Volume Divergence Markers for Potential Reversal and Correction Points

Summary

Volume Divergence Markers places chart markers when bar size and trading volume move in opposite directions for configured consecutive bars. The author says markers often appear near peaks before reversals or during corrections within a trend, so they may help identify possible entry or exit points. Inputs control whether the current bar counts, whether the indicator detects convergence or divergence, and how many bars each measure must rise or fall.

The document describes the indicator’s intended use but provides no measured performance evidence; its profit illustration is only described, not substantiated with results. The author notes ongoing work to filter false signals and says the indicator does not indicate trade direction. It is said to work best in flat price action, and higher input values produce fewer signals. The recommendation is to use it alongside other indicators rather than as a standalone trading system; the suggested range of one to three bars is an unvalidated parameter recommendation.

Key ideas

• The indicator marks periods when bar size and volume move in opposite directions over configured runs of bars.
• Markers may occur near potential reversals or within trend corrections, but they do not identify price direction.
• Inputs control bar counting, convergence versus divergence, and the required run lengths.
• The author reports that higher settings yield fewer signals and recommends use with other indicators, especially in flat markets.
• The document supplies no quantified validation and acknowledges that false-signal filtering remains under development.

Tags

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