The Bid/Ask is designed to show the net number of contracts that traded on the bid or ask price during the development of each bar/candle during trading. This indicator will work on a time, tick or volume based chart but we believe that it is most effective if used on a volume based chart for the market that you are tracking.
The objective of this study is to let you know if more sellers are hitting the bid or more buyers are hitting the ask (offer) price and by doing so gives you a heads up as to where the pressure is coming from.
If used on a volume based chart then you are always comparing like with like when comparing the number of contracts traded at bid/ask from bar to bar. If you use a tick or time based chart then you will always have a different number of contracts traded each bar/candle because tick and time based charts do not have equal contract traded on each bar/candle.
This study shows the net number of contracts traded on the ask. If more contracts traded on the bid than the ask then this number will be negative. The example results table below shows what this indicator will plot on a 3000 contract per bar volume chart:
|Result||Contracts traded at Ask||Contracts traded at Bid|
The Bid/Ask indicator has 6 parameters. The chart above was created with the default parameter settings that you see here.
|CutOff||The number of contracts at which to switch from normal color to alert.|
|AskColor/BidColor||Standard color for the bar if it is not over/under the CutOff value.|
|AskColorAlert/BidColorAlert||If the net Asks traded is higher than the CutOff or lower than the negative value of the CutOff then the appropriate alert color is used.|
|BarThick||Thickness of the bars to draw.|
Tips and Tricks
- Use on a volume based charts for best results.
All the indicators mentioned here are available to Premium Members.
Other indicators in this Pack/Series: