Positive Volume Index (PVI) on Bitcoin

What it shows

Below the candles, a blue PVI line that only steps when a candle out-trades the one before, and an orange 255-candle EMA of it. Because the index begins at 1 on the first loaded candle, its slope and its side of the orange line are what count.

How Pravex works it out

1. The index starts at 1 on the first candle that is loaded.
2. On a candle whose volume is higher than the previous candle’s, the index = index × (1 + the close’s percent change as a fraction).
3. On any other candle the index stays where it was.
4. Smoothing the index with a long EMA, 255 candles unless you change it, gives the orange line.
5. Made-up case: with the index at 1.00 and a close down 1% on a candle with higher volume, the index becomes 1.00 × 0.99 = 0.99. If the next candle has lower volume, it stays at 0.99.

Settings

Setting	Default	What changing it does
Signal average length	255	How many candles go into the orange line. A shorter value follows the index closely; a longer one moves slowly.

How traders read it

There are no levels to hit. The slope of the blue line and its side of the orange line are the whole reading.

Busy candles are often where the crowd piles in, so the PVI above its EMA says the crowd’s candles have been closing higher. Below it, they have been closing lower.

A rising line means that candles with rising volume closed higher, on balance. Compare its direction with the price chart: if they disagree, the busy candles and the quiet ones are telling different stories.

When it misleads

The level of the index depends on where the loaded data starts, so compare slopes and crossings, not numbers. One more contract than the candle before counts the same as double the volume, and the whole move of that candle goes in. The orange line is missing for the first 255 candles, around ten days of hourly bitcoin. A news spike on heavy volume moves the PVI by its full size in one step.

Questions and answers

Which candles move the Positive Volume Index?

Only candles that traded more than the candle before. On those it grows or shrinks by the close’s percent change; quieter candles leave it unchanged.

Is a PVI value of 1.2 high?

Not by itself. The index begins at 1 wherever the loaded data starts, so 1.2 only says price rose about 20% across the busier candles since then.

Should I use PVI and NVI together?

Many charts do, since they split the same candles in two: the PVI takes those where volume rose, the Negative Volume Index those where it fell.

Can I shorten the PVI’s orange line?

Yes, it starts at 255. A shorter value makes the orange line follow the index closely, which gives earlier but noisier crosses.

Related: Negative Volume Index, Price Volume Trend, Percentage Volume Oscillator, every indicator.