An easy moving price is one which continues in its trend for a particular period. This indicator works best in volatile markets where the trends cannot be clearly seen. This indicator is best when it is used for longer time frames, like a daily chart as it identifies trends based on volume averages. This indicator generates buy and sell signals when it crosses the 0 centreline or makes bearish or bullish divergences as shown in the chart below:.
The Negative Volume Index NVI is a cumulative indicator which uses the change in volume for deciding when the smart money is active. This indicator works under the assumption that the smart money is active on days when volume decreases and the not-so-smart money is active on days when volume increases. The volume-weighted average price shows the average price an asset has traded at throughout the trading session when both the price as well as volume are considered. This indicator shows the actual value the security is trading at, so it can signal if the security was bought or sold at a fair price.
Traders use the VWAP for eliminating the noise in the market to get an idea of what prices buyers and sellers are willing to transact. As discussed, Volume indicator analysis is a very important technical parameter to traders and investors. There are many volume indicators but we have discussed some of the common and popular ones. Traders should study them and add them to your analysis tools for improving your trading. Start volume analysis for free in StockEdge app.
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It will be very useful for us in future. Good keep it up and keep writing. Your email address will not be published. Continue your financial learning by creating your own account on Elearnmarkets. Remember Me. Explore more content for free at ELM School. Courses Webinars Go To Site. Home Technical Analysis. January 13, Reading Time: 12 mins read. Before discussing the 9 Types of Volume Indicators let us know what is the significance of high and low volume in the stock market: Importance of High Volume: High volume indicates more interest in the stock and the presence of the buyers and sellers in that stock.
Tags: intermediate technical indicators volume volume indicator. Share Tweet Send. Elearnmarkets Elearnmarkets ELM is a complete financial market portal where the market experts have taken the onus to spread financial education. Related Posts. Technical Analysis. Comments 8 Parasnathcommodity says:. Sakshi Agarwal says:. Hi, We are glad that you liked our post. Thank you for Reading! Ashis Das says:. Hi, We really appreciated that you liked our blog.
Keep Reading!! Juturu Nagamahesh says:. Keep Reading! Hi, We really appreciated that you liked our blog! The Chaikin Money Flow indicator can also be used to confirm the strength of a breakout. If the CMF volume reading is above zero when we break a resistance that is viewed as buying pressure. In this case, the breakout has higher chances of success.
Conversely, if the CMF volume reading is below zero when we break a support level that is viewed as selling pressure. We can also use the CMF volume readings to spot false breakout signals. If we break above resistance but we have negative readings on the CMF indicator that is a potential false breakout. Conversely, if we break below a support level but we have positive readings on the CMF indicator that is a potential false signal.
Usually, in both rising and falling markets during the last stage of the trend, we can see spikes in volume and volatility. These are trade secrets that you wish you had been taught. The Chaikin indicator will dramatically improve your timing and teach you how to trade defensively. Before we go any further, we always recommend taking a piece of paper and a pen and take notes of the rules of this entry method. You can also read a million USD forex strategy. Volume trading requires you to pay careful attention to the forces of supply in demand.
Volume traders will look for instances of increased buying or selling orders. They also pay attention to current price trends and potential price movements. Generally, increased trading volume will lean heavily towards buy orders. These positive volume trends will prompt traders to open a new position. You also need to pay attention to the relative volume —regardless of the raw number of transactions occurring in a trading period. Ask yourself how is the prospective asset performing relative to what was expected?
When the Volume goes from negative to positive in a strong fashion way it has the potential to signal strong institutional buying power. When the volume indicator Forex goes straight from below zero to above the zero line and beyond, it shows accumulation by smart money. Chances are that institutions have more money and more resources at their disposal. Odds can be stacked against you, so if you want to change that, just follow the smart money. Once we spot the elephant in the room, aka the institutional players, we start to look for the first sign of market weakness.
Here is how to identify the right swing to boost your profit. Second, as the volume decreases and drops below the zero level, we want to make sure the price remains above the previous swing low. This will confirm the smart money accumulation. The Volume strategy satisfies all the required trading conditions , which means that we can move forward and outline what is the trigger condition for our entry strategy.
Now that we have observed real institutional money coming into the market, we wait for them to step back in and drive the market back up. When the Chaikin indicator breaks back above zero, it signals an imminent rally as the smart money is trying to markup the price again. We would need to wait for the candle close to confirm the Chaikin break above the zero line.
