Coloring Tick Volume by Its Change and Price Direction
Summary
This indicator classifies tick volume by comparing current readings with readings from a chosen number of periods earlier. It assigns a separate color to five combinations: volume rising with price rising, volume falling with price falling, volume rising while price falls, volume falling while price rises, and no change in either measure. The display is a colored histogram intended to make those relationships visible at a glance.
The sole stated input is the comparison period. The description explains the classification scheme but provides no trading rules, performance evidence, or guidance on interpreting the colored categories as signals. Tick volume is a measure of observed price updates rather than centralized exchange-wide traded volume, so the display alone does not establish buying or selling pressure. Its usefulness depends on the instrument, data feed, and the trader’s broader analysis.
Key ideas
- The indicator compares current tick volume and price with values from a selected earlier period.
- It colors rising volume with rising price differently from falling volume with falling price.
- It separately marks rising volume during a price decline and falling volume during a price rise.
- A fifth category represents no change in either volume or price.
- The document describes a visualization, not a tested trading strategy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.