Correlation of Price Spread and Volume
Correlation between candle's price spread (length of candle of each bar) and volume.
Generally, increases in volume precede significant price movements. However, If the price is rising in an uptrend but the volume is reducing, it may show that there’s little interest in the instrument, and the price may reverse.
The closer the correlation is to 1.0, indicates the instruments will move up and down together as it is expected with volume and price spread. So the correlation Indicator aims to display when the price spread and volume is in correlation and not. Blue color represent positive correlation while orange negative correlation. The strength of the correlation is determined by the width of the bands.
Generally, increases in volume precede significant price movements. However, If the price is rising in an uptrend but the volume is reducing, it may show that there’s little interest in the instrument, and the price may reverse.
The closer the correlation is to 1.0, indicates the instruments will move up and down together as it is expected with volume and price spread. So the correlation Indicator aims to display when the price spread and volume is in correlation and not. Blue color represent positive correlation while orange negative correlation. The strength of the correlation is determined by the width of the bands.
Versionsinformation:
Added horizontal lines to indicate the strength of the correlation (default 0.2).
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Updated the title
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Fix the algorithm
Versionsinformation:
Added yellow line for the correlation with the user-selected instrument.
Versionsinformation:
Changed the default length parameter