Volume Flow Signals from Bullish and Bearish Volume Averages

Summary

This strategy separates each bar’s volume into bullish volume when the close exceeds the open and bearish volume when it closes below the open. It smooths both series with a selectable simple, exponential, or double exponential average. A long or short bias follows whichever smoothed volume series is larger, while an exponential rate-of-change filter requires price movement to exceed a configurable threshold. The script changes sides when the active bias switches and submits entries during the chosen backtest date window.

Risk controls use a percentage stop and a take-profit limit based on the average position price. The source also exposes moving average, rate-of-change, and date settings, but it provides no performance results or asset-specific evaluation. The page describes the display as green for long, red for short, and white when the movement filter is inactive. A commenter notes that the EMA-based calculations can lag; volume classified only by candle direction is a rough buying-versus-selling proxy, not direct order-flow measurement.

Key ideas

• Bullish and bearish volume are assigned from whether each candle closes above or below its open.
• The strategy compares smoothed bullish and bearish volume to set a directional bias.
• A rate-of-change filter suppresses signals when price movement is too small.
• Entries are paired with percentage-based stop-loss and take-profit levels.
• The volume proxy and lagging averages may limit signal precision and responsiveness.

Tags

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