Overview
Volume Ratio calculates the normalized difference between buy and sell volume for each bar:
Volume Ratio = (buyVolume - sellVolume) / (buyVolume + sellVolume)
How It Works
Unlike raw delta which can vary wildly in magnitude, Volume Ratio normalizes the buy/sell imbalance into a fixed range. This lets you:
- Compare directional pressure across assets with very different volumes
- Spot extreme imbalances without needing to know typical volume levels
- Use fixed thresholds that work consistently across symbols
A reading of 0 means perfectly balanced buying and selling. Values above +0.3 indicate meaningful buy dominance; below -0.3 indicates sell dominance.
Interpretation
| Range | Meaning |
|---|
| +0.7 to +1.0 | Extreme buy dominance — strong bullish pressure |
| +0.3 to +0.7 | Moderate buy dominance |
| -0.3 to +0.3 | Balanced / neutral zone |
| -0.7 to -0.3 | Moderate sell dominance |
| -1.0 to -0.7 | Extreme sell dominance — strong bearish pressure |
Sustained extreme readings (above +0.5 or below -0.5) over multiple bars signal strong directional pressure and often precede continuation moves.
Settings
| Parameter | Description | Default |
|---|
positiveColor | Color for positive (buy-dominant) bars | #22c55e |
negativeColor | Color for negative (sell-dominant) bars | #ef4444 |
displayMode | Visualization style: line, columns, or candles | columns |
highlightAnomalies | Highlight statistically unusual readings | true |
anomalyThreshold | Standard deviations for anomaly detection | 2.5 |
anomalyPeriod | Lookback period for anomaly calculation | 30 |
gradientIntensity | Scale bar opacity by value magnitude | true |
Display Modes
- Columns — Default histogram view. Bar height and color show direction and magnitude.
- Line — Continuous line plot. Useful for spotting trends in the ratio over time.
- Candles — OHLC-style rendering of the ratio values within each bar.
Anomaly Detection
When highlightAnomalies is enabled, bars where the Volume Ratio deviates more than anomalyThreshold standard deviations from the rolling mean (over anomalyPeriod bars) are visually highlighted. These anomalies often correspond to:
- News-driven spikes
- Large institutional orders
- Liquidation cascades
Gradient Intensity
When gradientIntensity is enabled, bar opacity scales with the absolute value of the ratio. Bars near zero appear faded, while extreme readings appear at full opacity — drawing your eye to the most significant imbalances.
Volume Ratio uses market order data (taker buys vs taker sells). It does not account for limit order activity visible in the order book.
Practical Examples
Trend Confirmation: During an uptrend, Volume Ratio consistently above +0.3 confirms genuine buying pressure behind the move.
Divergence: Price making new highs while Volume Ratio trends lower suggests weakening buy conviction — a potential reversal signal.
Range Trading: In a sideways market, Volume Ratio oscillating tightly around zero confirms the lack of directional conviction.