LazyBear

Indicator: Volume Price Confirmation Indicator (VPCI)

Developed by Buff Dormeier, VPCI won 2007 Charles H Dow award by the MTA. VPCI plots the relationship between price trend and the volume , as either being in a state of confirmation or contradiction.

Excerpt from article below:

"Fundamentally, the VPCI reveals the proportional imbalances between price trends and volume-adjusted price
trends. An uptrend with increasing volume is a market characterized by greed supported by the fuel needed to
grow. An uptrend without volume is complacent and reveals greed deprived of the fuel needed to sustain itself.
Investors without the influx of other investors ( volume ) will eventually lose interest and the uptrend should
eventually breakdown.

A falling price trend reveals a market driven by fear. A falling price trend without volume reveals apathy, fear
without increasing energy. Unlike greed, fear is self-sustaining, and may endure for long time periods without
increasing fuel or energy. Adding energy to fear can be likened to adding fuel to a fire and is generally bearish
until the VPCI reverses. In such cases, weak-minded investor's, overcome by fear, are becoming irrationally
fearful until the selling climax reaches a state of maximum homogeneity. At this point, ownership held by weak
investor’s has been purged, producing a type of heat death capitulation. These occurrences may be visualized by
the VPCI falling below the lower standard deviation of a Bollinger Band of the VPCI, and then rising above the
lower band, and forming a 'V' bottom. "

Full article: http://www.mta.org/eweb/docs/2007DowAwar...

Nearly all parameters are configurable and exposed via "Options" page (enable/disable BB, enable/disable breach-markings, enable/disable MA, ...).Also check the source for enabling "histogram" (difference between VPCI and MA of VPCI).

Do note that the shortTerm/longTerm lengths need tuning for your instrument. The default 5/20 is not optimal, in my quick check.
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//
// @author LazyBear
//
// If you use this code in its orignal/modified form, do drop me a note. 
// 
study("Volume Price Confirmation Indicator [LazyBear]", shorttitle="VPCI_LB")
shortTerm=input(5)
longTerm=input(20)

src=close
vpc = vwma(src, longTerm) - sma(src, longTerm)
vpr = vwma(src, shortTerm)/sma(src, shortTerm)
vm  = sma(volume, shortTerm)/sma(volume, longTerm)

vpci = vpc*vpr*vm
hline(0)
plot(vpci, color=orange, linewidth=2)

DrawMA = input(true, type=bool, title="Draw MA on VPCI?")
lengthMA=input(8, "VPCI MA Length")
s=sma(vpci, lengthMA)
plot(DrawMA?s:na, color=teal)

// Uncomment this line to enable histogram
// plot(DrawMA?(vpci-s):na, color=blue, style=histogram)

DrawBands = input(false, type=bool)
HighlightBreaches = input(true, type=bool)
length=input(20, title="BB Length")
mult=input(2.5)
bb_s = vpci
basis = sma(bb_s, length)
dev = (mult * stdev(bb_s, length))
upper = (basis + dev)
lower = (basis - dev)

plot(DrawBands?basis:na, color=gray, style=line)
p1 = plot(DrawBands?upper:na, color=gray)
p2 = plot(DrawBands?lower:na , color=gray)
fill(p1, p2, blue)

b_color = (bb_s > upper) ? red : (bb_s < lower) ? green : na
offs_v = 0.3
breach_pos = (bb_s >= upper) ? (bb_s+offs_v) : (bb_s <= lower ? (bb_s - offs_v) : 0)
Breached=(bb_s >= upper) or (bb_s <= lower)
plot(HighlightBreaches and Breached ? breach_pos : na, style=cross, color=b_color,linewidth=3)
Dear Sir,

Could you please explain what is the meaning of green and red + sign in VPCI indicator

Thanks

Amlan
+38 Svara
theheirophant amlandutta
@amlandutta, when the vpci is outside bollinger band
+2 Svara
Nice one!
Svara
Hi ,
I need your help on coding in Trading view. I need to draw one line on high of the selected bar and one line on low of selected bar.
Can you please help.

+2 Svara
Is there any chance you could have it show you when to buy by painting the bars green when it is in a BUY signal and painting the bars RED when it is in a sell signal? And great work you are doing for everyone with all of your publishing - Excellent! Cheers, Tim
+10 Svara
Do you mean, like this?

+25 Svara
How can I get this?
Svara
Any chance you'd be willing to release this, looks great!
+3 Svara
Dude seriously... you need to stop publishing this fast. I can't even keep up getting informed about your great indicators as fast as you're coding them! Bottomline - your work is amazing and highly appreciated here :)
+13 Svara
LazyBear Kurbelklaus
Thanks @Hpotsirc. I still have many in the pipeline coded and ready to be published...will not add anything new to the pipeline, promise..ok? :)
+11 Svara
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