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Volume Flowindicator for NinjaTrader 8

Volume Flow Indicator

VFI,introduced by Markos Katsanos, is based on the popular On Balance Volume (OBV) but with three very important modifications: * Unlike the OBV, indicator values are no longer meaningless. Positive readings are bullish and negative bearish. * The calculation is based on the day's median (typical price) instead of the closing price. * A volatility threshold takes into account minimal price changes and another threshold eliminates excessive volume. A simplified interpretation of the VFI is: * Values above zero indicate a bullish state and the crossing of the zero line is the trigger or buy signal. * The strongest signal with all money flow indicators is of course divergence.
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Manufacturer: nt8indicators
SKU: VFI
Vendor: nt8Indicators
$9.90

The Volume Flow Indicator is a long-term trend following study which uses the same principle as On Balance Volume. However, instead of comparing two Close prices of adjacent bars, it compares change in typical price with a so-called "cut off" value based on standard deviation. After that, volume for each bar is taken into account with a sign: positive or negative, based on the mentioned comparison. The final result is exponentially smoothed ratio of cumulative sum of "directed" volume to average volume over last 50 bars.

Values above the zero level are considered bullish and indicate long-term accumulation. Vice versa, negative values indicate distribution, thus being a bearish signal.

The Volume Flow Indicator is also used for spotting divergence; divergence in volume might signify trend reversal. Trend might be losing momentum when the Volume Flow Indicator fails to confirm a new High or Low in a cycle.

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Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

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