Volume-Preceded Price Strategy

Volume-Preceded Price Strategy Indicator Description
This indicator is designed for short-term traders working on 1-15 minute charts who want to capitalize on the principle that "volume precedes price." The strategy identifies potential trading opportunities by detecting volume surges before price movements occur, providing both confirmed signals and early warnings.
Core Strategy Elements
Volume Analysis Framework

Volume Spike Detection: Identifies when current volume exceeds the volume EMA by a customizable threshold (default 1.5x)
Buy/Sell Volume Calculation: Separates volume into buying and selling components based on where price closes within the candle's range
Volume Force Index: Measures momentum by combining volume with price change direction

Multiple Confirmation Signals

Trend Identification: Uses ATR-based channels to define the current trend direction
Moving Average Confirmation: Employs fast (20) and slow (50) EMAs to confirm trend direction
RSI Filter: Helps avoid overbought/oversold conditions and confirms momentum direction
Volume Spread Analysis: Detects abnormal price ranges combined with volume spikes

Signal Types
Main Buy Signal (Green Triangle)
Triggers when:

Volume increases above threshold
Buying volume dominates (>60%)
Trend changes from down to up
Price closes above fast EMA
RSI is rising but not overbought
Volume force is positive

Main Sell Signal (Red Triangle)
Triggers when:

Volume increases above threshold
Selling volume dominates (>60%)
Trend changes from up to down
Price closes below fast EMA
RSI is falling but not oversold
Volume force is negative

Early Warning Signals (Small Circles)
Appear before confirmed signals when volume spikes suggest potential moves but not all confirmation conditions are met yet.
Visual Components

Support/Resistance Lines: Green and red lines showing current trend boundaries
EMA Lines: Blue (fast) and orange (slow) EMA lines for trend visualization
Signal Markers: Triangles for confirmed signals, circles for early warnings

How To Use This Indicator

For Day Trading: Apply to 1-5 minute charts for quick trades
For Swing Trading: Apply to 15-minute charts for slightly longer positions
Wait for Confirmation: Green/red triangles signal the highest probability entry points
Use Early Warnings: Small circles can help you prepare for potential setups
Adjust Parameters: Customize volume threshold and EMA periods to match your trading instrument's volatility

The core advantage of this strategy is its ability to detect institutional money flows through volume analysis before major price movements occur, potentially giving you an edge in fast-moving markets.