What should we do, where should we get the data, since the exact information will remain hidden to us? But if we start to seriously understand this issue, we will understand that accurate data is not needed at all if we use the VSA technique.
For analysis, we only need to observe relative volume information. And you can see it by turning on, which is located in our MetaTrader 4 terminal.
These columns will show the tick price movement over a certain period of time. Let us remind you that in order to move the price by at least one point, there must be a sale or purchase of contracts. Based on these ticks, we will be able to determine real volumes.
For those who have just started learning VSA methods, it will be difficult at first to evaluate the readings of the standard Volumes tool, but this problem can also be overcome by installing an improved version of the Forex trading volume indicator on your terminal. One such algorithm is Volume Arrow.
It issues its signals based on the readings of another Better Volume 1.4 indicator. Looking at the next screenshot, we will see that if we compare the histogram readings of both indicators, there is not much difference, but the Volume Arrow and Better Volume 1.4 indicators provide more useful information.
Setting up volume indicators Volume Arrow and Better Volume 1.4
If we want to receive hints in the form of arrows, then we must not forget that the Volume Arrow volume indicator only works when Better Volume 1.4 is installed in the same window. If you do not install it, the arrows will not be displayed.
The following parameters can be configured for the Volume Arrow indicator:
- UseAlert - you can turn the sound signal on and off;
- ShowStatInfo - you can enable or disable the display of statistical data;
- In the following windows you can change colors: display of symbols, prices, spreads, display of time until the bar closes and statistical data;
- FontSitze, FontTupe - responsible for the font size and type;
- The two lower windows help you set the angle at which the main information will be shown, as well as the location of the time and spread information.
You can download both indicators right here:
Setting up Better Volume 1.4 input parameters:
- Number Of Bars - you can change the number of bars for calculating readings;
- Ma Period - you can change the period of the moving average;
- Look Back - you can change the calculation of ticks based on the number of past bars.
Forex trading volume indicator Better Volume1.4 and its application
The code of the Better Volume1.4 indicator includes automatic reading of information about the spread and volume of the candle, due to which there is an instant comparison with past indicators and a column of a certain color appears, which can tell us how much volume is currently present on the market.
The presence of a red column will tell us that there is a large volume in the market, and the price bar closed above the previous bar (up bar). The appearance of a yellow column, on the contrary, will indicate a decrease in volumes. Perhaps there will be a correction in the market after the trend.
The white bar also indicates the presence of large volume, but unlike the red bar, it shows the closing of the current bar below the previous bar (down bar).
The green color of the column indicates the appearance of a bar with a small spread but large volume. Blue bars indicate that there are no significant changes in the market. Pink bars usually appear during corrections and do not carry any special information.
We have figured out the signals that come from Better Volume1.4. Now let's look at how the volume indicator Volume Arrow behaves at this moment. When a candle appears that closes above the previous closing price (up bar), a red arrow appears on the chart.
This serves as a signal of a possible reversal of the bullish trend and the beginning of a correction. When a candle appears that closes below the closing price of the previous candle (down bar), we will have a blue arrow. This event will signal the end of a bearish trend or the beginning of a correction.
You should not rely only on the arrow readings; you need to remember that price reversals occur at strong support and resistance levels). When we have already determined the levels, we observe how the candle closed, after which a signal from the Better Volume1.4 and Volume Arrow indicators arrived.
In the screenshot below we have a downward movement from the level of 130.762, after which the price approached the support of 129.786 and broke through it. After this, we receive a signal from the volume indicator and a blue arrow appears, and the column shows that a down bar has formed.
Such bars, as a rule, appear at the end of a bearish trend, but since the support level was broken and the price went much lower, we can assume that this only indicates a correction, but not a trend reversal.
We see that the price subsequently entered a complex correction, thereby forming intermediate levels, and then dropped to the support line of 128.561.
