NVI (Negative Volume Index) — what it is and how to use it in trading
Definition
NVI (Negative Volume Index) is a cumulative indicator that only updates on bars where volume is lower than on the previous bar: on such bars, the percentage price change is added to NVI; on all other bars the value stays unchanged.
How it works in the builder
The nvi operand takes no parameters and returns a raw cumulative number. It rests on the hypothesis that quiet, low-volume bars are more often driven by informed ("smart") money rather than a crowd reacting to news.
What it looks like on the chart
Drawn as a separate panel as a sparse staircase line with fewer, bigger steps than OBV (since most higher-volume bars leave it unchanged), plus a separate dashed longer-term trend line overlaid on top.
Typical use
By the classic interpretation, what matters is not NVI's raw level but the direction of its longer-term trend — a rising NVI trend is read as accumulation by "smart money" independent of the current price.
Common pitfalls
The "smart money on low-volume bars" hypothesis is an assumption, not a proven pattern, and its validity on today's liquid markets is debated. As with OBV/ADL/VPT, the absolute level on its own is not informative.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.