Finite Volume Elements for Volume-Weighted Trend Analysis and Filtering
Summary
The article explains the Finite Volume Elements (FVE) indicator, which assigns volume a positive, negative, or neutral direction using a price movement measure and a cutoff threshold. It sums signed volume over a lookback window and divides by total volume to express the result as a percentage. The MetaTrader implementation can use real or tick volume, and the article also describes an FVE variant combined with a linear regression slope.
The author discusses using the indicators to identify accumulation or distribution and as a filter in an expert advisor, then reports simple testing. The conclusion notes a slight drawdown reduction alongside lower profitability for the tested enhanced indicator setup. This is limited evidence from a particular test configuration, not proof of general effectiveness; the article itself leaves filter tuning and broader validation open.
Key ideas
- FVE combines a price movement direction with volume to estimate buying or selling pressure over a selected window.
- A cutoff threshold classifies each bar’s movement as positive, negative, or neutral before volume is aggregated.
- The indicator can be calculated with real or tick volume and displayed as a percentage of total volume.
- A linear regression slope is added in the article’s enhanced FVE variant.
- The reported test suggests a drawdown reduction but also a profitability decline, and does not establish general performance.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.