The Price Volume Trend (PVT) indicator is a momentum-based indicator used to measure the money flow in and out of a security by incorporating both price and volume information. It helps in identifying the strength of price trends and potential reversals.

Syntax:

PVT(price)

Calculation:

The PVT is calculated by taking the percentage change in the closing price from the previous day and multiplying it by the volume of the current day. This product is then added to the previous day’s PVT value.


percentChange = (close - previousClose) / previousClose
PVT = percentChange * volume + previousPVT


Additional Information:

• The PVT indicator is useful for identifying trends where price and volume confirm each other.
• A rising PVT suggests bullish trends, while a falling PVT can indicate bearish trends.
• Divergences between the PVT and the price can signal potential reversals. For example, if the price hits new highs but the PVT does not, it may suggest a weakening trend.

This indicator does not predict price direction but rather the strength of price movements in conjunction with volume, which can be a valuable tool for confirming other technical analysis findings.