Volume & money flowTrade Volume Index · TVI
A running tally of volume that treats each tick up as accumulation and each tick down as distribution.
Works in most conditionsEngine-computed on a fixed sample series
What it is
The Trade Volume Index, or TVI, is a running total of volume that tries to separate buying pressure from selling pressure tick by tick. Like On-Balance Volume, it accumulates volume into a single line, but it decides whether each small price change counts as accumulation or distribution using a minimum tick threshold rather than the bar's net close. To a beginner it answers: is the volume flowing into this market on the upticks or the downticks — are buyers or sellers doing the heavy lifting? A rising TVI says buyers dominate, a falling TVI says sellers do. It was designed for intraday, tick-based data, where the minimum-tick filter can meaningfully distinguish a real uptick from noise. The line is meant to be read for its trend and, especially, for its divergences from price.
How it's calculated
TVI needs a minimum tick value, a small price increment that defines what counts as a meaningful move. On each new price it computes the change from the prior price and compares it to that threshold: if the change is greater than the minimum tick, the current direction is accumulation; if it is more negative than the minus-minimum-tick, the direction is distribution; and if the change falls inside that neutral band, the prior direction is simply carried forward. Then it applies the direction to volume — when the direction is accumulation it adds the period's volume to the running total, and when it is distribution it subtracts it. The result is a cumulative line whose slope reflects the net balance of accumulation over distribution. The neutral band is the key difference from OBV: tiny, meaningless flickers do not flip the direction, they inherit the last real one. Because it is cumulative, the line's absolute value is arbitrary and depends entirely on where the calculation started.
Reading it step by step
Read TVI first for its trend: a steadily rising line means accumulation is winning and buying pressure dominates, while a falling line means distribution and selling pressure. The real signal, though, is divergence against price. When price pushes to a new high but TVI fails to make a new high, the advance is running on thin participation and may be hollow — a bearish warning. When price makes a new low but TVI holds up or turns higher, selling may be exhausting even as price sags — a bullish tell. Confirmation is the mirror image: TVI moving the same direction as a price breakout adds conviction that real volume backs the move. Because the absolute level is arbitrary, never read a specific number — read slope, direction, and the relationship to price.
Best timeframes and settings
TVI was built for intraday, tick-level data, and that is where it works best — scalping and day-trading timeframes on liquid instruments with fine-grained price and volume. The one real parameter is the minimum tick value, which must be matched sensibly to the instrument's typical tick size; set it too small and every jitter registers, too large and genuine moves get ignored. On coarse bars — daily candles, for instance — the minimum-tick filter loses much of its meaning, and a simpler cumulative-volume line like OBV is usually just as good. The trade-off in the threshold mirrors the usual one: a tighter threshold is more sensitive and noisier, a looser one is smoother but slower to register real flow. Because it depends on fine data, TVI is less useful on illiquid names where the tape is sparse. Reserve it for markets where the tick stream is rich enough for the filter to do its job.
When and where to use it
Use TVI to gauge whether the volume behind a move is genuine, in any market where you have good intraday data — equities, futures, and liquid forex or crypto. It is regime-agnostic in that divergence and confirmation both matter in trends and near ranges, but its practical home is intraday breakout and reversal analysis. Avoid it on coarse timeframes or thin instruments where the tick filter is meaningless and the line becomes noise. It is not a standalone timing tool; it is a participation gauge that tells you whether to trust a price move. When you are trying to decide whether a breakout is real or a trap, TVI's agreement or disagreement is the kind of context it exists to provide. Treat it as a confirming lens rather than a trigger.
Strategies that use it
A divergence strategy watches for price and TVI to disagree at extremes: if price prints a higher high while TVI makes a lower high, you fade or exit longs, anticipating that the unsupported advance will falter, with a stop above the price high. The bullish mirror fades a price lower low that TVI refuses to confirm. A breakout-confirmation strategy only takes a breakout when TVI thrusts in the same direction on the break, filtering out low-participation false breaks, with the stop back inside the prior range. A trend-participation strategy simply requires TVI to be rising to hold longs and falling to hold shorts, stepping aside when the line flattens and participation dries up. In each case TVI is the second opinion — it does not generate the entry so much as validate or veto it. Pair it with a price level so the signal has a location.
Combining it with other indicators
TVI belongs to the same family as On-Balance Volume and the Volume Flow Indicator, so you would use one of them, not all three — TVI's edge is the tick-based filter for intraday work. It complements price-structure tools: at a support or resistance level, TVI divergence tells you whether the level is likely to hold. Cumulative volume delta is a natural companion for order-flow-minded traders, offering a finer read of buying versus selling that corroborates TVI's direction. Momentum oscillators such as RSI pair well, since a TVI divergence that coincides with an RSI divergence is a stronger warning than either alone. Moving averages of price give TVI a trend context, so you know whether its confirmation is with or against the larger move. Keep the chart uncluttered by choosing one volume line and one or two confirming tools.
Where it fails
TVI's biggest practical failure is misconfiguration: an ill-chosen minimum tick value makes the line either hyperactive or inert, and on coarse bars the filter loses meaning entirely. Its cumulative nature means the absolute level is arbitrary and start-point dependent, so comparing raw values across charts or dates is meaningless — only slope and divergence carry information. Like all volume lines it can mislead around unusual events such as index rebalances, expiries, or news spikes, when volume surges for reasons unrelated to directional conviction. Divergences can persist far longer than a trader expects, so acting on the first sign of one without price confirmation invites early, losing entries. The classic mistakes are reading the absolute number, using it on daily bars, and trading divergence in isolation. Avoid them by matching the tick to the instrument, using fine data, and treating TVI as confirmation rather than a trigger.
A worked example
Imagine an intraday chart where the minimum tick is set to 0.02 on a stock trading near 50. Over a rally, three consecutive 1-minute prints move from 50.00 to 50.05 to 50.11 to 50.18 — each change exceeds 0.02, so the direction is accumulation and the bars' volumes, say 4,000 then 6,000 then 5,000 shares, are added to the running TVI, lifting the line firmly. Later, price grinds to a fresh session high of 50.40, but the individual upticks are small and interrupted by sub-tick flickers that carry the prior direction, so TVI barely rises and prints a lower high than it did on the earlier thrust. That divergence — new price high, no new TVI high — warns the advance lacks participation. A scalper long from 50.18 uses it to take profits into 50.40 rather than adding, and indeed price rolls back to 50.10 as the unsupported high fails, vindicating the TVI read.