Volume-Based Trading Indicators

DexVolume provides several specialized trading indicators based on volume data to help you identify market trends and potential trading opportunities.

Volume Momentum Indicator (VMI)

The Volume Momentum Indicator measures the rate of change in trading volume over a specified period:

Positive VMI: Indicates increasing trading activity, potentially signaling growing interest.
Negative VMI: Suggests declining trading activity, which may indicate waning interest.
VMI Crossovers: When the VMI crosses its moving average, it may signal a potential change in trend.

How to use: Look for VMI values above 20 for strong bullish volume momentum or below -20 for strong bearish volume momentum.

Volume Ratio Indicator (VRI)

The Volume Ratio Indicator compares current volume to the average volume over a specific period:

VRI > 1.5: Volume is significantly higher than average, suggesting strong market interest.
VRI < 0.5: Volume is significantly lower than average, indicating potential lack of interest.
VRI Trends: Consistently increasing VRI may precede significant price movements.

How to use: VRI values above 2.0 often coincide with major market events or news that could drive price action.

Volume Oscillator (VO)

The Volume Oscillator compares two volume moving averages to identify shifts in trading activity:

Positive VO: Short-term volume exceeds long-term volume, suggesting increasing market activity.
Negative VO: Long-term volume exceeds short-term volume, indicating decreasing market activity.
VO Divergence: When VO moves in the opposite direction of price, it may signal a potential reversal.

How to use: Watch for VO divergences with price to identify potential trend reversals or continuations.

Volume Weighted MACD (VW-MACD)

This indicator combines the traditional Moving Average Convergence Divergence (MACD) with volume weighting:

Signal Line Crossovers: When VW-MACD crosses above its signal line, it may indicate a bullish signal, and vice versa.
Zero Line Crossovers: When VW-MACD crosses above zero, it suggests a potential uptrend, and vice versa.
Divergences: When VW-MACD diverges from price, it may signal a potential reversal.

How to use: VW-MACD provides stronger signals than traditional MACD when volume confirms the price movement.

Platform-Specific Indicators

Exchange Dominance Index (EDI)

The Exchange Dominance Index measures the percentage of total trading volume occurring on a specific exchange:

High EDI: Indicates concentration of trading on a particular platform, which may affect price discovery.
Changing EDI: Shifts in EDI can signal changing trader preferences or liquidity migration.
EDI Divergence: When EDI moves contrary to overall volume trends, it may indicate platform-specific issues.

How to use: Monitor EDI to identify which platforms have the most influence on a token's price at any given time.

Liquidity Flow Indicator (LFI)

The Liquidity Flow Indicator tracks the movement of trading activity between different platforms:

Positive LFI: Indicates increasing liquidity on a platform relative to others.
Negative LFI: Suggests decreasing liquidity on a platform relative to others.
LFI Spikes: Sudden changes may indicate arbitrage opportunities or platform-specific events.

How to use: LFI can help identify potential arbitrage opportunities between different exchanges.

Token-Specific Indicators

Volume Concentration Index (VCI)

The Volume Concentration Index measures how concentrated trading volume is among the top tokens:

High VCI: Trading activity is concentrated in a few tokens, potentially indicating a narrow market.
Low VCI: Trading is distributed across many tokens, suggesting broader market participation.
Changing VCI: Shifts can indicate changing market dynamics or investor focus.

How to use: A decreasing VCI often precedes periods of altcoin performance as interest spreads beyond major tokens.

Token Velocity Indicator (TVI)

The Token Velocity Indicator measures how quickly a token's trading volume is changing relative to its market cap:

High TVI: Indicates tokens with rapidly increasing trading activity relative to their size.
Low TVI: Suggests tokens with stable or decreasing trading activity relative to their size.
TVI Rankings: Comparing TVI across tokens can identify emerging trends.

How to use: Tokens with consistently high TVI often experience significant price movements in the near future.

Using Indicators Together

For the most effective analysis, combine multiple indicators:

Confirmation Strategy: Use multiple volume indicators to confirm signals before making trading decisions.
Divergence Analysis: Look for situations where different indicators provide conflicting signals, which may indicate complex market conditions.
Multi-Timeframe Analysis: Apply indicators across different timeframes to identify both short-term and long-term trends.
Indicator Combinations: Create custom indicator combinations that work for your specific trading strategy.

Indicator Settings and Customization

DexVolume allows you to customize indicator parameters:

Timeframe Adjustment: Modify the periods used in calculations to match your trading horizon.
Visualization Options: Change how indicators are displayed (line, histogram, heatmap, etc.).
Alert Configuration: Set up notifications for when indicators reach specific thresholds.
Saved Presets: Create and save custom indicator configurations for quick access.

Understanding Trading Indicators