What Are Volumetric Bars?
As part of NinjaTrader’s Order Flow + suite of premium tools, volumetric bars provide an X-ray view into the market auction process, revealing whether buyers or sellers were more aggressive at each price level.
This tick-by-tick visualization can help traders detect order flow imbalance and identify potential trade opportunities in real-time.
See how to create a Volumetric chart in this 2-minute video:
How Do Volumetric Bars Work?
Volumetric bars identify and indicate aggressive buying and selling behavior. First calculating the delta, or difference between buying and selling volume, volumetric bars then print this information adjacent to price candles. With this information displayed in an easy-to-find location, order flow traders can quickly gauge whether buyers or sellers are more aggressive at each price level.
Although not an indicator, volumetric bars, provide additional insight into the order flow by differentiating the buying vs selling activity within each price bar. Traders can then identify the aggressive buyers & sellers in the market as well as the price levels where aggressive buying & selling took place.
Consider each price candle an auction for a specified set of time. Volumetric bars provide a detailed visual breakdown of the transactions that took place including who won or lost the auction.
In the chart above, volumetric bars are displayed for Crude Oil futures (CL) on a 5-minute timeframe. After aggressive selling behavior was detected, price saw a move to the downside. Next, after aggressive buying was identified, price changed course and moved upward.
Analyzing Volumetric Bars
Volumetric bars tell a story of what happened during a specific time frame. While it may seem like a complex visual display, the color shading serves as a filter for your eyes to help identify the most significant price and volume levels.
By design, volumetric bars are shaded based on the difference, or delta, in how much trading occurred at the ask price (aggressive buying) versus the bid price (aggressive selling). The higher the delta, the more apparent the shading will be within each cell. As a result, your eyes are drawn to the most significant areas of the chart in terms of order flow: where the most aggressive action took place.
As with all technical analysis tools, the way Volumetric bars are utilized will vary based on the individual trader and analysis approach. NinjaTrader’s Order Flow + Volumetric bars can be customized to suit any number of timeframes and trading methodologies.
Interactive Training Resources
NinjaTrader is designed to be used by all levels of traders from novice to expert. Workspaces, charts, templates, watch lists, and more can be customized to your trading style and approach. Our User Video Guides provide quick tutorials and tips to help you get up and running.
For more in-depth training and videos, check out the NinjaTrader 8 Help Guide. The Help Guide can also be accessed through the NinjaTrader platform by pressing F1 on your keyboard. This action triggers the Help Guide pertaining to the last window used in NinjaTrader.
The NinjaTrader User Forum is also a great resource to collaborate with a community of NinjaTrader enthusiasts, programmers and our support team.
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