Trading Volume Index (TVI)
The Trading Volume Index (TVI) is a volume-based indicator designed to detect real buying and selling pressure during active market conditions. It focuses on price and volume movement together, helping traders spot accumulation, distribution, and momentum shifts — especially during periods of high volatility.
Unlike traditional volume indicators that simply measure raw volume or volume direction, the TVI analyzes whether price is moving up or down with actual strength behind it, even when candles are choppy.
How the TVI Works
The TVI uses both tick-by-tick data and price movement direction to assess whether volume is contributing to upward or downward pressure. Since TVI is typically used on intraday charts, it’s especially helpful for fast-moving markets like forex, crypto, and stocks.
Here’s the basic logic:
When price ticks upward and volume is strong, TVI rises
When price ticks downward with volume, TVI falls
If price movement is small or inconsistent, TVI stays relatively flat
The result is a line that builds directionally over time, showing consistent bullish or bearish strength — even before price visibly breaks out.
| TVI Direction | Interpretation |
|---|---|
| Rising steadily | Strong buying pressure (accumulation) |
| Falling steadily | Strong selling pressure (distribution) |
| Flat or choppy | Unclear momentum, possible indecision |
How Traders Use It
The Trading Volume Index is most useful for identifying hidden buying or selling, particularly when price action looks indecisive or manipulated. It’s also used for:
Breakout confirmation
If TVI starts rising before a resistance level breaks, that’s a bullish cue.
Divergence spotting
If price makes new highs but TVI flattens or drops, momentum may be weakening.
Volume validation
TVI helps filter whether volume spikes are meaningful or just noise.
Example Setup
Let’s say you’re watching a crypto asset bounce between support and resistance. Price looks indecisive with small candles. Suddenly, TVI starts climbing — even though price hasn’t broken out yet.
That’s your signal.
Volume is backing the bulls, and the breakout is likely. A few candles later, price surges through resistance, and you’re already in position. The early TVI rise gave you the edge before the chart confirmed it.
Pros and Cons of Using TVI
Pros
Tracks volume-backed price movement in real time
Great for spotting hidden accumulation or distribution
Useful during choppy or manipulated markets
Works well on short timeframes
Cons
Not available on all platforms (often custom coded)
Less effective on longer timeframes
Can be noisy without proper filters
When to Use the Trading Volume Index
The TVI is best used when you want to see through the noise and confirm whether volume is actually driving a move. It’s ideal for intraday setups, breakout trading, or confirming strength when price is flat but interest is growing.
If you’re trying to detect the real intent behind the candles, the Trading Volume Index helps expose what the market is really doing beneath the surface. Next we are moving to Proprietary Indicators. First up the TTM Squeeze