bars. It marks high-volume, wide-range up and down bars as volume climaxes, high-volume narrow-range bars as churn, and unusually low-volume bars separately. A combined climax-and-churn condition receives its own color. Additional rules flag possible stopping-volume bars and short-term reversals after certain climax patterns.
The method is presented as a way to interpret buying and selling pressure and spot potential turning points, pullbacks, or trend changes. The included indicator code uses a configurable lookback and estimates bid-side and ask-side volume from bar data. The document offers no performance tests or evidence that the colored signals reliably identify professional trading or profitable entries. Its classifications are heuristic and depend on the available bar data and implementation; they should be treated as analytical cues rather than confirmed order flow or standalone trading signals.
Key ideas
- The indicator classifies bars by volume, range, and whether price rose or fell.
- High-volume wide-range bars are labeled as up or down climaxes, while high-volume narrow-range bars indicate churn.
- Low-volume bars and overlaps between climax and churn conditions receive separate markings.
- Extra rules flag possible stopping-volume activity and short-term reversals after selected patterns.
- The code estimates bid-side and ask-side activity from bar data, so its signals are heuristic rather than direct order-flow measurements.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.