Volume Price Confirmation Indicator (VPCI)

I have been looking for volume indicators that help me to identify the right minimum volumes to place long position, but by the moment I was not success.

This time I found this VPCI in tradingview, so let’s see how it works. The notes are very interesting basis of knowledge.

Volume Price Confirmation Indicator (VPCI)

Developed by Buff Dormeier, VPCI won 2007 Charles H Dow award by the MTA. VPCI plots the relationship between price trend and the volume , as either being in a state of confirmation or contradiction.

Fundamentally, the VPCI reveals the proportional imbalances between price trends and volume-adjusted price trends.

  • An uptrend with increasing volume is a market characterized by greed supported by the fuel needed to grow.
  • An uptrend without volume is complacent and reveals greed deprived of the fuel needed to sustain itself.

Investors without the influx of other investors ( volume ) will eventually lose interest and the uptrend should eventually breakdown.

A falling price trend reveals a market driven by fear.

  • A falling price trend without volume reveals apathy, fear without increasing energy. Unlike greed, fear is self-sustaining, and may endure for long time periods without
    increasing fuel or energy. Adding energy to fear can be likened to adding fuel to a fire and is generally bearish until the VPCI reverses. In such cases, weak-minded investor’s, overcome by fear, are becoming irrationally fearful until the selling climax reaches a state of maximum homogeneity. At this point, ownership held by weak investor’s has been purged, producing a type of heat death capitulation. These occurrences may be visualized by the VPCI falling below the lower standard deviation of a Bollinger Band of the VPCI, and then rising above the
    lower band, and forming a ‘V’ bottom.

The code

// @author LazyBear
// If you use this code in its orignal/modified form, do drop me a note.
study(“Volume Price Confirmation Indicator [LazyBear]”, shorttitle=”VPCI_LB”)

vpc = vwma(src, longTerm) – sma(src, longTerm)
vpr = vwma(src, shortTerm)/sma(src, shortTerm)
vm = sma(volume, shortTerm)/sma(volume, longTerm)

vpci = vpc*vpr*vm
plot(vpci, color=orange, linewidth=2)

DrawMA = input(true, type=bool, title=”Draw MA on VPCI?”)
lengthMA=input(8, “VPCI MA Length”)
s=sma(vpci, lengthMA)
plot(DrawMA?s:na, color=teal)

// Uncomment this line to enable histogram
// plot(DrawMA?(vpci-s):na, color=blue, style=histogram)

DrawBands = input(false, type=bool)
HighlightBreaches = input(true, type=bool)
length=input(20, title=”BB Length”)
bb_s = vpci
basis = sma(bb_s, length)
dev = (mult * stdev(bb_s, length))
upper = (basis + dev)
lower = (basis – dev)

plot(DrawBands?basis:na, color=gray, style=line)
p1 = plot(DrawBands?upper:na, color=gray)
p2 = plot(DrawBands?lower:na , color=gray)
fill(p1, p2, blue)

b_color = (bb_s > upper) ? red : (bb_s < lower) ? green : na
offs_v = 0.3
breach_pos = (bb_s >= upper) ? (bb_s+offs_v) : (bb_s <= lower ? (bb_s – offs_v) : 0)
Breached=(bb_s >= upper) or (bb_s <= lower)
plot(HighlightBreaches and Breached ? breach_pos : na, style=cross, color=b_color,linewidth=3)

Etherium ecosystem

Simon Wardley says related to maps: practice, practice, practice… so here there is a practice.

The map

Development environment

  • Solidity : is quite mature and the community of developers is increasing, there are so many places where you can learn how to develop in solidity, and the documentation is quite good. There are other languages but not as popular as solidity: Serpent, Mutan, LLL.
  • Certification programs: for developers and for the applications itself. This is a natural step that will happen sometime.
  • B2C Vs B2B: right now the majority of applications are B2C, but I’m sure that in the future some B2B solutions will show up. B2B solutions are more difficult to identify as they are not always advertized publicly, right now the Pioneer CIOs are the main consumers that should be looking at them (settlers and town planners are still not interested on blockchain).
  • Official DApp store : this is something that will have to happen in the future. Right now there are some places publishing lists of available distributed applications, but there are not quality checks and there are not enough volume of users using them and rating them.
  • The API: the ability to interconnect with different environments is key, specially to promote the partnership between DApps that benefit to the end user, and hence enrich the ecosystem.
  • Waste of energy: this is a constrain provoked by Proof of work (POW) method. At some time this should be reviewed. Ethereum is trying to move towards proof of stake in it’s next release Casper.
  • Hyperledger: competition is a healthy fact, and a way to compare the evolution. We cannot compare apples with apples, but there are common components where you can determine some comparisons.
  • Ability to run private transactions : right now this is not possible, you can set the transactions as visible or private for all users, but not for restricted users or roles.
  • Reward for each block: the fact that there is a reward for each completed block makes the community to increase, this is an accelerator to me.

Etherium Vs Hyperledger

They are a different thing that will meet in some future.The main differences can be read here.

  • Etherium      = B2C, POW,                   , built in cryptocurrency…
  • Hyperledger = B2B, No-op and PBFT , no cryptocurrency required…

Remember the basic nomenclature of the maps Any suggestion to improve the map?