Observing further, we see that on the 14th, a down bar signal appears near the level of 128.56, it tells us that the bearish trend is over. This also confirms the presence of an unbroken strong support level at 128.56. This signal can be considered correct and open long positions until the next strong level.
Then we see that the price slows down at the first intermediate level and corrects slightly. Then the trend continues and approaches the second intermediate level. It receives a signal, up bar which is shown by the indicator.
We can interpret it as follows. Since the price has bounced off support, it will most likely go to resistance, and a signal near the intermediate level indicates a possible correction. Subsequently, this happens, the price corrects and continues to move towards resistance 129.786.
After the above examples, the following conclusion suggests itself. When using the VSA method, you can really understand what is happening in the market at the moment. To do this, we do not need to see real trading volumes.
To carry out the analysis, tick volumes will be sufficient, and the Volume Arrow and Better Volume1.4 indicators, together with strong and intermediate levels, will show the presence of an imbalance in the market. All this helps the trader understand how to proceed.
Forex volume indicator- this is one of the most necessary tools in trading on, as it allows you to significantly increase the accuracy of forecasting further price movement or its reversal.
Why is trading volume important?
It allows you to determine the activity of large market participants, which have a huge impact on price movements.
Having information about trading volumes, you can find out the current mood of the market and follow the “big money”.
When determining volume in the foreign exchange market, certain difficulties arise. This is due to the fact that the Forex market does not have its own center (like, for example, the New York Stock Exchange), where all information about trading volumes could be collected. It is scattered all over the world. Therefore, we cannot obtain the exact value of the volumes of all transactions performed.
The good news is that we don’t need the exact value for successful trading. We have the ability to use relative volume data. It is also called teak. It shows the number of price changes per unit of time.
This data can be used to determine the relative size of trading volume, since in order for the price to move even one tick, a certain number of contracts must be bought or sold. Therefore, the real trading volume can be judged by the tick volume.
The simplest tick volume indicator is already built into the MetaTrader4 trading terminal. To get data on tick volume, select the desired price chart in the MT4 terminal, then open the Insert tab → Indicators → Volumes → Volumes.
The figure below shows a 30-minute chart of the GBP/USD currency pair along with the Volumes indicator.
When a new tick volume value increases relative to the previous one, the vertical bar of the indicator turns green, and when it decreases, it turns red.
The chart shows that at market turning points, the value of tick volume increases sharply.
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Better Tick Volume Indicator
This indicator clearly shows changes in tick volume. It automatically colors vertical data bars in different colors, comparing the current volume and range of the candle with previous values. In the indicator settings by default, comparison is made based on the last 20 candles.
Thus, the indicator shows signals that reflect the presence of high, medium or low volume and the size of the candlestick range on the currency chart.
If the volume bar is large enough, this means an increase in the activity of traders and market makers actively selling or buying currency. This could lead to a market reversal.
Better Volume indicator signals
- Green color– indicates the presence of a candle with a small range (spread) and significant volume. Most often it occurs at the end of a trend movement, when market makers close their positions, transferring them to ordinary traders, as well as during profit taking on corrections in the middle of a trend.
- Red– shows the presence of high volume and a wide range on a bullish candle. Typically occurs at the beginning and end of uptrends or during corrections in downtrends.
- Yellow– shows a small tick volume. Typically appears at the end of trend movements and during corrections.
- White– means there is a large volume on a bearish candle with a wide range. Occurs at the beginning and end of downtrends and during corrections on uptrends.
- Purple– shows candles with a small volume, the range of which can be both small and large. This signal appears quite rarely, most often during corrective movements.
- Blue– means no signals.
You can see for yourself that the Better Volume indicator helps determine trend reversal points in the Forex market. This indicator should be used in conjunction with
Traders have always been fascinated by market volume. Various trading strategies based on volumes have emerged. At the same time, Forex volume is a complex concept; Forex volume indicators do exist. The use of volume indicator in mt4 by traders is similar to any volume indicator in other markets.
When traders focus on volume, they want to uncover the secrets of the market. Or, where is the smart money buying or selling?
We all know that the Forex market is difficult. Its liquidity is the largest in the world.
More than seven trillion dollars flow in the Forex market in daily volume. Despite this volume, the market is unstable. Or maybe it's because of this.
For a Forex trader, volume trading strategies are a little more complicated than others. There's a reason for this.
While other indicators/oscillators have a direct interpretation, the volume indicator is relative. Thus, the mt4 platform proposed Volume indicator can be interpreted.
But there are several strategies for volume indicators in Forex. And various indicators that use market volume.
In this article, we will look at the most important ways to use volume in Forex. Here's what we'll be dealing with in this article:
- Different ways to use the Forex Volume indicator.
- How to use time segmented volume is one of the best ways to identify reversals.
- Why the volume indicator is such a powerful trading tool and how to use it in the Forex market.
- How to trade with the On-Balance Volume indicator.
- A few tricks when using the Chaikin Forex volumes indicator.
In any case, one thing needs to be said at the beginning: in the Forex market, volume is complex.
What you see in the spot Forex market is not the actual volume traded. This is simply the volume traded by your broker.
What is volume in Forex and why are traders worried?
The Forex volume indicator registers "unusual activity" when compared to other bars. This is a sign of high demand.
Therefore, it is not surprising that a strong trend has begun. This simple volume trading strategy is sometimes enough to put you on the right side of the market.
Why complicate everything?
But is this really permanent? Since Forex volume is relative, the answer is no.
However, if traders understand the calculations of the volume indicator, they understand the market. The formula looks like this:
Volume indicator = total value / number of transactions for a given period
It is therefore not surprising that spikes are looked for when trading volume, as they usually lead to turning points.
Trading with the Segmented Volume Indicator
One of the most popular price and time oscillators is. It was developed in the 1950s and reflected the state of the market at that time. This oscillator works with overbought and oversold conditions.
However, the volume oscillator does not have overbought or oversold levels. Instead, it has a simple line.
This line acts as an oscillation level for appropriate security. It works well for Forex pairs too.
One of the best Forex volume oscillators is Time Segmented Volume (TSV). Don Worden wanted to see where the market had the most activity. And where it is not.
Therefore, TSV is different from mt4 volume indicator. This is more visible in the display of tops or bottoms.
One of the best volume trading strategies with TSV is . These are discrepancies between price and volume indicator.
Above is the EUR/GBP daily chart. It shows the divergence between TSV and price.
While the actual price made a second low, the TSV did not confirm this. This is the power of this Forex volume indicator: it shows the breakout before it occurs.
According to statistics, 80% of all market orders are fully automated. This makes chart patterns difficult to read.
Because of this, traditional technical analysis setups don't work as well as they used to. Trade has changed.
When this happens, the bar is said to have no pressure exerted. Consequently, the market is preparing to jump.
Above is the EUR/USD chart. This shows that there is no pressure to sell.
To make this happen, traders look for the following:
- The volume is less than the last two candles.
- Spreads are narrowing.
- The price closes below the previous candle.
Decreasing volume coupled with narrowing spreads suggests the market is preparing to jump. And so it happened.
Powerful volume trading strategies like this one show the ideal conditions for entering the market. Right before the breakthrough.
Obviously, in the absence of demand on rising bars, the conditions are opposite.
How to trade with the on-balance volume indicator (on-balance volume indicator)
On-Balance Volume (OBV) is an aggregate tool based on volume. Simply put, it's a line.
However, this line is special for several reasons. First, it appears at the bottom of the chart, but it is not an oscillator.
Secondly, it shows the relationship between the number of transactions and price movements. Therefore, it shows volume.
Finally, traders use this line to confirm a trend, or to identify reversals.
— If the OBV indicator rises, the trend is bullish. When it falls, the price must also fall.
Thus, traders look at OBV to be accurate when predicting a safe move. In our case, the movement of a currency pair.
