VolumeZoneOscillator

Function Name: VolumeZoneOscillator

Tags: Oscillator

Category: Volume

An Axiom of technical analysis states that with few exceptions, all technical indicators can be classified as either trending or oscillating (nontrending) in their design. This new indicator, the volume zone oscillator (VZO), addresses both. In his book "Technical Analysis Of The Financial Markets", John J. Murphy explains that using oscillators provides three benefits: - Overbought and oversold conditions warn that price trend is overextended and vulnerable. - Divergence between oscillator and price action shows hidden strength or weakness in the market, which is not apparent in the price action. - The crossing of the zero line can give an important trading signal. The formula depends on only one condition: If today's closing price is higher than yesterday's, then the volume will have a positive value (bullish). Otherwise, it will have a negative value (bearish).

 

Source: Stocks & Commodities, May 2011: "In The Volume Zone"

 

period
	Default Value: 14  |  Minimum: 2  |  Maximum: 9999
	Type: Numeric
ShowVZO
	Default Value: -1
	Type: Boolean
ShowLevels
	Default Value: -1
	Type: Boolean