Cumulative Volume Histogram Reset at ZigZag Peaks and Troughs

Summary

This indicator tracks volume accumulated between price turning points identified by a ZigZag applied to closing prices. When it detects a peak or trough, it starts a new accumulation segment, records the segment’s direction, and draws a histogram whose height represents cumulative volume and whose color distinguishes rising from falling phases. The example sets a 4% ZigZag variation and limits the display to 200 bars.

The document explains the indicator’s logic and chart rendering, but gives no empirical tests or evidence that volume patterns predict future prices. ZigZag turning points can be revised as prices evolve, so the apparent historical segments may change; the document does not discuss this limitation or define how traders should use the display. It is a visualization aid, not a tested trading strategy.

Key ideas

• The indicator applies a ZigZag to closing prices to identify candidate peaks and troughs.
• Cumulative volume is reset to the current bar’s volume at each detected turning point.
• Histogram bar color marks the direction assigned to the current ZigZag phase.
• The example draws up to 200 bars and uses a 4% ZigZag variation.
• The document provides no performance evidence or trading rules.

Tags

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