Understanding market momentum and volume dynamics is essential for traders aiming to stay ahead of price movements. Among the most insightful tools in technical analysis are volume-based indicators that reveal the strength behind price changes. This guide explores powerful volume-centric indicators available on TradingView, focusing on how they integrate price, volume, and trend to deliver actionable insights.
Whether you're identifying accumulation zones, detecting divergence, or forecasting future price action, these tools offer clarity in complex markets. We’ll break down key volume indicators—such as GCM Price Based Color, Twiggs Money Flow, and VSA Wyckoff Volume—and show how to use them effectively in your trading strategy.
Understanding Volume-Driven Market Signals
Volume is more than just a number—it reflects market participation. When price moves are supported by strong volume, they carry greater conviction. Conversely, price changes on low volume may lack sustainability. By analyzing volume in context with price action, traders can distinguish between genuine breakouts and false moves.
Modern indicators go beyond simple volume bars. They normalize data, detect anomalies, and highlight imbalances between buyers and sellers. These insights help identify potential reversals, continuations, and high-probability entry points.
👉 Discover how volume analysis can transform your trading decisions with advanced tools.
GCM Price Based Color: Spotting Real "Pump" Events
The GCM Price Based Color Indicator helps traders identify meaningful volume surges—what many call “pumps”—by filtering out noise. Unlike standard Volume Rate of Change (VROC), this indicator only calculates momentum when both volume and price are rising.
How It Works
- A Simple Moving Average (SMA) of volume is calculated over a user-defined period (default: 420).
The script checks two conditions:
- Is current SMA volume greater than the previous bar?
- Is the closing price higher than the prior close?
- Only when both are true does it compute a VROC value.
- The result is normalized to a 0–100 scale based on historical highs, enabling cross-asset comparison.
Visual Cues and Alerts
- Green line: Price is up on the current bar.
- Red line: Price is down.
- Grey line: No change in price.
- Two threshold lines mark Small Pump (default: 0.5) and Big Pump (default: 10.0) levels.
- Custom alerts notify users when thresholds are breached.
This dual-condition logic ensures signals reflect real buying pressure rather than random spikes.
Two Candle Theory (Filtered): Decoding Market Sentiment
This indicator classifies each candle into one of nine sentiment categories based on close position within its range and comparison to the prior candle’s high/low.
Classification Logic
Each candle receives a label like:
- Strongest Bullish (SBu) or Strongest Bearish (SBa)
- Moderate, Weak, or Slight variations
- Neutral for range-bound action
An optional volume spike filter ensures only high-conviction signals appear—ideal for filtering noise in volatile markets.
Display Flexibility
- Labels appear above or below candles
- Bars can be color-coded by sentiment
- Full customization of visibility and colors
Use this tool to spot momentum shifts early, especially when strong sentiment aligns with breakout moves.
ADX and DI – Measuring Trend Strength
The ADX and DI indicator combines three components to assess trend direction and strength:
- DI+ (Green): Measures bullish momentum
- DI– (Red): Tracks bearish momentum
- ADX (Blue): Quantifies overall trend strength
Key Thresholds
- ADX > 20: Trending market (valid for entries)
- ADX < 20: Sideways or consolidating phase (avoid trend trades)
Trading Rules
- Long entry: DI+ > DI– and ADX > 20
- Short entry: DI– > DI+ and ADX > 20
- Exit when ADX declines or DI lines cross
Combine with RSI or moving averages for stronger confirmation.
Multi-TF Volume & Price Analysis: A Holistic View
This advanced dashboard analyzes four user-selected timeframes simultaneously, delivering a consolidated view of market health.
Core Metrics Per Timeframe
- Bullish vs. bearish volume %
- Relative Volume (RVol)
- Cumulative Volume Delta (CVD)
- Price change %
- Volume spikes (customizable threshold)
Smart Summarization
Each timeframe gets a label:
Bullish Strong, Bullish Moderate, Bearish Strong, etc.
A cumulative summary combines all data into:
- Overall bullish/bearish bias
- Aggregate CVD
- Simplified volume level (Low/Normal/High)
Integrated VWAP adds context to current pricing.
