Volume Pressure as Volume Divided by Price Change
Summary
The document proposes a simple volume-based measure called volume pressure, defined as trading volume divided by price change. It presents the measure as an indicator in the same broad family as other volume tools, without specifying a formula for the price-change interval, whether the change is signed or absolute, or how to handle zero price movement.
The note says users may choose tick volume or actual traded volume where available. It does not give trading rules, thresholds, worked examples, empirical tests, or evidence that the measure predicts returns. Because dividing by a small or zero price change can produce extreme or undefined values, practical use would require explicit conventions and validation. The source is described only as another forum, so the note offers little context for interpreting or reproducing the idea.
Key ideas
- The proposed volume pressure measure divides volume by price change.
- The note allows either tick volume or actual traded volume when available.
- It does not specify the price-change horizon or whether direction affects the calculation.
- Zero or very small price changes require handling that the document does not describe.
- No signal thresholds, tests, or performance evidence are provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.