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

The Positive Volume Index (PVI) links rising trading volume to changes in the price of a financial instrument. If trading volume increases compared to the previous day, PVI is defined by the percentage change in price.

The PVI indicator is designed so that its value only changes when the current day's trading volume is higher than the previous day's trading volume. Since price growth is usually associated with increased trading volume, PVI usually changes during an uptrend (and follows uptrends).

The following assumptions are used in the PVI 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 value of PVI (as already pointed out, PVI only changes when the trading volume increases) indicates 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 PVI of the Dow Jones Industrial Average is below its one-year moving average, the market is bearish in 95 out of 100 cases.

Attachment download

📎 positive_volume_index.mq5 (4.85 KB)

Source: MQL5 #518