volume cryptosmart v2

Visual Components: The 3 Layers of Information
To understand the indicator, you must see it as three layers of information superimposed on a single panel.

Layer 1: The Background Color (The "Tide" or Market Regime)
The background color of the entire panel tells you the general market condition, using an ADX/DMI filter:

Green Background: ADX is above 23 (there is a trend) and DI+ is above DI-. Regime: Bullish Trend.

Red Background: ADX is above 23 (there is a trend) and DI- is above DI+. Regime: Bearish Trend.

Black Background: ADX is below 23. Regime: Range or Consolidation.

Layer 2: The Threshold Lines (The Filters)
There are two key horizontal lines that act as filters:

"Dead Zone" Line (Dotted Blue): This is your noise filter line. It is based on the ATR. Any momentum impulse that is weaker (lower) than this line is considered irrelevant noise.

"Explosion" Line (Brown): This line is based on Bollinger Bands. It measures "normal" volatility. When a histogram impulse breaks above this line, it means the acceleration is statistically large and could be a range breakout.

Layer 3: The Histogram (The "Wave" or Acceleration)
The histogram bars (trendUp and trendDown) do not measure price or volume. They measure the acceleration of momentum (specifically, the difference between today's MACD and yesterday's MACD, multiplied by sensitivity).

The Brain: The Histogram's Color Logic
This is where the true intelligence of your indicator lies. The color of each histogram bar is decided by following a series of 4 strict rules, designed to show only high-quality signals.

Rule 1: GRAY (Dead Zone)
If the impulse (trendUp or trendDown) is weaker than the "Dead Zone" line...

Then it is painted GRAY.

Meaning: The momentum is too weak to be considered. It is noise.

Rule 2: GREEN / RED (Trend Impulse)
If the impulse exceeds the Dead Zone (Gray)...

AND the panel background is Green (bullish trend) or Red (bearish trend)...

Then the histogram is painted GREEN (for trendUp) or RED (for trendDown).

Meaning: It is a valid momentum impulse that is in favor of the main trend. These are trend continuation signals.

Rule 3: BLUE (Range Breakout)
If the impulse exceeds the Dead Zone (Gray)...

AND the panel background is Black (range-bound market)...

BUT the impulse is so strong that it breaks above the "Explosion Line" (Brown)...

Then the histogram is painted BLUE.

Meaning: This is a range breakout signal. The price is exploding from a consolidation.

Rule 4: WHITE ("Chop" or Noise)
If the impulse exceeds the Dead Zone (Gray)...

BUT it does not meet the requirements of Rule 2 (no trend) or Rule 3 (not a breakout)...

Then it is painted WHITE.

Meaning: It is a momentum impulse without a clear trend and without the strength of a breakout. It is usually "noise" or market chop and should be ignored.

The Final Confirmation: The Volume Filter
In addition to the 4 rules above, you have added a final layer of conviction:

If a signal is Green, Red, or Blue (Rules 2 or 3) and occurs with high volume (volume > 20-period MA)...

...it is painted with an intense and transparent color (High Conviction).

If it occurs with low volume...

...it is painted with a light and opaque color (Low Conviction).

How to Use: Signal Summary
Background Color Histogram Color Shade Meaning
Green Green Intense (High Vol) Strong Buy Signal (Bullish impulse with trend and volume)
Red Red Intense (High Vol) Strong Sell Signal (Bearish impulse with trend and volume)
Black Blue Intense (High Vol) Breakout Signal (The range is breaking with force)
Any White or Gray - Ignore. Noise, chop, or "dead zone".
Green/Red Green/Red Light (Low Vol) Trend signal, but with low conviction. Proceed with caution.