Classifying Volume by Price Relative to a Moving Average

Summary

This indicator divides traded volume into buy and sell categories according to whether price is above or below a selected moving average. Price above the average is treated as a buy state, and price below it as a sell state. Users can choose tick volume or real volume, and select a simple, exponential, smoothed, or linear weighted average. The two volume series are then smoothed with a modified EMA-like process. Alerts and multi-timeframe display are included.

The description explains the indicator’s classification rules and configuration options, but supplies no performance tests, trading rules, or evidence that the labels identify actual buyer-initiated or seller-initiated trades. The categories are inferred from price relative to an average, so they should be understood as a trend-state visualization rather than direct order-flow measurements. The text does not specify the smoothing formula or provide guidance on parameter selection.

Key ideas

• Volume is assigned to a buy or sell category based on price relative to a chosen average.
• The indicator supports tick volume or real volume as its input.
• Four average types are available for defining the price state.
• The displayed category volumes are smoothed, but the smoothing formula is not specified.
• The description offers no evidence that the categories measure actual trade-side flow.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.