A volume-based true range indicator that calculates volume volatility using cumulative volume delta candles to identify price-volume trends and potential market movements.
Explore complementary indicator rolesHow it works
The Volume True Range (VTR) is calculated using lower-timeframe cumulative volume delta (CVD) candles by comparing the high, low, and previous close volumes. It determines the maximum volume range across different volume points in the candle.
The Volume Average True Range (VATR) is then computed by taking the RMA (Rolling Moving Average) of the VTR, similar to how the traditional Average True Range (ATR) is calculated. This provides a smoothed representation of volume volatility over a specified length of time.
Why it may be useful
The VTR and VATR help traders understand the relationship between price movement and trading volume, offering insights into potential trend strength and market dynamics. By analyzing volume volatility, traders can gain a deeper understanding of market sentiment and potential price direction.
These indicators can reveal hidden market characteristics that price-only analysis might miss, such as volume divergences and trend confirmations. They provide an additional layer of analysis that can help traders make more informed decisions about market entry and exit points.
When to explore it
The VTR and VATR are most effective when used in shorter timeframes with sufficient volume data, allowing for more accurate volume volatility calculations. Traders should use these indicators when they want to confirm price trends or identify potential trend reversals based on volume movement.
These indicators work best in markets with consistent trading volume and during periods of active price movement. They are particularly useful for traders looking to understand the underlying volume dynamics that might not be immediately apparent from price action alone.
Keep exploring
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.