Here is an example of a master candle setup. This brings us to the next important step. We need to establish the Chaikin trading strategy which is finding where to place our protective stop loss. Never underestimate the power of placing a stop loss as it can be lifesaving. Never use a mental stop loss, and always commit an SL right the moment you open your trades.
Trading with a tight stop loss can give you the opportunity to not just have a better risk to reward ratio, but also to trade a bigger lot size. Last but not least, we also need to learn how to maximize the profits with the Chaikin trading strategy. Once the Chaikin volume drops back below Use the same rules for a SELL trade — but in reverse.
In the figure below, you can see an actual SELL trade example. Any market moves from an accumulation distribution or base to a breakout and so forth. This is how the markets have been moving for over years. Smart money always seeks to mask their trading activities, but their footprints are still visible. We can read those marks by using the proper tools. Here is another strategy on how to apply technical analysis step by step.
Make sure you follow this step-by-step guide to properly read the Forex volume. The Chaikin indicator will add additional value to your trading because you now have a window into the volume activity the same way you have when you trade stocks.
Please leave a comment below if you have any questions about the volume indicator Forex! Please Share this Trading Strategy Below and keep it for your own personal use! Thanks Traders! We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.
Is there a time limit on how fast the smart money build up should be? In your example it only takes a few days. Would a run up of say weeks still be a valid signal? It's shows good , but maths is applicable market, company and is business in and exit or stay safe for future. Do you want consistent cashflow right now? Our trading coach just doubled an account with this crashing market strategy! Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.
You can take advantage of analyzing the strength of a trend based on volume activity. The Forex market, like any other market, needs volume to move from one price level to another. Table of Contents hide. The price needs to remain above the previous swing low. Wait for the candle to close before pulling the trigger. Decreased Volume before a breakout. List of Volume Indicators. Author at Trading Strategy Guides Website. Jordan says:. May 2, at am. Bob says:. April 14, at pm. Roh says:.
February 5, at pm. TradingStrategyGuides says:. February 7, at am. David says:. January 31, at pm. December 19, at pm. Excellent thank you says:. November 25, at am. DOn O says:. May 31, at am. June 1, at pm. April 28, at am.
February 20, at am. February 22, at am. Murugesh says:. January 16, at am. Dexter Naval Pante says:. December 4, at am. February 12, at am. Chigozie Christian says:. August 19, at am. Bornface says:.
When traders focus on volume, they want to spot market secrets. Or, where the smart money buys or sells. Over five trillion dollars in daily Forex volume definitely represents something. Despite such volume, the market is also volatile.
Or, maybe, because of it. This article aims to cover the most important ways to use Forex volume. Therefore, it will deal with the following:. For the Forex trader, volume trading strategies are a bit more complicated than others. As such, the volume indicator the mt4 platform offers is subject to interpretation.
But, there are multiple Forex volumes indicator strategies. What you see in the spot Forex market is not the actual traded volume. It is just the volume traded at your broker. As mentioned above, the Forex volume you see is just the one traded at your broker. It shows the trading activity of investors with that broker. Yet, volume trading strategies are popular among Forex traders. Or, in plain English, it offers an educated guess about the total volume.
Because of that, there are various ways to use volume analysis to spot profitable trades. As a rule of thumb, a volume indicator is typically used together with price analysis. At least the classic one is. As such, rising trading volumes signal bullish activity.
And, of course, falling ones show weakness. Because of automated order types, the market makes different moves than before. Different types of oscillator have appeared as a result. Traders care about volume, but few use volume oscillators. They offer far more valuable information than price oscillators.
Volume oscillators do not travel into overbought or oversold territory like classic ones. As such, their interpretation differs. Yet, all approaches work. Traders care about the information provided by the Forex volumes indicator. It shows potential interest at moments in time. The standard interpretation is to analyze a trend with the volume indicator.
In reality, traders analyze the overall market activity. Not only a trend. For example, one of the best volume trading strategies looks at falling volume while prices increase. As such, traders look to fade that move. Or, to sell short. How else to use the Forex volume?
Another way is to look at bars that stand out of the crowd. Or, that differ strongly from other ones. The volume indicator mt4 trading platform offers can spot the start of a trend. This is a sign of strong demand.
