V-Chart
V-Chart: Revolutionizing Chart Analysis for Traders
Introduction
Welcome to VChart, a groundbreaking charting tool that challenges the traditional candlestick chart and introduces a new perspective for traders. Developed with the goal of providing valuable information to enhance trading decisions, VChart leverages volume data to present a unique charting experience.
The Limitations of Candlestick Charts
Candlestick charts, the most widely used chart type, have been in existence since the 1800s. However, many traders find themselves losing money despite relying on these charts. Is it just a coincidence? Not at all. The issue lies in their inability to offer traders the insights they need to make informed trades.
Consider the following statements:
After 1 hour, the price moves up by 5%.
After 100 BTC is traded, the price moves up by 5%.
Time alone does not cause price movements; it is people making trades that drive prices. Therefore, the second statement provides more valuable information. This realization has paved the way for a new charting tool: the Volume chart.
Introducing the Volume Chart
The Volume chart, unlike the traditional candlestick chart, revolves around traded volume. Instead of completing a bar after a specific duration, a bar is completed after a certain volume, as indicated by "V = 77" (where 77 BTC is traded). This unique approach is designed with scalp/breakout/liquidation hunting strategies in mind.
How to Read the Volume Chart
To facilitate your understanding, here are some annotations:
"V = 77" indicates that a bar is completed after 77 BTC is traded.
The color of the wick reflects the dominance of either buy or sell trades within a bar. A red wick suggests more sell trades, while a green wick indicates more buy trades.
The width of a bar represents its momentum. A thin bar suggests a quick price movement, while a thick bar signifies a slower pace. Bar width is calculated using z-scores of bar duration.
The body of the bar displays the traded volume by sellers (red) and buyers (green), making it easy to spot imbalances and the exchange of positions between sellers and buyers.
The bar body also includes two lines representing the VWAP (Volume Weighted Average Price) sell level in red and VWAP buy level in green.
Liquidation indicators are positioned at the top and bottom of each bar. Red boxes indicate sell-side liquidations (long liquidations), while green boxes represent buy-side liquidations (short liquidations).
Historical Liquidation Levels
Data from Coinglass (formerly known as Bybt) provides historical liquidation levels, offering valuable insights for traders.
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