Skip to main content

The volume indicators in Forex

By

The volume indicators in Forex



General rules for all volume indicators Forex:
1. If trading volumes are reduced, the interest for the currency pair decreases, possible short stabilise prices or a change in trend (trend).
2. When you increase the volume of trade transactions should expect an increasing interest in the current dynamics of the exchange rate, the trend may intensify and turn around.
3. There are situations where a gradual decrease in volume leads to a drastic price change.
4. In the presence of the peaks of the volumes of a possible trend reversal.

As you can see, the signals are still obscure. To improve the accuracy of prognosis, it is necessary to use additional indicators - for example, moving (Moving Average).

In the terminal MetaTrader 4 there are 4 types of indicators: Accumulation/Distribution, Money Flow Index, On Balance Volume and Volumes (Insert menu gt; Indicators gt; Volumes). Let us learn more about the features of each of them.





Accumulation/Distribution (A/D)


The name of the oscillator is translated as “accumulation/distribution”. When the analysis takes into account only the direction of the curve of the oscillator, the numerical values are not important.


Money Flow Index (MFI)


This oscillator is very similar to relative strength index (RSI), but takes into account the volumes (teak). MFI is good to use as an indicator to determine the strength of the cash flows invested in a particular asset or derived from it.

By analogy with RSI, to analyze Money Flow Index important 2 signal - divergence and the movement curve of the oscillator to the overbought (80) or oversold (20).


On Balance Volume (OBV)


Consider the volume and price changes, which accompany this volume.

Consider only the direction of the curve, not its value (level).

In most cases, the indicator OBV follows the price, repeating her movements. If there is divergence (divergence) indicator with the price, we can expect a reversal of the current trend.

The graph of the oscillator OBV can be applied as trend indicators and other oscillators.


Volumes


The volume in this case is the number of contracts for all trading transactions for a certain time interval. Low volume means that investors have not decided this is the case for consolidation. If most of the players are confident in their abilities and the positive dynamics of prices, volumes will grow.

If the trend is up, Volumes will increase in periods of growth rates and decrease in the period of its decline. In a downtrend all the way around - volumes grow in periods when prices are falling.

In General, you can use any of the above described volume indicators, but not to clutter the graph of their accumulation. After the comparative analysis, we can conclude that in the main data the volume indicators very similar, however, they are quite useful for analyzing the current market situation.


Remember that the profitability of trade is highly dependent on your chosen broker!



Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

Price action - trade without indicators

By
Price Action - trade without indicators Take a look at the picture. Regular schedule, is not it? As we know, the price moves in waves (zigzags). And if the start price movement, the trend in this direction is maintained. If a trader enters during a small correction (rollback prices against the main trend) - a cost-effective entry point. Connect the top and bottom. Now you will notice the trend movement, first down, then up. In the first half of the graph, you can search for points of entry for sale at rollback prices up, the second - to buy when the price moves down. 2. Price Action - look at the shadows of candles What is the shadow of a candle? This is the price levels of the Open and / or Close. If the shadows are long, it is possible to understand that the price met resistance, then turned around and headed in the opposite direction (in the direction of the candle body). This suggests the market moves too fast and strong players who have managed to deploy it. If we want to make m...
Post a Comment
Read more

Fibonacci levels in Forex

By
Fibonacci levels in Forex Let us presume that the Fibonacci levels (UV) today is if not every second, every third or fifth successful trader. Themselves UV are not a trend indicator, but allow you to more clearly see the big picture from what level the price will jump back to what level will go etc. First, let's find out the origin of this tool. Fibonacci levels - the origins In the XIII century, the famous Italian mathematician Leonardo Fibonacci was discovered a simple sequence of numbers: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144. Each number in the sequence is the sum of two previous ones (except for 1 and 1, of course). For example, 2 is 1+1, 13 = 5+8 etc. Mathematician discovered that when dividing two adjacent numbers (smaller to larger) the result is always the same (rounded). For example, 21/34 = 0,618, 55/89 = 0,618 etc. The last pattern - if we divide any of the numbers on the number following after him +1, we obtain the relation, close to 0,382. For exampl...
Post a Comment
Read more

Professional Forex.

By
Professional Forex. Secrets of professional traders Today trading conditions almost all Forex brokers contribute to the fact that all new traders are in the same starting conditions. Players are provided with the most modern technical tools for trade - convenient terminal (MetaTrader), multiple indicators, scripts, Forex and advisors. In the terminal there are many functions - from the creation of new indicators to fully automated trading. Thus, the major players and private traders trade in identical conditions. But the technical potential is only part professional Forex -of trading. Many inexperienced players pay too much attention to current events, losing sight of the overall trend. Professional highlights the most significant events in the great flow of information and not sprayed. Trader-professional always has: ? the long-term goal. ? a clear plan of how to act when the price moves in one direction or another. ? record all of your transactions (with justification - why bought it...
Post a Comment
Read more