At first glance it doesn't seem like a very useful indicator but upon further research this is one of those hidden gems.
According to my findings the Volume Flow Indicator was first introduced by Markos Katsanos and is based on the popular On Balance Volume (OBV) indicator.
A simplified interpretation of the Volume Flow Indicator is:
- Indicator above the Zero line indicate a strong bullish state.
- Indicator below Zero line indicate a strong bearish state.
- A reliable trade signal is said to be the crossing of the Zero line which is a major signal for a BUY or SELL signal.
- The strongest signal with all money flow indicators is of course divergence so keep an eye out for it.
- Markos Katsanos himself suggests using a "0.2" coefficient for day trading and "0.1" for intra-day.
For further reading and studies on the Volume Flow Indicator please download the PDF below.
Mladen edit : The Vlume Flow Indicator was already made by me but this version is some what changed - difference is that this version allows "pre smoothing" - the idea was to check if the value can be smoother but without lag - it seems to be working OK, (see the lower example in picture 2 for comparison - the difference is obvious)
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Edit ............. posted same updated working version (1090 bug removed) the lower ones
