Volume Spread Analysis with Percentile Ranks and Wyckoff Signals

Summary

The document explains a Volume Spread Analysis indicator that compares trading effort, represented by volume, with price result, represented by bar range. It ranks both measures against a rolling window of 100 bars, converts the ranks into deciles, and treats a large gap as a sign of possible absorption or an unusually easy price move. Moving averages of the two scores provide a broader context, while a separate strength-versus-weakness score colors candles.

It describes five Wyckoff-style patterns: No Demand, No Supply, Upthrust, Shakeout, and Stopping Volume. Most signals require confirmation from the following bar, and the article presents them as descriptive context for decisions around support, resistance, breakouts, and potential exhaustion. It emphasizes that candle colors are not entries and that percentile ranks are relative to recent history. The material is an indicator explanation and code port, not a tested trading system: it provides no performance results, and the proposed internal trend proxy differs from the original implementation.

Key ideas

• Volume and bar range are ranked against a recent rolling window and mapped to deciles for comparison.
• High effort with limited price range can indicate absorption, while wide movement on low effort suggests little resistance.
• The indicator labels five patterns and confirms most of them using the next bar.
• Candle color and pattern marks are contextual signals, especially near market structure levels.
• The document provides no backtest evidence, and its signals should not be read as predictions.

Tags

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