Developed by Buff Dormeier, VPCI won 2007 Charles H Dow award by the MTA. VPCI plots the relationship between price trend and the volume, as either being in a state of confirmation or contradiction.
Excerpt from article below:
"Fundamentally, the VPCI reveals the proportional imbalances between price trends and volume-adjusted price trends. An uptrend with increasing volume is a market characterized by greed supported by the fuel needed to grow. An uptrend without volume is complacent and reveals greed deprived of the fuel needed to sustain itself. Investors without the influx of other investors (volume) will eventually lose interest and the uptrend should eventually breakdown.
A falling price trend reveals a market driven by fear. A falling price trend without volume reveals apathy, fear without increasing energy. Unlike greed, fear is self-sustaining, and may endure for long time periods without increasing fuel or energy. Adding energy to fear can be likened to adding fuel to a fire and is generally bearish until the VPCI reverses. In such cases, weak-minded investor's, overcome by fear, are becoming irrationally fearful until the selling climax reaches a state of maximum homogeneity. At this point, ownership held by weak investor’s has been purged, producing a type of heat death capitulation. These occurrences may be visualized by the VPCI falling below the lower standard deviation of a Bollinger Band of the VPCI, and then rising above the lower band, and forming a 'V' bottom. "
Nearly all parameters are configurable and exposed via "Options" page (enable/disable BB, enable/disable breach-markings, enable/disable MA, ...).Also check the source for enabling "histogram" (difference between VPCI and MA of VPCI).
Do note that the shortTerm/longTerm lengths need tuning for your instrument. The default 5/20 is not optimal, in my quick check.
Could you please explain what is the meaning of green and red + sign in VPCI indicator
Thanks
Amlan
theheirophant
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@amlandutta, when the vpci is outside bollinger band
Kurbelklaus
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Dude seriously... you need to stop publishing this fast. I can't even keep up getting informed about your great indicators as fast as you're coding them! Bottomline - your work is amazing and highly appreciated here :)
LazyBear
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Thanks @Hpotsirc. I still have many in the pipeline coded and ready to be published...will not add anything new to the pipeline, promise..ok? :)
Kurbelklaus
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Hehe, no no please keep it up! I just realised that I already had 5 of your indicators in my todo-bookmark-folder when I added this one, thats why I came up with the comment. Your work is really gold to the community so once again: Thank you very much! :)
DhanusRamg
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@LazyBear, what is the ideal setting for 15 min chart. please indicate. You did say earlier that defaul5/20 is to be adjusted for short term and long term
timwest
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Is there any chance you could have it show you when to buy by painting the bars green when it is in a BUY signal and painting the bars RED when it is in a sell signal? And great work you are doing for everyone with all of your publishing - Excellent! Cheers, Tim