Negative Volume Index Indicator - MetaTrader 5 Script | Forex Indicator Download - MT4/MT5 Resources

Negative Volume Index (NVI) It is a free technical indicator used for advanced chart analysis on MT4 and MT5 platforms. It is based on tick volume (which can be replaced by actual trading volume in MT5) and adds two useful features:

The Negative Volume Index is displayed in a separate chart window below the main chart and does not use any standard or custom indicators in its code. This implementation of NVI can be used on MT4 and MT5 platforms.

The Negative Volume Index (NVI) indicator is a fairly old technical indicator, developed by Paul L. Dysart in the first half of the 20th century and improved by Norman G. Fosback in 1976. It consists of an oscillator line in a separate indicator window. The line will rise or fall only if the volume is less than the previous bar's volume.

The classic interpretation of a negative volume index is that confirmation of a trend by subsequent moves in the NVI indicates the strength of the trend. The idea is that a strong trend will continue even if volume declines. A crossover with its moving average can be considered trend confirmation.

Like other MA crossover strategies, this strategy is prone to false or lagging signals.

Another option is to look at the divergence between price and its negative volume index to spot trend reversals. Here, the price chart is making new highs while NVI is showing lower lows. A long-term downward trend follows:

Unfortunately, such signals are not always clear or accurate. with other Divergence indicator , it makes sense to use additional confirmation before entering or exiting a trade.

Using our version of the Negative Volume Index, it can be set up to display higher timeframe NVI values ​​on lower timeframe charts. Here is the same EUR/USD @ D1 chart as above, but this time it is accompanied by the Negative Volume Index indicator from the weekly time frame:

Considering that the volume on higher timeframe bars can differ significantly from the volume on lower timeframe bars, the resulting NVI curve may provide a different picture of market conditions.

The Negative Volume Index indicator can be switched to calculate and display the Positive Volume Index. This allows traders to see price changes accompanied by increases in trading volume. The resulting curve is not much different from a price chart:

Therefore, PVI is considered to provide less information than NVI.

Attachment download

📎 nvi.mq5 (4.73 KB)

Source: MQL5 #55320