As such, it is no wonder a strong trend started. Such simple volume trading strategies are sometimes enough to end up on the right side of the market. But, is this valid one hundred percent of the times? Because volume is relative to the Forex market, the answer is no. The formula goes like this:. Therefore, it is no wonder that traders look for spikes in volume. They usually come at turning points. It was range bound for several years.
As a result, such an oscillator works with overbought and oversold conditions. Instead, it has a simple line. This line acts as an oscillation level for a respective security. It works well for a Forex pair too. Don Worden wanted to see where the market has a large-lot activity.
Consequently, the TSV differs from the volume indicator mt4 offers. It is more accurate in showing tops or bottoms. One of the best volume trading strategies with the TSV is to look for divergences. That is divergences between the price and the volume indicator.
This is the power of this Forex volume indicator: it shows a breakout before it happens. This makes it difficult to read a chart pattern. Trading has changed. Head and shoulders, double and triple tops, wedges…they are an important part of technical analysis.
But, the Forex market changed since automated trading grew in popularity. Hence, the way a market bottoms or tops has changed too. The classic volume indicator mt4 trading platform offers, is not enough anymore. Volume Spread Analysis, or VSA as it is also known is a powerful trading theory, deals with interpreting candlesticks based on their volume.
The subject is so vast, it is difficult to find a starting point. Retail traders lose money on the Forex market. Most of them. At least when it comes to their first deposit, retail traders lose. Therefore, who makes money? The answer is that the other parties involved make money.
Not the retail trader. Big players. Professional traders play big. So, a fair statement would be that if retail traders did the same as professional traders, they would stand a chance in the Forex market. It starts from the assumption that professional traders leave footprints in volume data. As such, what if one can find them and then trade accordingly? The problem is the same as any volume indicator: is the volume reliable?
Even if not, like in the case of the Forex market, it still offers a glimpse into what professional traders do. VSA as a Forex volume strategy is difficult to understand. It starts from two basic concepts: no demand and no selling pressure. MetaTrader 4 terminal provides a standard volume indicator called "Volumes", which is mostly used for daytrading. Green bar indicates an increase in the number of ticks for the selected currency pair in the market over the last hour as compared to the previous one.
On the contrary, red bar indicates a decrease in the number of ticks for the selected currency pair in the market over the last hour as compared to the previous one. It is currently one of the best, or rather, the most popular volumes indicator designed for MetaTrader trading terminal. The current version differs from the previous one by more powerful customization capabilities and best suits for intraday trading. The given indicator paints vertical bars of volumes in blue, yellow, green, red, and white colors.
Blue bars account for much of the bars in the Better Volume Indicator. Blue bar means that nothing special has happened in the market and volumes of trades match the standard values for their time period. A yellow bar indicates a very low trading volume.
The bar of this kind always has a very low height. A decrease in volumes typically occurs when the current trend is close to its completion. The yellow bar may also mean the end of market retracement. A green bar implies that large volumes are present in the market.
At that, height of the candle corresponding to the green bar is usually small. That is especially the case if large hedge funds close their positions or open new ones. When a green bar appears in the volumes histogram, it signals a possible change in trend direction. That does not mean, however, that price is going to reverse immediately and sharply. The price reversal may happen later due to the effect of the market inertia. A red bar usually stands out for its height and indicates a large domination of buyers over sellers in the market.
This is often true when buyers enter the market quickly. The red bar may be followed by a change in trend direction from bearish towards bullish or a deep bullish retracement. A white bar plays the same role as the red one. The only difference between them is that the former signals a sharp increase in the activity of sellers in the market.
The white bar may be followed by the market reversal to the downside preceded by an uptrend or a deep bearish retracement. The diagram of the Better Volume indicator also includes a moving average which primary purpose is to divide bars of volumes by their height. In conclusion, let us stress that the Better Volume indicator actually provides traders with a basis for developing their own trading system. Despite its simplicity, it appeals to the fundamental data, i.
If you have any difficulties while installing the indicator, please view the detailed instruction. How to Install. Product Info. System Requirements. Product Categories.
Volume indicators are those that account for the volume. For the Forex market 'volume' means number of ticks (price changes) that appeared in the time. Popular volume indicators include three mentioned above—on-balance volume (OBV), Chaikin Money Flow, and Klinger oscillator—as well as the volume price trend. 1. On-Balance indicator: ; 2. Volume RSI: ; 3. Volume Price Trend Indicator: ; 4. Money flow index: ; 5. Chaikin Money Flow Indicator.