Trading with Volume indicator offers the following features: Volume confirms the strength of a trend or suggests about its weakness. A rising volume indicates rising interest among traders, while a falling volume suggests decline in interest.
All various kinds of breakouts and market spikes can be validated or voided with a help of Volume indicator. Volume is the second most valuable data after the price itself.
Large volume signifies that there is large number of market participants involved, including financial institutions. Small volume tells that there are very little participants in the market, neither buyers no sellers have any significant interest in the price.
In addition, no financial institutions will be involved, thus a market is going to be moved only by individual traders and so the move will be weak. Volume helps to learn about the health of a trend.
What Does Volume Mean In Forex Trading
An uptrend is strong and healthy if Volume increases as price moves with the trend and decreases when price goes counter trend correction periods. When price is going up and volume is decreasing, it tells traders that a trend is unlikely to continue.
Price may still attempt to increase at a slower pace, but once sellers get the grip on it which will be signified by an increase in volume on a down candlethe price will fall. A downtrend is strong and healthy if volume increases as price moves lower and decreases when it begins retracing upwards.
When price is falling and volume is decreasing, the downtrend is unlikely to continue. Price will either continue to decrease, but at a slower pace or start to rise. To understand the nature of spike in volume before a trend reversal, traders need to know how the data for volume indicator is gathered in Forex. Forex volume cannot be measured precisely as it is done, for example, in Equity market, where every share traded equals 1 volume, and selling shares means in volume.
Forex by nature cannot count how many contracts and what sizes of contracts were traded at any given time, because the market is wide and decentralized.
What is Volume in Forex Trading? - Trading Heroes
As it moves up and down volume adds up. When volume rises, it means lots of participants are actively selling and buying currencies.
When volume spikes at certain price level, traders know that there was lots of interest shown by traders to that price level. If there is a lot of interest, it means the level is an important one. This simple observation of a volume indicator allows identify important Support and Resistance levels, which would certainly play significant role in the future.
Where Volume spikes are distinctively extreme larger than any historical spikes around — Climax Volume — traders should look for clues from the price itself. Single volume spikes only bring price to a halt. A lot of stand-alone average volume spikes occur during fundamental economic announcements on daily basis. News what does volume in forex mean cause spike in volume for a single day and then volume disappears again. Reversals, however, happen not over one day but a series of days.
If higher than average volume stays on the market for several to many days a huge volume spike — volume climax — will crown a point of market reversal. Volume indicator helps to validate all kinds of breakouts.
When market is consolidating on a low volume, a sudden pick up in volume would signify that a breakout is due. Breakout occurring on rising volume is a valid breakout, while a breakout that caused no interest from traders as it is happening on a low volume is more likely a false one.
Buyers seem to be going active. Correction came — volume drops, no one is interested in Selling the pair — confirmation of a healthy volume. Exhaustion gap is seen on the chart, followed by a doji candle with a spike in volume — a highlight of a market turning point.
Market ends trading on a lower volume. Even Sunday was busier than usual. The new stockholm trade fair market begins with an attempt to rise higher, however volume suggests that the interest to the upper side is much lower. A pause on week 21 with a sharp rise in price is met by even higher volume on week A single day volume spike on a low or average volume is considered high when volume bar exceeds 50 MA of volume 3 times.
When high volume stretches over several days span, then volume must 2 times exceed 50 MA for 2 days in a row. How does this indicator determine volume? Does it require a specific data provider?
Can Forex Volume really be determined from a single bank data source? It is impossible to measure the exact volume in Forex, since indicator forex infallibile Forex market is decentralized. The analysis is good. Can this work using MACD on an Hourly Chart? Again does it work only on MT4 platform alone? It works on all platforms. With MACD it's totally different.
MACD shows a difference in between 2 moving averages, it's not the same as measuring Volume. On MT4 you have the standard Volume indicator built in.
Volume in Forex… Does it Mean Anything ? | Mechanical Forex
Choose Tab called "Common" 4.
Volume in the forex market - Beginner Questions - cyzopuk.web.fc2.com Forex Trading Forum
Find the line that says "Show Volumes" and activate it. Also, there I have 2 custom Volume indicators colored and with an average line: Example if its green bar it present the volume is increasing and red is represent volume is decreasing, but how about the yellowgreen and orange bar represent?
I am confuse for the color meaning. Please explain more on the color I see no correlation with the downtrend at all. The downtend begins at week 27, but how do you see volume picks up in weeks ? It only increases on the Tuesday and Friday of those weeks. It then decreases in week 29, when the downtrend is at its strongest. And volume doesn't confirm the downtrend until week Brother what you are posting Thank you very much for your time and efforts.
You are so so clear! But please say something on the figure in the upper left hand corner of the volume chart I did not know the importance and interpretation of volume until i read this post. Trends are confirmed by volumes The trouble with this part of the tutorial is that, like many other sources, it depicts volume bars in one solid colour. But, many trading platforms divide the bars into 'value up' and 'value down' and colour-code them accordingly.
Is the lesson here that regardless of this tiny little detail, only the length of the bar is what the trader should pay attention to? Volume - Quick Summary Trading with Volume indicator offers the following features: Extreme Volume readings — Climax Volume often highlight price reversals. Points where market trades on high volume are the points of strong support and resistance. All various kinds of breakouts and market spikes can be validated or voided with a help of Volume indicator Volume indicator Why Volume?
Volume and Trend Volume helps to learn about the health of a trend. Volume and Reversals To understand the nature of spike in volume before a trend reversal, traders need to know how the data for volume indicator is gathered in Forex. Volume and Breakouts Volume indicator helps to validate all kinds of breakouts. Trend lines and other breakouts are validated or voided the same way. Both sides lost interest as the market drifts sideways on low trading range. Buyers going full steam — volume rises — it is a healthy uptrend.
Volume picks up again once price finds its uptrend. Price begins to decline, volume picks up — interest to the downside is present. Looks great - I am having trouble finding the link - could someone post the link please?