Dixson's Weighted Volume Flow analyzes buy and sell volume distribution by calculating volume allocation based on price action within each trading bar.
Explore complementary indicator rolesHow it works
The indicator calculates volume allocation by proportionally distributing total volume based on the relationship between close, high, and low prices. It uses specific formulas to determine buy and sell volume: buy volume is calculated as (Close - Low) / (High - Low) multiplied by total volume, while sell volume uses (High - Close) / (High - Low) multiplied by total volume.
These calculated volumes are then dynamically scaled relative to their combined total, creating horizontal bars that represent the proportional buying and selling activity. The bars are color-coded green for buy volume and red for sell volume, with lengths that visually represent the dominance of each volume type within the trading period.
Why it may be useful
Dixson's Weighted Volume Flow provides traders with a nuanced understanding of market sentiment by breaking down volume distribution beyond traditional volume analysis. It reveals the underlying strength of buying and selling pressure within each trading period, offering insights into potential trend confirmations or reversals.
By visualizing volume allocation, traders can identify subtle shifts in market dynamics that might not be apparent through standard volume indicators. This approach allows for more precise interpretation of market activity, helping traders make more informed decisions about entry, exit, and potential trend changes.
When to explore it
The indicator is most effective in markets with clear volume patterns and during periods of significant price movement. It works particularly well when used alongside other technical analysis tools to confirm market sentiment and potential trend changes. Traders can leverage this indicator in various timeframes, from intraday to longer-term charts.
Optimal use includes identifying volume imbalances, detecting potential trend reversals, and understanding the underlying buying and selling pressures in different market conditions. It is especially useful during volatile market periods, breakouts, and when trying to gauge the strength of a particular price movement.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
