Classifying Volume Patterns with the Better Volume Indicator

Summary

This description presents a chart indicator that classifies volume bars into categories such as buying climax, selling climax, churn, climax churn, weak candle, and ordinary volume. It displays those categories with colors and adds a moving average of volume. Users can adjust the averaging period and comparison lookback, and choose real or tick volume. The indicator is described for use across timeframes, from intraday charts to longer periods.

The suggested interpretation is that climax patterns may point to accumulation, distribution, or possible trend changes, while the histogram and volume average can help confirm entries or exits in volume-based strategies. The document gives no formal classification formulas, tested examples, or evidence of predictive performance. A climax signal can be consistent with either continuation or reversal, so the categories alone do not provide a complete trading rule. Interpretation also depends on the asset’s volume data and the selected settings.

Key ideas

• The indicator assigns volume bars to categories including buying climax, selling climax, churn, and weak volume.
• A moving average smooths volume over a configurable period.
• Users can set a comparison lookback and choose real or tick volume.
• Climax patterns may suggest accumulation, distribution, continuation, or reversal, but the document gives no tested decision rule.
• The indicator is presented as a possible confirmation aid for volume-based entries and exits, without performance evidence.

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