Indicators: Volume Zone Indicator & Price Zone Indicator

2014年5月23日

Volume Zone Indicator (VZO) and Price Zone Indicator (PZO) are by Waleed Aly Khalil.

Volume Zone Indicator (VZO)
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VZO is a leading volume oscillator that evaluates volume in relation to the direction of the net price change on each bar.

A value of 40 or above shows bullish accumulation. Low values (< 40) are bearish. Near zero or between +/- 20, the market is either in consolidation or near a break out. When VZO is near +/- 60, an end to the bull/bear run should be expected soon. If that run has been opposite to the long term price trend direction, then a reversal often will occur.

Traditional way of looking at this also works:
* +/- 40 levels are overbought / oversold
* +/- 60 levels are extreme overbought / oversold

More info:
drive.google.com/file/d/0Bx48Du_2aPFncEM3dHhyaWtTdjA/edit?usp=sharing


Price Zone Indicator (PZO)
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PZO is interpreted the same way as VZO (same formula with "close" substituted for "volume").


Chart Markings
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In the chart above,
* The red circles indicate a run-end (or reversal) zones (VZO +/- 60).
* Blue rectangle shows the consolidation zone (VZO betwen +/- 20)

I have been trying out VZO only for a week now, but I think this has lot of potential. Give it a try, let me know what you think.