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Reversion Docs

VO Overview

The Volume Oscillator (VO) measures the percentage difference between a fast and slow EMA of volume — essentially MACD applied to volume data. Positive VO means volume is increasing (the fast average exceeds the slow average), negative means volume is declining.

VO helps confirm price moves: rising price with positive VO = strong conviction, rising price with negative VO = weak conviction (potential reversal).

How Volume Oscillator Works

Section titled “How Volume Oscillator Works”

Core Concept

Section titled “Core Concept”
  1. Calculate VO value from the input price/volume data
  2. Apply smoothing if applicable
  3. Compare to threshold or signal line for signal generation
  4. Interpret: Signals indicate momentum direction or extremes

Key Characteristics:

  • Volume Indicator = Measures volume dynamics
  • Signal Line Available = Threshold-based signals only
  • Bounded = No (unbounded)

Visual Interpretation

Section titled “Visual Interpretation”

VO Behavior:

  • Volume expanding — confirms price moves
  • Volume contracting — price moves may be weakening

Trading Signals Available on Reversion

Section titled “Trading Signals Available on Reversion”

These are the signal names you select when configuring VO in the algorithm builder or via the MCP agent:

SignalTriggers WhenTypical Use
vo_positiveVO is positive (fast volume MA > slow volume MA)Volume expanding — confirms price moves
vo_negativeVO is negative (fast volume MA < slow volume MA)Volume contracting — price moves may be weakening

Display: Separate pane

Category: Volume

Threshold range: Unbounded (percentage-based, centered on zero)

Key Characteristics

Section titled “Key Characteristics”

What Volume Oscillator Does Well:

  • Clear Directional Signals
  • Combines well with trend filters
  • Threshold-based signals for entry timing