Smoothing a Line Chart with Tick-Volume Weighting

Summary

The document describes an indicator that combines a smoothed line chart with tick volume to represent market direction. Its stated purpose is to reduce the visual impact of short, noisy price movements compared with a basic line chart. The smoothing amount is adjustable, and graphical markers are used to make direction easier to see. The author also cautions against placing trades when the resulting line is horizontal, implying that a flat reading offers little directional guidance.

This is a qualitative description rather than a full indicator specification: it gives no formula for the volume weighting, smoothing method, or signal rules, and it provides no chart, backtest, or performance evidence. Tick volume may reflect activity rather than actual traded volume, depending on the market and data feed. The indicator is therefore best understood as a visualization or possible trend filter, not as a validated standalone trading system. A researcher would need to define its calculation and test it on the intended instrument and data source before relying on it.

Key ideas

• The indicator uses tick volume in a smoothed line intended to show market direction.
• Adjustable smoothing is meant to filter short, noisy price movements.
• The author advises avoiding trades when the indicator becomes horizontal.
• The document supplies no calculation details or performance evidence, so the idea requires independent specification and testing.

Tags

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