Cumulated Volume Velocity: A Range-Weighted Volume Oscillator
Summary
The indicator accumulates price range weighted by current volume, using the prior candle's high and low to determine direction. When both the current high and low are below the previous candle's levels, it subtracts the current candle's range times volume; when both are above, it adds that amount. If neither condition holds, the oscillator remains unchanged. An exponential moving average of the cumulative series serves as a signal line.
The author proposes that large volume can make emerging trends or reversals more visible, while the signal line may help assess continuation. The description gives the calculation logic but no backtest, empirical examples, parameter guidance, or rules for acting on crossovers or new highs and lows. It also notes that the indicator can stay flat when price fails to extend both ends of its range. Its usefulness as a stock screen is suggested as a possibility for further exploration, not demonstrated.
Key ideas
- The oscillator adds or subtracts candle range multiplied by volume when both price extremes move in the same direction versus the prior candle.
- It stays flat when neither the bullish nor bearish range condition is met.
- An exponential moving average of the cumulative series is included as a signal line.
- The post proposes possible trend and reversal detection but provides no empirical validation or trading rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.