How to read volumes in forex

Apply moving averages forex indicator into the volumes histogram. You can use default period 14 of EMA. Single bar in volumes histogram holds less value than a developement over a couple of bars. We will look for trends – growing (above average) or decreasing volume (below average) and volume extremes.

For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

 

High, or growing volume confirms the trend. If price reaches new high/low (local extreme) and it is accompanied by extreme volume, it is more than likely that price will test this new price level in the future.

Trend continuing on low or decreasing volume can be considered weak. Price may begin to range before reversal. Trend may also continue after ranging period, based on fundamental news that will allow influx of new traders supporting previous trend.

 

Looking for weakness in volume, can be applied when we wish to enter on the price correction. Corrections against the trend on low volume are great entry opportunities. Find weakness in corection for impeccapble timing of your positions in forex.

 

Always consider volumes together with candles

Compare effort vs. result. Effort is activity that is measured by volumes forex indicator. Results of effort are clearly visible on the chart as price candles (bars).

 

Wide full bodies of candle in the direction of the trend signalize very little selling into the uptrend and therefore its health and strength.

 

In other hand narrow candles with extreme volume may signalize trend reversal, as the activity included increased countertrend activity.

 

To read volumes correctly, is the skill hard to master, but once mastered rewards are substantial.

Please reload

ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com