The OBV period can be adjusted. In fact, its calculation method depends on the period under consideration.
To appreciate the power of this volume profile indicator, take a look at its calculation. If the current closing price is higher than the previous one, the current volume is added to the OBV.
If it has not changed, the volume remains unchanged. And it is deducted if the closing occurs lower.
Because of these characteristics, it reflects price action. Therefore, when divergence occurs, it is a powerful reversal signal.
The above example for AUD/USD shows the price increase. But Forex Volume OBV is declining.
Now, this is dangerous territory for bull traders. The market fluctuates.
A close look at the left side of the chart shows that OBV is mimicking price and nothing more, hence the bears will use this opportunity to sell the pair.
Trading with the Chaikin volume indicator (chaikin volatility (chv) indicator)
Perhaps the best volume indicator is the Chaikin indicator, created by Marc Chaikin. This is a combination between and a momentum oscillator.
More precisely, it measures the momentum of the accumulation/distribution line with the MACD. Traders use it to predict changes in trends.
When momentum changes, this is the first sign of a "swing" in the trend. Thus, if traders know in advance when this will happen, they will place positions accordingly.
Traders use the Chaikin Volume Indicator in both positive and negative territory. The volume indicator strategy is to buy or sell when it crosses from positive to negative or negative to positive territory.
Divergence also works with the Chaikin indicator, however, since we have already shown how divergence works with the Forex volume indicator, we will focus on the crossover strategy.
This is what this indicator looks like on a chart. It is completely different from the Forex volume indicator on .
As explained earlier, the idea is to buy or sell when Chaikin crosses the zero level. But it gives several signals. Many of them are false.
How to filter signals from the Chaikin volume indicator
The answer is to add layers. Like any volume indicator, the Chaikin indicator can be edited.
To filter out false signals, a trader needs to follow several steps. First, determine the area surrounding the zero level. Or, area of interest.
Secondly, watching the volume oscillator break through it will be the market direction.
Finally, use signals only in the direction of the previous breakout and ignore the rest.
Let's look at the above diagram and interpret it. This is a four-hour chart of EUR/JPY.
The defined area here is between -25k and +25k. A break above or below these two lines defines the market.
We must use this breakthrough to filter signals. Thus, on the left side, the Chaikin volume indicator has risen above 25 thousand. This is a bullish signal.
Traders only buy at crosshairs above the zero level. On the other hand, when the oscillator falls below -25k, a bearish environment begins.
Analysis and interpretation of volume opens the gate to various possibilities. Traders strive to form an image of what professionals do, this is what is called VSA.
The best volume indicator in mt4 also offers to interpret time, not just price. This is why traders use TVS as discussed in this article.
However, regardless of the volume indicator, the strategy is the same for everyone. Finding the best places to sell or buy a currency pair.
There is no indicator in the Forex market that shows the full volume; it only shows the volumes with which the broker works.
There is no strategy that is better than another. Volumes are relative, especially in the Forex market.
But if anything, they represent one of the few opportunities where traders can spot a move before it happens. To be clearer, price action analysis tells a lot about future movements.
When bullish price action rises with volume, traders watch closely, and when volume is lacking, everyone hopes for the move to fade.
Many traders do not use volume trading strategies at all. They simply add a volume indicator to the chart and analyze the spikes. So they use volume as confirmation for their strategy.
In other words, some trades are simply abandoned if there is no volume or if volume is on the decline.
On the other hand, if volume increases, it simply intensifies the trade. Everyone wants to trade in the same direction as the big players.
This is why the Forex volume indicator is so popular among Forex traders. Especially among retailers.
VoLi is a unique volume indicator for MT4 that perfectly shows price speed and volume changes. The indicator itself is based on such indicators as OBV, AlievFXVolumes and Volume. It is able to show you surges in market volumes, decreases and increases in volumes. The indicator will also show you the moments when a market maker, a large investor, banks, trading houses enter the market, and you just need to come in with him and take a bite of your cake!
