Negative Volume Index Signals from Declining-Volume Sessions

Summary

This reversal strategy builds a cumulative Negative Volume Index (NVI) that changes only when current volume is below the previous session’s volume. On those lower-volume sessions, it adds the price rate of change; otherwise, the index remains unchanged. The system compares NVI with its moving average, taking a long position when NVI is above the average and a short position when it is below. The listed average length is 255, and an optional setting reverses the signals.

The document explains the indicator and its intended signal logic, but supplies no performance statistics. Its published backtest settings cover BTC-USDT futures over a short stated period, which provides limited evidence for assessing robustness. The source also frames the method for learning or paper trading. Signal errors, unsuitable parameters, and unreliable volume data are cited as risks; larger-timeframe filters and stop-loss rules are suggested for further investigation.

Key ideas

• NVI accumulates price rate of change only on sessions when volume declines from the prior session.
• The strategy goes long above the NVI moving average and short below it.
• The listed moving-average length is 255, and the settings allow signal reversal.
• The document gives no performance results, and its stated backtest period is brief.
• Volume quality, parameter choices, and false signals may affect the strategy.

Tags

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