TraderStoa's first study is finally out, and it's PVDN, the Price Volume Dynamics Navigator. It's the volume study I wished thinkorswim came with, so I built it. This study alone is what helps me makes majority of entry and exit trades.
If you trade intraday, you've probably stared at the volume panel and asked the same thing I did for years: okay, that's a big bar, but who was behind it? Buyers? Sellers? Or just a lot of shares changing hands with nobody really winning? Standard volume can't answer that. PVDN can, bar by bar, right on your chart.
So what is PVDN?
PVDN is a lower-panel volume study for thinkorswim. Here's the short version of what it does on every bar:
- Splits the volume into buying and selling. It looks at where the bar closed in its range. Close at the high, that's buyers. Close at the low, that's sellers. Somewhere in the middle, it's split.
- Scores the bar from −100 to +100. The Volume Score blends four things: buy/sell pressure, how fast price moved (in ATR), how efficiently it moved for the volume spent, and how much conviction the volume had versus its average.
- Gives the bar a rating. Seven tiers, from Strong Sell through Neutral to Strong Buy.
- Colors your chart. That rating paints both the volume histogram and your price candles, so you can read volume conviction without even looking down at the lower panel.
The part I'm proudest of: every rating has to be earned twice, once by the score and once by the volume. A Strong rating needs a strong score and at least 100% of average volume. So that pretty candle on thin volume? It doesn't get to call itself Strong. And bars where neither side clearly won (60/40 by default) just fade to grey. What's left on your chart are the bars where somebody actually took control.
Why it's actually useful
I use PVDN every day on my charts, and it earns its spot because it answers the question I care about before I commit to a trade: is there real participation behind this move, or is it a head fake?
A few ways it shows up in practice:
- Confirming entries. Price pokes through a level and you want to go with it. If PVDN is painting Normal or Strong in your direction, there's volume behind it. If it's grey, I'm a lot more careful.
- Filtering breakouts. Breakouts with participation tend to look very different from thin-volume breaks that fail. PVDN makes that difference obvious at a glance.
- Rejoining a trend. After a quiet pullback, a Strong bar on the trend side is a good sign the trend crowd is back in control.
- Spotting climaxes and absorption. On hourly and daily charts, it helps you see big volume that went nowhere, or conviction that's starting to fade.
You also get trigger arrows and alerts at whatever rating you choose, plus a gold "Extreme" bubble for the rare bar that's Strong, on 150%+ volume, and at least 1.5× ATR wide. Those don't show up often, and when they do, I pay attention.
One more thing traders always ask me about: "Can I change the study an tailor it to my use?" Of course you can! There are 19 input broken down to standard and advance this allows you to customize the study as you see fit. However, note that the default settings should suffice majority of trading setup. If you want to go to the nitty gritty details, then you can always change the code.
PVDN vs. the standard Volume study
The built-in thinkorswim Volume study tells you how much traded. That's it. Everything else, like who won the bar and whether it mattered, you have to figure out by eye. PVDN does that work for you.
|
Feature |
Standard Volume |
PVDN |
|---|---|---|
|
Volume bars |
Yes |
Yes, colored by Volume Rating |
|
Buy vs. sell split |
No |
Yes, on every bar |
|
Volume vs. average |
Read it by eye |
Automatic % of the 20-bar average |
|
Directional score |
No |
−100 to +100 Volume Score |
|
Strength rating |
No |
7-tier Volume Rating |
|
Volume required per rating |
No |
Yes, every tier has a volume floor |
|
Filters balanced bars |
No |
Yes, they paint grey |
|
Colors your price candles |
No |
Yes |
|
Trigger arrows and alerts |
No |
Yes |
|
Extreme-bar highlight |
No |
Yes, scaled by ATR |
I'm not knocking the original. It's what most of us learned on, and raw volume is still the foundation PVDN is built on. PVDN just takes the next step even further.
This is just the start
PVDN is the first study out the door study from TraderStoa, but it won't be the last. I've been building and trading with a whole set of studies on my own charts, covering volume profiles, anchored VWAP, squeezes, options risk and more. The goal is to polish them and release them here one by one, hopefully soon.
Each one gets the same treatment PVDN did: tested for multiple days, cleaned up, and shipped with a full user guide so you're not left guessing.
If you pick up PVDN, I'd love to hear how you're using it and what you'd want to see next. Share your feedback via our email at contact@traderstoa.com
In closing, I wish you all the best in your trading days.
Trade well and live well!
Paul
founder of TraderStoa
P.S. PVDN as you can see also stands as the acronym for my full name. I know it's cheesy but hey, why not?
PVDN is a custom ThinkScript study for the thinkorswim® platform by Charles Schwab. TraderStoa is not affiliated with Charles Schwab. Trading involves risk; use any study at your own discretion.