Positive and Negative Volume Indexes MT4

According to Fosback’s research, conducted from 1941 through 1975, when the PVI is trending above its one-year average, there is a 79% probability that the market is bullish.

When the NVI trends above its one-year moving average, 96 %of the market being bullish.

Similarly, if the NVI trends below its one-year average,
it is bullish 47% of the time.
However, if the PVI trends below its one-year average, the market is bullish only 33% of the time.

From this we can infer that PVI is good at identifying bear markets and that NVI is excellent at identifying a bull market trend.

When today’s volume is greater than yesterday’s volume, then PVI = Previous PVI + Sum of (Close Today – Close Yesterday) / (Close Yesterday)

When today’s volume is less than yesterday’s volume, then NVI= Previous NVI + Sum of (Close Today – Close Yesterday) / (Close Yesterday)