Momentum and volume
Volume Pulse
Flags abnormal volume against the symbol's own baseline, adjusted for time of day, with a buy versus sell pressure read.
Volume means little in isolation. A million shares at the open is unremarkable; the same figure at two in the afternoon is an event. Volume Pulse compares each bar against a baseline that can be measured for that point in the session, so the open stops registering as a permanent spike.
Spikes are detected either as a multiple of the average or as a standard deviation score, whichever suits the instrument. Outside regular hours a higher threshold applies, since thin after hours volume otherwise trips the detector constantly.
Alongside the spike detection, buy and sell pressure are estimated from where each bar closes within its own range, which gives a rough read on which side the volume was working for.
How to read it
- A breakout on a volume spike has participation behind it. One without is worth less.
- The time of day adjustment is what makes the tool usable intraday. Leave it on.
- Standard deviation detection suits instruments with erratic volume better than a fixed multiple.
Questions
Which detection method should I use?
Relative multiple is simpler and works on most symbols. The standard deviation method adapts better where volume is erratic.
Does it work on futures and crypto?
Yes, anywhere the data feed reports volume.
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