The Klinger Volume Oscillator (KVO) is a confirmation indicator. It was developed by Stephen J. Klinger. The Klinger Volume Oscillator uses high, low, close and volume to create a volume force. This volume force (VF) is then turned into an oscillator by taking a fast EMA of VF and subtracting a slow EMA of VF. In this, the user may change the method (EMA), and period lengths. A signal line, which is an EMA of the KVO is also plotted to trigger trading signals.
In long-term trends of money flow while remaining sensitive and short-term fluctuations to a trader to predict short-term reversals used to determine by Klinger Volume Oscillator. You can attach KVO in Zerodha Kite from the STUDIES section. You can change the default parameters and colors of the indicator.
A signal line which 13-period moving average is used to trigger entry or exit decisions, which is very similar to signals that are created with other indicators such as the ‘moving average convergence divergence’. The short cycle is 34 and the long cycle is 55 of the Klinger Volume Oscillator. A signal line of Klinger Oscillator, which is an EMA of the Klinger Oscillator (KO), is plotted to trigger trading signals. This Oscillator is comparing the volume flowing in and out of a security to price movement, and it is then turned into an oscillator.
The KVO has a histogram similar to the MACD indicator. So, this Oscillator can also use divergence to identify when price and volume are not confirming the direction of the move. It is considered to be a bullish sign when the value of the indicator is heading upward while the price of the security continues to fall. In live trading the traders can use other trading tools such as trendlines, moving averages and other technical indicators to confirm the reversal.