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Buyers vs Sellers %
This Buyers vs Sellers Imbalance Indicator provides real-time insight into the market's buying and selling pressure. It calculates and displays the percentage of buy and sell volume in relation to each other, using advanced price action analysis and multiple technical factors to determine market sentiment. Here's how it works:
How It Calculates the Imbalance Between Buyers and Sellers:
Candle Analysis: The indicator starts by analyzing each candle's price action. It breaks down the candle into three key parts:
Body: The area between the open and close, showing buying or selling dominance.
Upper Wick: The wick above the body, indicating selling pressure.
Lower Wick: The wick below the body, indicating buying pressure.
The relative sizes of these parts are calculated in ticks, which helps the indicator assess whether buyers or sellers were more dominant during the session.
Volume-weighted Calculation: The indicator uses volume-weighted calculations for each candle, taking into account the actual trading volume along with the candle size and wick sizes. This ensures that large, high-volume candles are given more weight than small, low-volume candles, improving accuracy.
Trend Filters (9 EMA): The indicator incorporates the 9-period Exponential Moving Average (EMA) to identify whether the market is in an uptrend or downtrend. If the price is above the 9 EMA, the indicator will give more weight to buying pressure, while if the price is below the 9 EMA, it will give more weight to selling pressure.
Support/Resistance & Pivot Points: It also tracks key support and resistance levels using pivot points. When the price breaks above resistance, buy pressure increases, and when it falls below support, sell pressure increases.
Candlestick Patterns: The indicator detects bullish and bearish candlestick patterns like Bullish Engulfing, Bearish Engulfing, Morning Star, and Evening Star, adjusting the imbalance based on the strength of these patterns.
Market Consolidation Detection: It detects periods of market consolidation using the Average True Range (ATR) and adjusts the buy/sell imbalance to avoid overreacting during choppy, sideways market conditions.
RSI Adjustments: The Relative Strength Index (RSI) is used to fine-tune the imbalance. If the RSI is overbought (above 70), selling pressure is weighted more. If the RSI is oversold (below 30), buying pressure is weighted more.
Time-of-Day Adjustments: The indicator adjusts the imbalance during certain times of the day (like the first and last hour of trading), when volatility and momentum are typically stronger.
Customizing to Your Trading Style:
Time Period for Imbalance Calculation: You can customize the lookback period for the imbalance calculation (default is 14), allowing you to adjust how sensitive the indicator is to recent price action.
Tick Size Adjustments: Set the tick size based on the specific instrument you're trading (e.g., ES1, NQ1) to ensure accurate calculations.
Trend Sensitivity (9 EMA): Customize how much weight the 9-period EMA has on the imbalance calculations. If you prefer a more aggressive trend filter, increase the weight given to the 9 EMA.
Consolidation Sensitivity: You can adjust how sensitive the indicator is to consolidation periods by modifying the ATR multiplier, allowing you to filter out false signals during sideways market conditions.
RSI Adjustment: Fine-tune how much the RSI affects the imbalance calculation, helping you react more effectively to overbought or oversold conditions.
Table Positioning: You can position the table displaying the buy and sell percentages anywhere on the chart (top-left, top-right, bottom-left, or bottom-right), giving you full control over your workspace.
How to Use the Indicator:
Watch for Imbalance Shifts:
A higher Buy % indicates stronger buying pressure, and a higher Sell % indicates stronger selling pressure.
Look for imbalances that align with other market conditions, such as price being above or below key support/resistance or the 9 EMA.
Combine with Other Tools:
Use this indicator alongside other technical tools like moving averages, trendlines, and candlestick patterns to enhance your decision-making.
Customization for Different Strategies:
Scalpers may prefer a shorter lookback period for quicker, more responsive imbalances.
Swing traders might prefer longer lookback periods and more focus on the overall trend (using the 9 EMA).
Range traders can use the consolidation feature to avoid trading during low-volatility periods.
How It Calculates the Imbalance Between Buyers and Sellers:
Candle Analysis: The indicator starts by analyzing each candle's price action. It breaks down the candle into three key parts:
Body: The area between the open and close, showing buying or selling dominance.
Upper Wick: The wick above the body, indicating selling pressure.
Lower Wick: The wick below the body, indicating buying pressure.
The relative sizes of these parts are calculated in ticks, which helps the indicator assess whether buyers or sellers were more dominant during the session.
Volume-weighted Calculation: The indicator uses volume-weighted calculations for each candle, taking into account the actual trading volume along with the candle size and wick sizes. This ensures that large, high-volume candles are given more weight than small, low-volume candles, improving accuracy.
Trend Filters (9 EMA): The indicator incorporates the 9-period Exponential Moving Average (EMA) to identify whether the market is in an uptrend or downtrend. If the price is above the 9 EMA, the indicator will give more weight to buying pressure, while if the price is below the 9 EMA, it will give more weight to selling pressure.
Support/Resistance & Pivot Points: It also tracks key support and resistance levels using pivot points. When the price breaks above resistance, buy pressure increases, and when it falls below support, sell pressure increases.
Candlestick Patterns: The indicator detects bullish and bearish candlestick patterns like Bullish Engulfing, Bearish Engulfing, Morning Star, and Evening Star, adjusting the imbalance based on the strength of these patterns.
Market Consolidation Detection: It detects periods of market consolidation using the Average True Range (ATR) and adjusts the buy/sell imbalance to avoid overreacting during choppy, sideways market conditions.
RSI Adjustments: The Relative Strength Index (RSI) is used to fine-tune the imbalance. If the RSI is overbought (above 70), selling pressure is weighted more. If the RSI is oversold (below 30), buying pressure is weighted more.
Time-of-Day Adjustments: The indicator adjusts the imbalance during certain times of the day (like the first and last hour of trading), when volatility and momentum are typically stronger.
Customizing to Your Trading Style:
Time Period for Imbalance Calculation: You can customize the lookback period for the imbalance calculation (default is 14), allowing you to adjust how sensitive the indicator is to recent price action.
Tick Size Adjustments: Set the tick size based on the specific instrument you're trading (e.g., ES1, NQ1) to ensure accurate calculations.
Trend Sensitivity (9 EMA): Customize how much weight the 9-period EMA has on the imbalance calculations. If you prefer a more aggressive trend filter, increase the weight given to the 9 EMA.
Consolidation Sensitivity: You can adjust how sensitive the indicator is to consolidation periods by modifying the ATR multiplier, allowing you to filter out false signals during sideways market conditions.
RSI Adjustment: Fine-tune how much the RSI affects the imbalance calculation, helping you react more effectively to overbought or oversold conditions.
Table Positioning: You can position the table displaying the buy and sell percentages anywhere on the chart (top-left, top-right, bottom-left, or bottom-right), giving you full control over your workspace.
How to Use the Indicator:
Watch for Imbalance Shifts:
A higher Buy % indicates stronger buying pressure, and a higher Sell % indicates stronger selling pressure.
Look for imbalances that align with other market conditions, such as price being above or below key support/resistance or the 9 EMA.
Combine with Other Tools:
Use this indicator alongside other technical tools like moving averages, trendlines, and candlestick patterns to enhance your decision-making.
Customization for Different Strategies:
Scalpers may prefer a shorter lookback period for quicker, more responsive imbalances.
Swing traders might prefer longer lookback periods and more focus on the overall trend (using the 9 EMA).
Range traders can use the consolidation feature to avoid trading during low-volatility periods.
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