When "Baseline Chart" option is disabled, it looks similar to regular . The bars has two shades of green and red. The dark shade shows amount of accumulation and the light shade shows total (what you see on a regular indicator). Blue line is the moving average (or cumulative total) of A/D and the gray line is for total .
When money is enabled, it multiplied by price. As you can see in the chart below, trade in terms of USD was declining after ATH . This is not the case in regular chart which shows instrument (chart above).
In Baseline view, the aggregation method you choose can turn it into different indicators. With EMA/SMA aggregation, blue and gray line shows buy/sell pressure. At 0, there is not buy or sell pressure.
If you turn off bars (from style menu), it gives you a reliable indicator to measure divergence. This should be more reliable than most other range-bound indicators (i.e. , , CMF ). I will publish a TA about correctly measuring divergence (it's a must read even if you are a pro trader). Make sure that the length is set to a large number on smaller TFs such as 4h.
For following results, set aggregation to cumulative and turn off money volume:
When wick weight=0, the GRAY line is identical to OBV indicator.
When normalized by spread and wick weight=10, the BLUE line is identical to ADL (improved by true range).
When normalized by previous bar price, wick weight=0, the BLUE line is identical to PVT.
How I use this indicator:
- Baseline chart, replaced my regular indicator
- Mostly 4h TF for divergence
- aggregation (and occasional cumulative aggregation) with length above 50. I change the length to 100 and 200 for confirmation.
- Wick weight=0 or max 2.
With this indicator, you can learn how different indicators are built and how they are different from each other. I will publish a TA to explain more about different indicators and their pros and cons.
I will publish this indicator without bars and additional options to make it range bound.
- changed the default chart mode