This indicator is developed from the idea of using the normalized volumes
First, the normalized values are now expressed as a percentage of the average value over the period. Accordingly, the data on the graph, and can now take negative values, which means a lull in the market.
Another useful innovation is the color histogram columns depending on the amount of normalized volume.
- The blue color indicates that the current amount is less than the average for the period;
- Dark green means a small excess amount compared with the average for the period;
- Light green indicates that the increase overcame Fibo-level 38,2% compared with the average for the period;
- Yellow means that the increase overcame Fibo-level 61,8% compared with the average for the period;
- White (in the figure below - the red, that is not merged with the background) color indicates that the increase in the level broke the 100% compared with the average for the period.
Oscillator normalized volume
The figure above shows an example of using an oscillator normalized volume when analyzing the probability of breakdown pivot-levels.
The yellow column of the histogram shows that the breakdown in the near future is possible. White (in the picture - red) column indicates that the breakdown is happening right now, and he likely is true.
In terms of long-term trend breakdown alleviated because overall volume for the period is high. In this case it is sufficient to bar histogram was green.
When the market is in a position close to the Flat, the majority of indicators will generate many false signals. Meanwhile, there is a simple way to filter out, if not all, a very substantial part of such signals. Since the emergence of strong trend movements in the market are almost always accompanied by an increase in the volume, the use of volume indicator can be an effective solution for determining the optimal entry point into the market.
Proposed indicator normalized volume builds a schedule ticks value assigned to the average volume for the period. Through this normalization of the current value can be a simple and clear criteria for possible entry into the market. Thus, finding the line above the 1.0 schedule indicates that the current value is higher than the average for the period and because the signals from the indicators, which are traded, should be regarded as true. 8. Recommended period averaging 8.
"Market Profile was developed by Peter Steidlmayer, a remarkable and ingenious thinker. He found a natural expression of the market (volume) and submitted it this way (bell curve) so that you can read unbiased information generated market. While trading, the seems to be an art, a solid trading methodology can minimize its subjective elements and maximize the objective. Most market participants do so, considering many factors external to the market itself, - the foot, the duration of the price movement in a given direction, the schedule of when to sell ( for example, only the first two hours of work), and the like. These external factors, improving the trading, most of them are aimed at reducing subjectivity. But traders need to use inside information to develop a strategy for entry and exit, and to identify the moment when the actual trade potential show itself. isolating the internal information, technical analysis attempts to build a mental structure. To understand what mental construction, it is useful to recall how the chess grandmasters. If at any time, the game show for a second grand master chess board, he will be able to reconstruct the exact position of each figure. However, if you also show him a second random (not playing) a combination of chess pieces, it will not be able to reconstruct it. Why? Because the grand master to understand the position of each figure in terms of mental constructions. Berär board does not fit in any of these structures, so they can not organize what he saw. "
Link to full text: http://www.forextimes.ru/article/a26747p.htm
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