The Active Volume Trend is an indicator for ProRealTime that allows filter with efficiency the market direction according o the exchange volumes on on the market.
You can use it on any type of chart like Kagi, Renko, Heikin Ashi, or simply on a Japanese candlestick chart. This indicator is very useful for building a strategy that weights volumes, thus filtering volatility when the market is too quiet.
When the market is quiet and exchanged volumes is low, the filter will guide you through the market, avoiding false signals generated by volatility without volumes. The indicator will signal market trends only if they are supported by volumes.
In the following example we see how the change in trend is confirmed only after several candles, until the volumes confirm a change of power between the buyers and the sellers. In this precise case the filter parameters are set over a longer period.
The example below shows the application of a minor filter and the consequent greater reactivity of the indicator. Signal latency decreases because the volume level required for triggering the trend indicator is lower.
HOW IT WORKS
Apply the Active Volume Trend indicator to the chart, then by modifying the settings, set the reactivity of the indicator, and the period of calculation of the volume filter to suit the current instrument and timeframe displayed;
VolatilyFactor, allows to increase or decrease the reaction;
PeriodF and PeriodL allow to relate the calculation periods of the component volumes within the indicator, varying the sensitivity to the trading volumes of the underlying, acting as a filter for the indication of the up or down trend change.
With this indicator, it is even possible to create trend following or mean reversion strategies, dynamic stops and filters.
Advantages of using the “Active Volume Trend” indicator
- Easy filtering of the market direction according to exchanged volumes
- Automatically identifies the potential trend reversal and give signals
- Indicates the past performances: the best way to find the good settings!
- Build you own automated trading strategy with just one indicator!
- Compatible with all instruments
- Compatible with all ordinary timeframes and even on tick-charts!
- Compatible with Heikin ashi, Renko, Ticks, Kagi, Three Line Break, and more
- The indicator is completely customizable to suit your own trading style
- The indicator does not repaint! The signal is given in real-time and allows you to operate without any delay
- The indicator can be integrated into any indicator, using ProRealTime’s ProBuilder function
- The indicator can be integrated into any automated trading strategy, using ProRealTime’s ProBackTest and ProOrder function
- Warning: the indicator only works if volume data is available.
This product works in any Futures, Forex or Stock/ETF Markets