Volume Oscillator (Volume Osc) - Built-in Indicator Guide

Computes the percentage difference between short and long exponential moving averages of volume.

Overview

The Volume Oscillator measures the difference between two exponential moving averages (EMAs) of volume, expressed as a percentage of the longer EMA. It is designed to highlight changes in volume momentum, helping traders identify periods where short-term volume is accelerating or decelerating relative to the longer-term average.

On the chart, the indicator is drawn as a blue line that oscillates around a zero level (gray line). When the line is above zero, short-term volume is higher than the long-term average; when below zero, short-term volume is lower. This can signal shifts in market participation or interest.

How it works

1. Compute the short-term EMA of volume using the short_len period.
2. Compute the long-term EMA of volume using the long_len period.
3. Subtract the long EMA from the short EMA.
4. Divide the difference by the long EMA to normalize the value.
5. Multiply the result by 100 to express it as a percentage.
6. Return the computed value for the current bar; the platform plots it as a line.

Mathematical model

Parameters

Code walkthrough

Indicator Decorators and Settings

Lines 7-11 of Volume Oscillator.indie5:

@indicator('Volume Osc', format=format.PRICE)  # Volume Oscillator  # TODO: format=format.PERCENT
@param.int('short_len', default=5, min=1, title='Short Length')
@param.int('long_len', default=10, min=1, title='Long Length')
@level(0, line_color=color.GRAY, title='Zero')
@plot.line(color=color.BLUE, title='VO')

The @indicator decorator sets the display name to ‘Volume Osc’ and the format to PRICE (though a comment suggests PERCENT may be more appropriate). Two integer parameters short_len and long_len are defined with defaults 5 and 10, each with a minimum of 1. A zero level is added with a gray line, and the plot is configured as a blue line labeled ‘VO’.

Main Function and Computation

Lines 12-15 of Volume Oscillator.indie5:

def Main(self, short_len, long_len):
    short = Ema.new(self.volume, short_len)[0]
    long = Ema.new(self.volume, long_len)[0]
    return 100 * divide(short - long, long)

The Main function receives the two parameters. It computes the short and long EMAs of self.volume using Ema.new, which returns a series; indexing with [0] retrieves the current bar’s value. The final return value is 100 * divide(short - long, long). The divide function from indie.math safely handles division by zero (returns NaN).

Reading the chart

• Blue line: The Volume Oscillator value for each bar.
• Zero line (gray): Reference level; values above zero indicate short-term volume above the long-term average, values below indicate short-term volume below the long-term average.
• Positive values: Suggest increasing volume momentum (short-term volume is accelerating).
• Negative values: Suggest decreasing volume momentum (short-term volume is decelerating).

Implementation notes

• Uses Ema.new which returns a series; [0] accesses the current bar’s EMA value.
• The divide function from indie.math returns NaN when the denominator is zero, preventing division errors.
• The indicator does not repaint because it only uses current bar data (no lookahead).
• The format=format.PRICE is used, but a comment suggests format.PERCENT might be more appropriate since the output is a percentage.

FAQ

How should I interpret the Volume Oscillator?

Positive values indicate that short-term volume is higher than the long-term average, suggesting increasing volume momentum. Negative values indicate the opposite. Crossings of the zero line can signal shifts in market participation.

What are typical settings for short_len and long_len?

The defaults are 5 and 10, but you can adjust them based on your trading style. Shorter periods make the oscillator more sensitive, longer periods smooth out noise.

Does the Volume Oscillator repaint?

No, it does not repaint. The computation uses only the current bar’s volume and the EMAs are updated in real time without referencing future data.

Full source code

Indie Script v5, the built-in indicator as shipped with TakeProfit. Add it from the indicators menu or copy the code into the platform’s script editor.

# indie:lang_version = 5
from indie import indicator, format, param, level, color, plot
from indie.algorithms import Ema
from indie.math import divide


@indicator('Volume Osc', format=format.PRICE)  # Volume Oscillator  # TODO: format=format.PERCENT
@param.int('short_len', default=5, min=1, title='Short Length')
@param.int('long_len', default=10, min=1, title='Long Length')
@level(0, line_color=color.GRAY, title='Zero')
@plot.line(color=color.BLUE, title='VO')
def Main(self, short_len, long_len):
    short = Ema.new(self.volume, short_len)[0]
    long = Ema.new(self.volume, long_len)[0]
    return 100 * divide(short - long, long)