Combine Price & Volume with New Equivolume Charts
NinjaTrader’s award-winning trading charts include 100+ out-of-the-box indicators as well as multiple bar types and chart styles to help analyze futures, forex, stocks, & CFDs.
With the new Equivolume chart style for NinjaTrader 8, traders can easily see which bars received the most relative volume simply by comparing their widths.
Why Are Equivolume Charts Unique?
Equivolume charts are simple in their design. Each candlestick represents the open, high, low and close of the time interval specified, and the width of the bar shows the period’s relative volume compared to other bars. The wider the bar, the greater the volume.
Above is a 5-minute Equivolume chart of Micro E-mini Nasdaq Futures (MNQ). A volume indicator is in the lower panel to provide a better understanding of how Equivolume charts work. You can see clearly which price bars received more volume relative to the surrounding bars.
Advantage of Equivolume Charts
With Equivolume charts, a volume indicator is no longer required to see relative volume. You can quickly view both price and relative volume information for each specified interval, effectively killing two birds with one stone.
Additionally, classic technical analysis chart patterns such as cup and handle, wedges, double tops and head and shoulders are still visible, but with volume built directly into the patterns. This makes it much easier for traders to confirm patterns with increased volume to help verify a trade thesis.
In general, wide bars are considered more significant than thin bars since high volume is normally present during significant price moves. Price breakouts or other moves are commonly accompanied by relatively higher trading volume. Viewing a combination of interesting price action and wider-than-average bars can signal a trader to take action.
In the Micro E-mini S&P 500 (MES) futures chart above, the wide green bar prior to the breakout above the 200-day SMA helps confirm a bullish thesis.
Similar to other indicators and chart styles, Equivolume charts are subject to false signals and proper risk management including protective stops are paramount in unpredictable markets.
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