This is another of our volume-based indicators, and in this case, one we refer to as the VRSI or volume relative strength indicator. As the name suggests, this considers the relative volume on the chart and presents us with a graphical display of what we call pressure. In other words, the pressure supporting a trend higher or lower, or alternatively, of course, a lack of pressure, which reveals the opposite.
The beauty of this indicator is that it is the perfect compliment for our volume price analysis methodology, as many of the analytical approaches are identical in terms of analyzing pressure bars in the same way that we do with volume bars. In addition, it also gives us increased confidence to stay in a position once underway and not to exit too early on an emotional exit.
In this lesson, David walks you through the key essentials of the volume relative strength indicator on NinjaTrader.