Volume Price Trend (VPT)

Volume price trend, associated with David Markstein and with earlier volume-price work, adjusts OBV so that a large percentage move adds more than a one-tick move. OBV adds the same volume whether the stock rose 0.1 percent or 8 percent. VPT multiplies volume by that percent. A quiet drift barely moves the line. A large trend day moves it a lot. The cumulative level is still arbitrary. Read the slope and the divergences.

Because the factor is a percentage, VPT can be compared more fairly across time on a stock that has changed price level, as long as the history is consistent. It still uses the close-to-close sign and size only. Intrabar path is ignored. A divergence, price up and VPT flat, says the percentage advances are happening on lighter volume than the declines, or the advances are tiny in percent terms.

A rising VPT confirms that up closes, weighted by how large they were in percent and by volume, dominate the window. A new high in VPT ahead of price is the bullish lead. Treat it as context for a price setup, not as the setup.

VPT rolling over while price grinds higher says the percentage gains are no longer supported by volume. One down day of several percent on heavy volume will dominate, which is often exactly the bar you should look at directly.

Using VPT and OBV as two confirmations. They are the same family. If you want the percent weighting, use VPT and drop OBV from the vote. Also feeding it forex tick volume and reading the line as share accumulation.

The percentage factor explodes on a near-zero prior close, which is a data problem on some adjusted series and a real problem on penny names. And like all close-signed indicators, a bar that recovers into the close hides the selling that happened underneath.