Classifying Volume Climax, Churn, and Low-Volume Bars

Summary

The document describes a Better Volume indicator that classifies bars using volume, price range, candle direction, and estimated volume at the bid or ask. It colors a volume histogram for several conditions: high-volume wide-range up or down bars, high-volume narrow-range churn, low-volume bars, and overlap between climax and churn signals. The code also includes additional stop-volume and reversal-style signals, a selectable lookback, an option to evaluate two-bar patterns, and an average-volume line. A separate display option can apply colors to price bars.

The document gives indicator code and qualitative interpretations of signal categories, such as possible turning points or trend continuation. It provides no empirical test, performance results, or evidence that the categories reliably identify professional buying or selling. The calculations infer pressure from bar data and should be treated as charting heuristics; thresholds and lookback choices may affect signals, and the source itself offers no warranty.

Key ideas

• The indicator classifies volume bars using volume, range, and candle direction.
• Climax and churn categories distinguish wide-range activity from high-volume bars with little price movement.
• Low-volume bars and overlapping conditions receive separate signal categories.
• The code offers lookback and two-bar settings, plus optional trend-line and price-bar displays.
• The document supplies interpretations but no validation of predictive value or trading performance.

Tags

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