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

The Negative Volume Index (NVI) links falling volumes to changes in the price of a financial instrument. If volume has decreased compared to the previous day, NVI is defined by the percentage change in price.

The NVI indicator is designed so that its value only changes when the current day's volume is lower than the previous day's volume. Since price declines are usually associated with reduced trading volume, NVI will typically shift to a downward trend.

The following assumptions are used in the NVI interpretation. Amateur investors who follow the crowd are most active when trading is active and volume is rising. The opposite scenario, when trading volume decreases, is that the market is controlled by professionals who make smart money. Therefore, changes in the NVI value (as already pointed out, the NVI changes only when the trading volume decreases) indicate that the era of making "smart money" in the market has arrived.

In his book "Stock Market Logic: The Complex Ways to Profit on Wall Street," Norman Fosback states that if the Dow Jones Industrial Average's NVI is above its one-year moving average, the market is bullish 95 out of 100 times.

Attachment download

📎 negative_volume_index.mq5 (4.85 KB)

Source: MQL5 #517