Relative Volume Gradient Paintbars for Thinkorswim [VIDEO]
Relative Volume Gradient Paintbars Study for Thinkorswim
Today I’m releasing an overhaul of the Relative Volume indicator for Thinkorswim that I’ve been working on for awhile. This is one of my favorite thinkscript studies and I’ve been experimenting with it in my own trading for awhile, so I wanted to go ahead and get the update released on the site and see if it can add some value for my fellow traders.
Like all of our upgrades, they’re completely free to prior purchasers, just go to the My Account > Orders > View Order Details area of the site and the new links should be posted there for you to install.
- Relative Volume Gradient Paintbars to highlight the highest relative volume bars!
- Custom colors
- 4 custom coloration thresholds
- Different color scheme for up bars vs. down bars
- MA-based relative volume for tick charts, also with gradient paintbars!
- Combined tick volume / trade volume in the same indicator, just switch the mode in settings. Simply add 2 instances if you want both relative tick count & share count on the same chart!
- Combined long term studies into 1 study with custom period reset (12 for monthly charts, 52 for weekly charts, 252 for daily charts).
- Added a TIME BASED relative volume QUOTE COLUMN so you can see when a stock in your watchlist has surging volume on whatever INTRADAY timeframe you want (5 minute, hourly, etc).
- Added a MA BASED relative volume QUOTE COLUMN so you can see when a stock in your watchlist has surging volume on ANY timeframe you want (hourly, daily, etc).
- High volume bars now immediately pop out visually on your chart without having to look down at the histogram.
- You can even hide the histogram altogether and just use the paintbars function to gauge volume and save screen space.
- This release really simplifies down the number of scripts and makes each more powerful and customizable.
- MA-based relative volume indicator can be used on tick charts, intraday minute charts, or daily and higher charts.
- Using the MA-based relative volume on tick charts lets you see an additional dimension of volume on the same graph (tick count bars combined with share count highlighting really adds additional depth of information).
I’m finding the volume gradient to be a real value add, and especially on the tick charts:
Relative Volume Indicator for ThinkOrSwim
For many of you subscribe to the classical trading philosophies of legendary traders like Jesse Livermore and Richard Wyckoff, there is probably no need for me to further emphasize the importance of volume here. Over the years I’ve read many, many trading books, and after reading many of these classical traders’ books, pamphlets, and articles, I realized my current toolset for analyzing volume was insufficient. And that is what led to this relative volume indicator for thinkorswim.
Most trading websites tell you to watch for volume surges, and there are many ways of determining when a surge is happening. Some relative volume indicators simply check to see when volume is above its moving average. But these measures are highly inaccurate, especially at certain times of the day. Volume is always going to be higher at the open and the close, and these extremes skew the moving average for the rest of the day, making it basically useless.
What I really needed was a way to see what the average volume was for a given bar at a specific time of day, and then to compare the current volume to that bar’s average to see if there was anything unusual going on. So I set about trying to develop ways of automating my volume analysis as much as possible, and making it abundantly obvious whenever there was a trading anomaly in the works. And that journey led to this set of ThinkScript studies for ThinkOrSwim, which provide an easy, visual way for stock traders to quickly determine if a tradable event is occurring.
How it works:
- A given bar’s volume is averaged over a customizable look-back period (10 days by default).
- The current bar’s volume is compared to its average volume and ranked in relation to that average.
- If the current bar’s volume is below average, it will be dark gray; if it’s above average by certain thresholds it gets brighter, and turns blue at extremely high readings, drawing your immediate attention.
What you get:
- A custom-programmed relative volume indicator that tells you if the current volume is below average, just average, above average, or truly extreme.
- A custom-programmed relative trades indicator that shows you the relative number of trades that are happening — or, said another way, the relative speed at which the tape is scrolling — indicating the amount of interest there is at the current price level.
- A special bonus indicator showing the average shares per trade for the current bar. When you see this number jump you know the big boys have joined the party!
Why you want it:
- Find key turning points on the chart before the move is over. Identify where unusual buying or selling has begun to create a reversal and start building a position early.
- See what the big boys are doing so you can follow in their wake and stay on the right side of the trade!
- Never be fooled by the basic volume graph again. Your typical volume graph can lead you astray and trick you into thinking there is strong commitment behind a move when there really isn’t, or make you miss the moves that do have strong commitment behind them but are often impossible to find without the right tools!
Email me here or leave a comment below!