Intro to Equivolume and Candlevolume

[Soultrader 12]

Most of you are probably familiar with Equivolume and Candlevolume, but for those that live by price and volume this charting method is an extremely useful way of plotting price.

 

Equivolume was developed by Richard W. Arms, Jr. and plots the low and high as a square/rectangle with the width representing volume. "Equivolume displays prices in a manner that emphasizes the relationship between price and volume."

 

 

This is a very useful visual representation of the commitment and fight between buyers vs sellers. A fat equivolume tells us that alot of volume took place. If a fat squishy equivolume takes place at the top of a rally, this indicates that alot of buyers were still interested in pushing prices up but met as many sellers who were willing to dump it all at higher prices. These equivolume bars show a turning point.

 

In my opinion, it is an easier way to see price charts compared to trying to match each bar with each volume histogram. Below shows a few samples of various equivolume shapes.

 

 

Also attached is a free ebook from Richard W. Arms titled, "Trading with Equivolume".

 

Now, exploring this further I would like to introduce candlevolume. This is actually a better way of viewing equivolume as it mixes traditional candlesticks with equivolume, hence you are able to see the open, close, high, and low.

 

Below is a sample of a candlevolume chart. I will be adding a few charts of my own whenever I get a chance as well.

 

 

One of the most useful ways to use candlevolume charts is to identify "test" of the PDL/PDH as well as spotting potential weakening rallies, lower volume pullbacks, trend continuations, strengthening declines, etc...

 

Hopefully traders who already use this charting package can add their inputs here as well.

Trading With Equivolume.pdf

[Nick1984 10]

Thats actually quite a nifty tool. Never actually seen it on many charting platforms before. Is the actual candle type called Equivolume? Would make it much much easier to spot reversals and sticking points.

[Soultrader 12]

Yes, on my platform is it labeled equivolume or candlevolume. I understand it is not widely used and therefore not readily available on all trading platforms.

 

It makes VSA trading alot easier in my opinion.

[MC 10]

Yes, on my platform is it labeled equivolume or candlevolume. I understand it is not widely used and therefore not readily available on all trading platforms.

 

It makes VSA trading alot easier in my opinion.

 

I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

[Guest cooter]

I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

 

Don't assume. Ask somebody. Or better use the search function at this forum.

 

The accuracy of the TS constant "volume" charts has been discussed. They are not the same as Arms' Equivolume bars, IMHO.

[Reaver 10]

Thanks for the info, I am going to look into it.

[Soultrader 12]

Here we have todays candlevolume and equivolume in comparison on the Nikkei futures. Notice the break of the 30min range low was on a wide tall candle bar. This indicates a valid breakdown to the downside with a target at the previous day value high.

 

When price reached the VAH pivot, we saw a fat squishy candle (slightly tall) but wait.... the next bar is a skinny toothpick looking bar. Thus a classic VAH play can be taken.

 

The run up on the bounce of the VAH is followed by skinny bars indicating no demand. This is a warning signal and is followed by a power supply bar downwards to test the VAH once again. Notice the test is now on a skinny bar compared to the last test.

 

The bottom chart shows equivolume. I personally find candlevolume a better way to visually see price action and volume combined.

 

[MC 10]

Thanks for the differentiation, I can see why you like the first style better.

 

So the skinny bars on the last test show the VAH may hold up since the selling pressure has dried up right?

[brownsfan019 17]

Interesting charts James. As you know, I like trading off the candlesticks and these fat/skinny guys look funny to me. :o

 

It would take some getting used to, but I could see the value here, esp if volume is an integral part of your decision making.

[walterw 10]

This is a simple indicator I added some time ago wich can emulate equivolume on TS... http://www.traderslaboratory.com/forums/f46/tick-time-box-1433.html and this was a thread with some ideas of how to use http://www.traderslaboratory.com/forums/f34/tick-time-box-1435.html all this info has been experimental (never traded with it) cheers Walter.

[torero 10]

I assume Tradestation supports equivolume right?

I've used it somewhat in the past for stocks. I can see how your application especially combined with the tick delta indicator gives a great visual interpretation.

 

There have been lots of suggestions for this to be built for TS in the forum but have been suggested with tons of other features. Just don't hold your breath. I use another platform that has it (mrswing.com) for stocks.

[shreem 10]

Hello to all and great thread Soultrader. Just to let you know, Ensign Software has both equivolume and candlevolume integrated in the software and you can use it either for future, forex, stock or any other trading instrument that you like.

 

At 39.95$ US per month, this charting software is really a great asset. In fact there is a large portion on their website discussing all the possible ways volume can be used.

 

Since I am using them since some time, I really like their sofware. Very good quality for the price you pay monthly.

 

Just wa thinking to share my insight on another software alternative for people interested in going deeper in their studies of equivolume or candlevolume analsyis.

 

BTW, Soultrader, I really see your point when talking about the usefulness of incorporating candlevolume in VSA.

 

Sincerely

 

Shreem:)

[romek222 10]

And how i can generate own candlevolume charts?

[johncare 10]

Can a member tell me which platforms support equivolume charts now

 

 

 

Multicharts not yet responded 2 my QUESTION

 

NINJA i was told cannot do it & same for Esignal

 

john

 

 

 

Here we have todays candlevolume and equivolume in comparison on the Nikkei futures. Notice the break of the 30min range low was on a wide tall candle bar. This indicates a valid breakdown to the downside with a target at the previous day value high.

 

When price reached the VAH pivot, we saw a fat squishy candle (slightly tall) but wait.... the next bar is a skinny toothpick looking bar. Thus a classic VAH play can be taken.

 

The run up on the bounce of the VAH is followed by skinny bars indicating no demand. This is a warning signal and is followed by a power supply bar downwards to test the VAH once again. Notice the test is now on a skinny bar compared to the last test.

 

The bottom chart shows equivolume. I personally find candlevolume a better way to visually see price action and volume combined.

 

[apfx 10]

Just finished developing candle volume charts for amibroker

[Tams 20]

not exactly equivolume... but a step in that direction:

 

for MultiCharts and EasyLanguage programs:

 

Volume Weighed Color Bars

http://www.traderslaboratory.com/forums/f46/volume-weighed-color-bars-5709.html

 

192.107

[mtucker57 10]

Dick Arms (the Equivolume guy) has a new charting method that he calls "Arms Candlevolume."

 

I don't want to spam so I won't post any links, but if you're interested he does have a book out on the technique.