VPCI Node
Volume Price Confirmation Indicator
Overview
The VPCI (Volume Price Confirmation Indicator) Node, developed by Buff Pelz Dormeier, measures the degree to which volume confirms the current price trend. It combines three components: the gap between the long-term VWMA and SMA (Volume Price Confirmation), the ratio of short-term VWMA to short-term SMA (Volume Price Ratio), and the ratio of short-term to long-term average volume (Volume Multiplier).
Positive VPCI values indicate that volume is confirming and amplifying the price trend — a high-conviction trend continuation signal. Negative VPCI values indicate that volume is diverging from or contradicting price movement. The indicator is unbounded, so the magnitude matters: a reading of +0.5 is twice as confirmatory as +0.25.
Algorithm
Parameters
| Parameter | Default | Description |
|---|---|---|
| shortPeriod | 5 | Short-term window for VPR and volume ratio |
| longPeriod | 20 | Long-term window for VPC and volume ratio denominator |
Inputs & Outputs
| Slot | Direction | Type | Description |
|---|---|---|---|
| input | Input | OHLCV | Standard OHLCV price and volume data |
| values | Output | (number | null)[] | VPCI value (positive = trend confirmed, negative = divergence) |
| timestamps | Output | number[] | Unix timestamps aligned to input |
Use Cases
Trend Quality Filter
Use VPCI as a filter for trend-following systems: only enter long trades when VPCI is positive (volume confirming the uptrend) and only enter shorts when VPCI is negative. This filters out low-quality price moves where volume is not participating, significantly improving the signal-to-noise ratio of trend signals.
Moving Average System Enhancement
Combine VPCI with an MA crossover system: when price crosses above its MA and VPCI is positive, both price momentum and volume confirmation are aligned — higher probability long. When MA cross is bullish but VPCI is negative, the crossover lacks volume confirmation and has lower probability.
Divergence-Driven Exit Signals
When in a long position and VPCI turns negative while price is still rising, volume is no longer confirming the move. This early warning signal of volume divergence can be used as a partial profit-taking trigger before the price trend reverses.
Tips & Best Practices
Adjust Ratio for Timeframe
The default 5/20 short/long ratio (4:1) works well for daily charts. For weekly charts, try 4/16. For intraday (hourly), try 8/34. The key is maintaining the approximately 4:1 ratio so the short-term and long-term windows capture meaningfully different perspectives of volume and price momentum.
VPCI is Unbounded — Use Relative Levels
Unlike RSI or MFI, VPCI has no fixed scale. Instead of using absolute thresholds, compare current VPCI to its recent range. A VPCI at a multi-month high alongside a price breakout is a very strong confirmation signal even if the absolute value varies by instrument.
Sensitive to Volume Data Quality
VPCI depends heavily on accurate, consistent volume data. Instruments with erratic or missing volume (some ETFs, OTC stocks, or poorly reported crypto venues) will produce unreliable VPCI. Always verify volume data completeness before deploying VPCI-based strategies.