Wako Volume Ratio Oscillator for Accumulation and Distribution

Summary

The Wako Volume Ratio is a volume-only oscillator that compares up-bar volume with down-bar volume over a chosen lookback period. Volume on bars where the close exceeds the open is classified as distributive, while volume on bars where the close is below the open is accumulative. The difference between these totals is divided by total volume and expressed as a percentage. Positive readings indicate relative dominance of up-bar volume, and negative readings indicate relative dominance of down-bar volume.

The document suggests using the zero line to distinguish these phases, with attention bands varying by asset and extreme readings potentially signaling a return toward equilibrium. It provides no systematic backtest, asset-specific calibration, or evidence that extreme values reliably reverse. The measure also depends on bar direction as a proxy for accumulation or distribution, so it should be tested in the intended market and timeframe before being treated as a standalone signal.

Key ideas

• The oscillator compares up-bar and down-bar volume over a selected period.
• It normalizes the difference between those volume totals by total volume and scales it as a percentage.
• Positive and negative readings represent relative dominance of up-bar and down-bar volume, respectively.
• Thresholds may vary across assets, and extreme readings are described as possible mean-reversion warnings.
• The document supplies no backtest evidence for the proposed interpretations.

Tags

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