Finite Volume Element: A Volatility-Filtered Money Flow Indicator
Summary
Finite Volume Element (FVE) is presented as a money flow indicator that combines intraday and day-to-day price movement. It assigns positive or negative volume when a price-based measure exceeds a volatility threshold, and ignores volume when the movement is too small. The resulting signed volume is summed over a period and normalized by average volume; the suggested period is 22.
The document describes three ways to interpret FVE: divergence from price, the indicator’s slope, and crossings of its zero line. Positive values are associated with accumulation and negative values with distribution; a sharp rise through zero after divergence is offered as a bullish setup, while a downward cross is framed as bearish. These are indicator interpretations, not tested performance results. No markets, sample, or backtest are supplied, and the exposition gives no guidance on confirmation, risk controls, or threshold calibration, so the signals should not be treated as evidence of profitability.
Key ideas
- FVE combines intraday and interday price information in a volume-based measure.
- A volatility threshold filters out small price moves before volume is signed.
- Divergence, slope, and zero-line crossings are the indicator’s described signals.
- The document gives trading interpretations but no empirical performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.