VPRS - Volume, Position, Range, Signal

Discussion in 'Technical Analysis' started by janderson99, Aug 10, 2011.

  1. I have been working on a new indicator that can be used as a Stock Screener.

    VPRS - Combines Volume and Bar Chart Signals into an Index.

    The indicator uses the following components.

    => The absolute rate of change of volume as a percentage
    => The relative position of the close on the True Range as a percentage
    => The absolute rate of change of the True Range as a percentage

    The three percentages are simply added and divided by 300 to give a VPRS score as a percentage. It is smoothed using a 3-day average.

    Example 1 - The example shows a stock that has been steady for 5 days with only small changes in the price range and the close price is towards the low price for the day. Prices have been falling. The VPRS is moderately low and trends downward with the decline in closing price. (A)

    The stock then enters a buying phase, with a trough (1) and a rise in the VPRS marked by closing prices being close to the high for the day. Volume increases as the price rises and there are major changes in the daily range, which doubles twice in successive days (B). The price rise continues but the VPRS declines because the volume remains steady and there is little change in the price range. A second trough and rise in VPRS (2) is triggered by the volume change, the variability in the price range and the closing price being close to the high for the day.

    The trough labelled '1' can be used as potential 'BUY' signal for screening stock. The open and closed 'dot' on the graph are the symbols for the Parabolic SAR index. It is significant that the VPRS trough (1) occurs much earlier in the price surge than the change in the Parabolic SAR.
  2. Image 1
  3. Example 3 - Shown is a 3-month Daily Chart for NCM for the Australian Market. Only the second of the four trough signals was false and the other three proceeded significant price rises. Trough 2 was clearly recognised as false as the price trend was downward. The trough signal should be confirmed as indicating a price surge before buying the stock.