Volume Flow Indicator Signals | iSolani

Volume Flow Indicator Signals | iSolani: Decoding Trend Momentum with Volume Precision
In markets where trends are fueled by institutional participation, discerning genuine momentum from false moves is critical. The Volume Flow Indicator Signals | iSolani cuts through this noise by synthesizing price action with volume dynamics, generating high-confidence signals when capital flows align with directional bias. This tool reimagines traditional volume analysis by incorporating volatility-adjusted thresholds and dual-layer smoothing, offering traders a laser-focused approach to trend identification.


Core Methodology
The indicator employs a multi-stage calculation to quantify volume-driven momentum:

• Volatility-Adjusted Filter: Measures price changes via log returns, scaling significance using a 30-bar standard deviation multiplied by user-defined sensitivity (default: 2x).
  
• Volume Normalization: Caps extreme volume spikes at 3x the 50-bar moving average, preventing distortion from anomalous trades.
  
• Directional Volume Flow: Assigns positive/negative values to volume based on whether price movement exceeds volatility-derived thresholds.
  
• Dual Smoothing: Applies consecutive SMA (3-bar) and EMA (14-bar) to create the Volume Flow Indicator (VFI) and its signal line, filtering out transient fluctuations.
  

Breaking New Ground
This implementation introduces three key innovations:

• Adaptive Noise Gates: Unlike static volume oscillators, the sensitivity coefficient dynamically adjusts to market volatility, reducing false signals during choppy conditions.
  
• Institutional Volume Capping: The vcoef parameter limits the influence of outlier volume spikes, focusing on sustained institutional activity rather than one-off trades.
  
• Non-Repainting Signals: Generates single-per-trend labels (buy below bars, sell above) to avoid chart clutter while maintaining visual clarity.
  

Engine Under the Hood
The script executes through five systematic stages:

1. Data Preparation: Computes HLC3 typical price and its logarithmic rate of change.
   
2. Threshold Calculation: Derives dynamic cutoff levels using 30-period volatility scaled by user sensitivity.
   
3. Volume Processing: Filters raw volume through a 50-bar SMA, capping extremes at 3x average.
   
4. VFI Construction: Sums directional volume flow over 50 bars, smoothed with a 3-bar SMA.
   
5. Signal Generation: Triggers alerts when VFI crosses zero, confirmed by a 14-bar EMA crossover.
   

Standard Configuration
Optimized defaults balance responsiveness and reliability:

• Volume MA: 50-bar smoothing window
  
• Sensitivity: 2.0 (doubles volatility threshold)
  
• Signal Smoothing: 14-bar EMA
  
• Volume Cap: 3x average (hidden parameter)
  
• VFI Smoothing: Enabled (3-bar SMA)
  

By fusing adaptive volume filtering with price confirmation logic, the Volume Flow Indicator Signals | iSolani transforms raw market data into institutional-grade trend signals. Its ability to mute choppy price action while amplifying high-conviction volume moves makes it particularly effective for spotting early trend reversals in equities, forex, and futures markets.