Time Slice Volume Average Indicator – !RL_TSVA .

This is my Time Slice Volume Average Indicator.  Most people ask we what the heck is that!

Intraday volume does not have an equal distribution.  Volume from 9:30 to 11am is very different than mid-day volume which tends to be low,  and then volume for the close again picks back up.  This parabolic distribution makes normal moving averages useless. 

Here is picture of the standard TradeStation Volume Average indicator:

So how can you tell if volume is outside a range?  The TSVA goes back a user selectable number of days and averages the volume for that particular time-slice.

Here is the same chart with a 5 day TSVA installed instead.

The light blue bars are times when the current  volume is 50% above (or below) the 5 day average volume for that time slice.  The 10:05 bar in this case shows a capitulation low on TF on extremely high volume.  The two follow on burst of high volume bars with the market moving up (10:35 to 10:45 and 11:05 to 11:20 ) are signals that this is going to be a trend up day.

It is possible to layer multiple TSVAs and build a chart that tells you even more information on what is happening with volume.  The following chart has 3 TSVA indicators installed:

Key:

Bars:

Yellow = Total Volume

Cyan = Total Volume Alert (above 50% in this case)

DarkGreen = Up Volume (volume traded on an up tick)

Red = Down Volume  (volume traded on a down tick)

Lines:

Dark Blue = Yesterday’s Volume at the same point in time

Magenta = 5 day average of volume at the same point in time

Brown = 10 day average of volume at the same point in time

This time we have a 15 minute view of the same symbol discussed above.  We have a capitulation low on the 10:15 bar with extremely high volume and if you look closely the up volume for the next three bars is outpacing down volume.  The pullback bar at 11:00am is light volume compared to the averages, another signal that we are going to go back up.  The 11:15am bar confirms.

I hope I have explained how to use the TSVA, it is a great tool to have in your TradeStation tool shed!

DOWNLOAD:

To download this indicator for TradeStation you must be a gold member to RedlionTrader.com.  If you can see the download section below.. Your In!..

The price for membership is well worth the price for this indicator alone! Plus you get a new indicator every month as membership is for a year, each indicator come with support too..

Tags: Indicator, Tweet

This entry was posted on August 29, 2010 at 9:09 am and is filed under Headline, Indicator. You can follow any responses to this entry through the RSS 2.0 feed.