Overview

The Order Flow Volume Spike indicator is a professional-grade tool that combines volume anomaly detection with order flow pressure analysis. While most retail indicators rely solely on price action, this indicator goes deeper by examining the relationship between volume intensity, candle body momentum, and order flow ratios to identify moments when large players are entering the market.

This indicator is designed for traders who understand that volume precedes price. By detecting volume spikes (2x or more above average) and analyzing the directional pressure behind those spikes, it pinpoints high-probability entries where institutional-level capital is driving the move.

Order Flow Volume Spike is a premium indicator, available exclusively to Volensy members with an active subscription.

How It Works

The indicator runs four parallel analysis layers and only generates a signal when all conditions align. This multi-filter approach dramatically reduces false signals compared to standalone volume indicators.

Layer 1: Volume Spike Detection

The indicator calculates a rolling average volume over a configurable period (default: 20 candles). When the current candle’s volume exceeds 2x (200%) of this average, a volume spike is flagged. This threshold ensures you are only alerted to truly anomalous volume events, not normal fluctuations.

Layer 2: Order Flow Pressure Ratio

Beyond raw volume, the indicator estimates order flow pressure by analyzing the balance between buying and selling activity within each candle. This is calculated using the relationship between the candle’s close relative to its high-low range, weighted by volume:

• A candle that closes near its high with elevated volume suggests strong buying pressure.
• A candle that closes near its low with elevated volume suggests strong selling pressure.

The resulting pressure ratio helps determine whether the volume spike is bullish or bearish in nature.

Layer 3: Candle Body Momentum Analysis

The indicator measures the candle body size relative to its total range (high minus low). A large body relative to the wick indicates decisive directional movement, while a small body with long wicks suggests indecision. Only candles with strong body momentum contribute to signal generation.

Layer 4: EMA(20) + VWAP Filtering

Finally, the signal must align with the prevailing short-term trend as defined by the EMA(20) and the Volume Weighted Average Price (VWAP):

• LONG signals require price to be above both the EMA(20) and VWAP, confirming bullish alignment.
• SHORT signals require price to be below both the EMA(20) and VWAP, confirming bearish alignment.

Signal Output

When all four layers confirm simultaneously, a LONG or SHORT signal fires with the standard Volensy TP/SL system:

• TP1 — 0.5% from entry
• TP2 — 1.0% from entry
• TP3 — 1.5% from entry
• Stop Loss — 2.0% from entry

Key Features

• Volume spike detection — Identifies candles with 2x or more above average volume, flagging anomalous activity.
• Order flow pressure analysis — Estimates buying vs. selling pressure within each volume spike to determine directional intent.
• Candle body momentum — Filters for decisive candle bodies, eliminating indecision candles with large wicks.
• EMA(20) + VWAP filtering — Ensures signals align with the short-term trend and volume-weighted price level.
• Real-time info panel — Displays entry price, PnL, success rate, trade duration, and current signal status.
• Multi-level TP/SL — Three take profit targets and a fixed stop loss on every trade.
• Bar coloring — Candlesticks are colored to reflect the active signal direction.
• Configurable alert system — Alerts for volume spikes, LONG entries, SHORT entries, TP hits, and SL triggers.

Configuration / Settings

| Parameter | Default | Description |
|———–|———|————-|
| Volume Average Period | 20 | Number of candles used to calculate the rolling average volume. |
| Volume Spike Multiplier | 2.0 | Minimum multiple of average volume required to flag a spike (2.0 = 200% of average). |
| EMA Length | 20 | Period for the Exponential Moving Average trend filter. |
| Use VWAP Filter | On | Toggle the VWAP alignment requirement. Disabling this allows signals without VWAP confirmation. |
| Min Body Ratio | 0.5 | Minimum ratio of candle body to total range (0.5 means the body must be at least 50% of the candle’s total size). |
| TP1 Level | 0.5% | First take profit target. |
| TP2 Level | 1.0% | Second take profit target. |
| TP3 Level | 1.5% | Third take profit target. |
| Stop Loss | 2.0% | Maximum loss threshold. |
| Show Info Panel | On | Toggle the floating stats panel. |
| Show Bar Colors | On | Toggle candlestick coloring. |
| Show Volume Spikes | On | Toggle highlighting of volume spike candles on the chart. |

Trading Signals

LONG Signal

A green LONG label appears when:

• Current candle volume is 2x or more above the rolling average.
• Order flow pressure ratio indicates dominant buying activity.
• Candle body is large relative to wicks (decisive bullish movement).
• Price is above both EMA(20) and VWAP.

This signal indicates that a significant amount of capital has entered on the buy side, with short-term trend confirmation supporting further upside.

SHORT Signal

A red SHORT label appears when:

• Current candle volume is 2x or more above the rolling average.
• Order flow pressure ratio indicates dominant selling activity.
• Candle body is large relative to wicks (decisive bearish movement).
• Price is below both EMA(20) and VWAP.

This signal indicates heavy selling pressure backed by short-term bearish trend alignment.

Signal Resolution

Each signal remains active until a TP level is hit, the SL triggers, or a new opposing signal replaces it. The info panel tracks all completed trades and updates the cumulative success rate.

Best Practices

Recommended Markets

• Crypto — BTC/USDT, ETH/USDT, and high-volume altcoins. Crypto markets are particularly suited to volume analysis due to their 24/7 liquidity and frequent whale-driven volume spikes.
• Stocks — Individual equities with high daily volume (above 1M shares). Earnings releases and news events often trigger the volume spikes this indicator detects.
• Forex — Major pairs during London and New York sessions when volume is highest. Avoid Asian session on major pairs where volume tends to be thinner.
• Commodities — Gold (XAU/USD) and crude oil (WTI) during active market hours.

Recommended Timeframes

• 5-minute — For scalping high-frequency volume spikes on liquid assets.
• 15-minute — Best all-around timeframe balancing signal quality and frequency.
• 1-hour — For more patient entries with stronger volume confirmation.

Tips

1. Watch for cluster signals — Multiple volume spikes in the same direction within a short period often indicate a sustained institutional move. These clusters tend to produce the strongest trends.
2. Use with market context — Volume spikes during breakouts from consolidation ranges are far more significant than spikes within a range. Check if price is near a key support or resistance level.
3. Monitor the pressure ratio — If the volume spike is large but the pressure ratio is near neutral (50/50 buying vs. selling), the signal is weaker. The most reliable signals come with heavily skewed pressure ratios.
4. Session awareness — Volume patterns differ by session. London open and New York open typically produce the cleanest volume spike signals.

Related Documentation

*See also: Indicators Overview*
*See also: Understanding the TP/SL System*
*See also: Using the Info Panel*
*See also: Momentum ATR Filter* — Another premium tool that uses volume confirmation alongside momentum and ATR analysis.
*See also: Indicator Comparison Guide*