Divergences between price and the indicator can provide leading signals whereas the slope of the indicator shows if the bulls or bears are in control. Values above zero are bullish and indicate accumulation while values below zero indicate distribution. FVE crossing the zero line indicates that the short to intermediate balance of power is changing.

Also pictured are the ThinkScripter Volumetric Trendlines and Volume Profile (still under development).

Finite Volume Element

# TS_FiniteVolumeElement
# (c) 2009 http://www.thinkscripter.com
# thinkscripter@gmail.com
# Last Update 25 AUG 2009

declare lower;

input FVEPeriod = 22;
input smoothingPeriod = 10;
def intra = log(high)-log(low);
def vintra = stdev(intra, FVEPeriod);
def inter = log(hlc3)-log(hlc3[1]);
def vinter = stdev(inter,FVEPeriod);
def cutoff = 0.1*(vinter+vintra)*close;

def MF = (Close - (High + Low ) / 2 )+ hlc3 - hlc3[1] ;
def VE = if MF > cutoff then volume else if MF < -cutoff then -volume else 0;
def FVE = 100*sum(VE,FVEPeriod)/(average(volume,FVEPeriod)*FVEPeriod);

plot FiniteVolumeElement = FVE;
FiniteVolumeElement.setDefaultColor(color.cyan);

plot SmoothedFVE = Average(FVE,smoothingPeriod)  ;
SmoothedFVE.setDefaultColor(color.blue);

plot zero = 0;
zero.setDefaultColor(color.white);