Volume Zone Oscillator

The Volume Zone Oscillator classifies each bar's volume as either positive (an up close) or negative (a down close), smooths that signed series with an exponential moving average, and expresses the result as a percentage of the same EMA applied to total (unsigned) volume. The output is a bounded oscillator between -100 and +100 that reads which side of the market volume has been concentrated on recently, not just whether volume was high or low. The published zone structure is drawn as level lines rather than left for the trader to remember: a reading beyond +/-40 marks an overbought or oversold zone where the current directional volume pressure is historically extreme, +/-60 marks the rarer climax extreme, and +/-15 marks the boundary the authors used to distinguish a genuine trend confirmation reading from noise around the zero line. This is a signed-volume oscillator, not a price oscillator - it can stay strongly positive through a shallow pullback if volume on the down bars stays light, which is itself part of the read (weak volume on the pullback supports the prior trend). Notes and limitations - Non-repainting: each bar's signed volume is fixed once that bar closes, and the EMA only looks backward. - "Volume" is tick volume (the count of price changes per bar) - forex has no exchange volume on either MetaTrader platform. The published VZO was designed against real traded volume on equities/futures; this is the standard MT4 substitute, and the zone levels should be read as a reasonable analogue rather than a literal match to the original research universe. - An unchanged close (open == close, or two consecutive identical closes) contributes zero to the signed series and full magnitude to the total series, per the published definition - it is not treated as missing data.

Indicator · MT4 · v1.0 · Free

Tags: Moving Average · Volume · Oscillator · MT4 Indicator · MQL4 Source Code

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