Description: Klein Wave Volume indicator is used to determine supply and demand in the form of waves. This indicator is based off Wyckoff method. If you've studied under the late great David Weis, Dr. Gary Dayton or Gary Fullett, you'll probably want to have this indicator in your tool box.
It helps to identify:
1) No Supply
2) No Demand
3) Change of Behavior (COB)
4) Large Effort No Reward
No Supply: If there are 3 down waves (5 Swings) with shortening of thrust in the 3rd Wave (5th Swing) and reduced wave volume it indicates supply is withdrawn from the Market.
No Demand: If there are 3 up waves (5 Swings with shortening of thrust (SOT) in the 3rd Wave (5th swing), and reduced wave volume, it indicates demand is reduced.
COB (Change of Behavior): After continuous down or up wave, if you see large wave against the current trend (HH or LL) it indicates COB and Market is changing its trend or direction.
Large Effort No Reward:
* If there is a large Down Wave and the price did not move much compared to previous down swing and failed to make Lower Low it indicates that there was large effort to go down and there is no reward and hence market will reverse upward.
* If there is a large Up Wave and the price did not move much compared to previous up swing and failed to make Higher High it indicates that there was large effort to go up and there is no reward and hence market will reverse downward.
In general, when the wave volume is diminishing in the down swings, it indicates supply is withdrawn from market.
Same way when the wave volume is diminishing in up waves, it indicates there is no demand in the market.
Category NinjaTrader 8 Indicators and More
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