Comparing Price Momentum with Volume-Based Momentum
Summary
This indicator pairs a conventional price RSI with an RSI calculated from a selectable volume-derived series: accumulation and distribution, force index, money flow, on-balance volume, or price-volume trend. Both readings can be smoothed, allowing traders to compare price momentum with changes in buying and selling activity. Reference bands mark upper and lower zones, while the midpoint provides a balance level. These regions offer context for momentum analysis; they are not presented as stand-alone entry or exit rules.
Optional displays add relative volume against its recent average, a moving-average or oscillator companion, and estimates of buying and selling volume based on where the close falls within the bar. Price bars can also be colored according to volume intensity and direction. The material describes the indicator’s components and rationale, but supplies no performance study or evidence of predictive accuracy. Volume measures depend on the available data, and readings may behave differently across instruments and market conditions. The author cautions that the tool is informational and should be used within a broader trading approach.
Key ideas
- The indicator applies RSI calculations to several common volume-derived measures.
- A smoothed volume RSI can be compared with a separate RSI calculated from price.
- Marked upper and lower regions provide momentum context rather than guaranteed reversal signals.
- Optional plots show relative volume, a companion volume measure, and estimated buying or selling activity.
- Bar colors combine volume intensity with whether the bar rose or fell.
- The description provides no backtest or proof that the indicator generates profitable signals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.