Philosophy
Analysis through thousands of instruments across all timeframes over the years via CQG’s Entry Signal Evaluator, revealed some very consistent patterns in terms of how long trends can last before they enter there first correction, how long that correction typically lasts, before the most difficult part, which is whether the trend will restart. Part of understanding this process was to assess how long it takes before a swing pattern or Peak forms in that trend. Peak Volume HiLoCount measures the number of bars between changes to Peak points of those typically above the market (HiCount) and those typically below the market (LoCount). The difference between the Volume based Peak and |normal Peak, is the fact that Peak points are qualified by an expansion of Volume over and above a user defined long term average of Volume at Peak points. This is normally set at least 1.25 times normal range (See page 230 of Trading Time).
Interpretation
The thresholds for this study vary considerably from the standard HiLoCount, in that Peak Volume HiLoCount can go for an extended period without changing value. This study has its biggest application in individual stocks as it qualifies corrections or turning points by highlighting that volume is expanding. This is usually at its most powerful at trend endings. The beginnings of trends normally see the count stay flat. (see page 230 of Trading Time)
PVHLCnt Parameters
|
Name |
Default |
Definition |
|
LLev |
2 |
Qualifies how many bars are to the left of the mid point. |
|
RLev |
2 |
Qualifies how many bars are to the right of the mid point. |
|
Mult |
1.0 |
Qualifies the threshold for expansion of Volume so trigger a change in the Count and should be set beyond the default. |
|
Len |
250 |
Qualifies how many bars that lookback period is to compare Volume. |