The uniqueness of the indicator is that it can be used both for the Forex market and for binary options!
Let's look at all the advantages of the indicator and describe each in detail.
Shows overbought and oversold conditions.
Shows support and resistance levels based on volumes.
Displays OBV as a percentage (%) of volume.
Highlights growth and decline in volume in columns.
Shows volumes in a new, improved form.
Does not redraw its indicators and data when trading.
Now you can clearly and in a more convenient visual form assess when the market is overbought and oversold.
“A market is called overbought when the price has jumped too quickly and high, i.e. we expect it to go down, and oversold is called a market when the price has fallen too quickly and low, i.e. we expect it to go up.”
The indicator is capable of showing OBV (On Balance Volume) data as a percentage of volumes.
"The On Balance Volume indicator (abbreviated as OBV) is a technical stock indicator that relates volume and the accompanying price change."
The volume indicator for MT4 itself looks for those places where the volume has been growing or decreasing for some time and highlights them.
“An increase in volume is when 2 or more bars (candles) are directed upward, and the volume of each of them is greater than the previous one, and a decrease in volume is when 2 or more bars (candles) are directed downward, and the volume of each is less than the previous one.”
We have made a unique type of indicator that everyone can customize for themselves.
“In the indicator you can customize the color, parameters, sound and many other features that we have prepared for you.”
The indicator does not lag and does not redraw the data that already exists.
The volume indicator for MT4 does not draw, draw or correct its data. It shows what is there"
How can an indicator help me in binary options trading?
Undoubtedly, binary options are one of the riskiest areas of trading. But it’s not strange that there are those who make money there. Why don't you enter this part? Our team gives you a VoLi indicator that adapts to the market and shows the opinion of the crowd. We see this as a percentage and can clearly understand what needs to be done, buy or sell. You can say this is an indicator of trading mood
Please note: in all ClusterDelta series indicators, the name of a variable that looks like “Comment_variable” implies a description, hint, or valid parameters below the next variable with the same name. The "Comment_..." variable does not affect the functionality of the program in any way and, accordingly, it makes no sense to describe it separately.
- Instrument- trading ticker or AUTO value. The ticker should indicate the futures and preferably the expiration date in letter format (H3 - March 2013) or digital (06-13 - June 2013). All parameters must be indicated in Latin letters.
Examples:- 6E 03-13- futures on EUR/USD with expiration in March 2013
- ESH3- E-Mini S&P 500 futures expiring in March 2013
- C.L.- Crude Oil, since expiration is not specified, the most active contract will be taken
- AUTO- based on the ticker of the instrument that your DC substitutes, the system will try to select an equivalent futures (EUR/USD = 6E, GBPUSD = 6B)
- Update_in_sec- indicator update time in seconds. It is recommended to increase depending on the tasks and the selected TF. Also, when using several indicators, it is useful to set a multiple update time (12, 17, and 21 seconds for example for 3 indicators). If you are looking at volumes above M30, think about whether it is really worth specifying an update every 15 seconds.
- MetaTrader_GMT- parameter for calculating the time zone of the time that the terminal uses. In an active market in AUTO mode, the system will calculate it automatically. On a closed market, this parameter must be manually set.
How to use
In most cases, the volume indicator is used in conjunction with VSA patterns. In addition, I recommend remembering the pattern of a surge in volume (and delta), and also as one of the possible signals - divergence on volumes, i.e. a decrease in volume while the price breaks through the peak of a wave with increased volume (where the wave experts will then determine the 3rd and 5th waves).
In order to reduce the load, data for TFs below M15 are available only for the last week. In the near future, a parameter will be added - the number of days in the downloaded history, which the user will specify independently.
It was noticed that when changing the timeframe while loading the history, the volume histogram may be drawn with an offset or not drawn at all. As a solution, it is enough to change the TF several times or simply call up the indicator properties.
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