👉 See how multi-timeframe volume analysis improves trade accuracy.
PVSRA Volume Suite with Volume Delta
This AI-enhanced suite uses volume delta and volatility-adjusted thresholds to detect institutional activity.
Key Features
Color-coded vectors:
- 🔴 Red: Extreme bearish volume/spread
- 🟢 Green: Extreme bullish volume/spread
- 🔵 Blue / 🟣 Violet: Above-average activity
- Volume Delta: Estimates buying/selling pressure using sub-frame data
- AI Predictive Alerts: Flags potential trend shifts using EMA crossovers + statistical analysis
- ATR-based thresholds: Adapts to changing volatility
Best used on intraday charts where tick-level volume is reliable.
Draw on Liquidity [PhenLabs]: Mapping Key Zones
This indicator identifies high-liquidity zones—areas where large orders likely reside—using pivot points validated by volume.
Dual Display Modes
- Historical Mode: Shows all past and present liquidity levels
- Current Mode: Displays only untested zones for active trading
Real-Time Dashboard
Tracks:
- High Draw Zones (resistance)
- Low Draw Zones (support)
- Active alerts when price approaches key levels
Lines are color-coded (blue = high, red = low) and extend dynamically with price.
Use it alongside trend analysis to time entries near institutional order clusters.
Gufran – Volume Divergence: Anticipating Reversals
This tool detects bullish and bearish divergences between price and volume, confirmed by RSI.
Signal Types
- Bullish Divergence: Price makes lower low, but volume shows higher low
- Bearish Divergence: Price hits higher high, yet volume forms lower high
RSI confirmation increases reliability:
- Bullish signals require oversold RSI
- Bearish signals validate in overbought territory (optional relaxation)
Dotted lines show normalized volume divergence; solid lines trace price swings.
Ideal for swing traders seeking early reversal clues.
Twiggs Money Flow: Enhanced CMF Alternative
Twiggs Money Flow (TMF) improves upon Chaikin Money Flow with better smoothing and flexibility.
Advanced Features
- Supports SMA, EMA, WMA, or VWMA for smoothing
- Optional Hull Moving Average (HMA) to reduce lag
- Dynamic thresholds for long/short signals
- Bar coloring: Aqua (bullish), Fuchsia (bearish), Gray (neutral)
TMF measures net buying/selling pressure as a percentage, making it highly responsive.
Use it to:
- Confirm trends
- Spot divergences
- Filter trades using threshold crossings
Backtest different settings per asset class for optimal results.
Frequently Asked Questions
Q: What is the best volume indicator for breakout confirmation?
A: The Multi-TF Volume & Price Analysis indicator excels here by showing relative volume spikes across timeframes, confirming whether a breakout has institutional support.
Q: How do I avoid false signals in choppy markets?
A: Use filters like ADX > 20 to confirm trends before acting on volume signals. Also, combine indicators—e.g., wait for both TMF crossover and rising volume.
Q: Can volume indicators predict reversals?
A: Yes. Tools like Gufran’s Volume Divergence and Twiggs Money Flow detect weakening momentum before price turns, especially when aligned with RSI or support/resistance levels.
Q: Are these indicators suitable for crypto trading?
A: Absolutely. Cryptocurrencies often exhibit strong volume-driven moves, making these tools highly effective across BTC, ETH, and altcoins.
Q: Should I rely solely on one volume indicator?
A: No. Combine multiple tools—e.g., use PVSRA for real-time pressure and Draw on Liquidity for structural zones—for a complete picture.
Q: How important is timeframe alignment?
A: Critical. Always check higher timeframes first. A bullish signal on 5-minute charts carries more weight if daily volume supports upward momentum.
Final Thoughts: Building a Volume-Aware Strategy
Volume doesn’t lie. When integrated properly, volume-based indicators give traders an edge by revealing the true force behind price action.
From spotting accumulation with VR1 DEMA to predicting moves with EdgeTerminal’s model, these tools empower disciplined decision-making. Always combine signals with risk management—and never trade based on a single indicator alone.
👉 Access powerful trading tools that put volume intelligence at your fingertips.