From the technical point of view, the difference between them is that tick volumes display the total number of changes in price over a particular period of time. For example, if price changes 120 times during an hour, tick volume will be equal to 120 while the number of contracts traded is entirely different. 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.e. trading volumes that always have an immense impact on price direction, forming and fading of trends.
There are two ways in which the On Balance Volume trend can be broken. The first occurs when the trend changes from a rising trend to a falling trend, or from a falling trend to a rising trend. As you can see, they are virtually identical to each other.
Forex Factory Calendar (FFCal) Indicator
Non-confirmations can occur at bull market tops or at bear market bottoms . The basic assumption, regarding On Balance Volume analysis, is that OBV changes precede price changes. The theory is that smart money can be seen flowing into the security by a rising OBV. When the public then moves into the security, both the security and the On Balance Volume will surge ahead. Indicator displays increase and decrease of trading activity.
Highlights potential price reversal points on the chart based on winning/loss ratio. The ratio of open positions of traders shown as a chart. The current version differs from the previous one by more powerful customization capabilities and best suits for intraday trading. Every forex trader constantly searches for the answer for this question…. Oscillators are an important part of technical analysis. This article discusses one of the most sought after technical analysis…
Tick vs. Futures Volumes
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. The term “volumes” usually refers to the total number of contracts traded for a particular instrument and over a certain period of time in the financial markets. Forex Volumes Indicator represents a histogram showing the number or the volume of trades made in the Forex market over a certain period of time .
The OBV is in a rising trend when each new peak is higher than the previous peak and each new trough is higher than the previous trough. Likewise, the On Balance Volume is in a falling trend when each successive peak is lower than the previous peak and each successive trough is lower than the previous trough. When the OBV is moving sideways and is not making successive highs and lows, it is in a doubtful trend. The diagram of the Better Volume indicator also includes a moving average which primary purpose is to divide bars of volumes by their height. The given indicator paints vertical bars of volumes in blue, yellow, green, red, and white colors.
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. It is currently one of the best, or rather, the most popular volumes indicator designed for MetaTrader trading terminal. However, this approach is applicable only to the stock market. As for the Forex market, things look a little different out there.
MetaTrader 4 and MetaTrader 5 terminals provides a standard volume indicator called «Volumes», which is mostly used for daytrading. When the OBV changes to a rising or falling trend, a «breakout» has occurred. Since OBV breakouts normally precede price breakouts, investors should buy long on On Balance Volume upside breakouts. Likewise, investors should sell short when the OBV makes a downside breakout. The second way the OBV trend can be broken is if the trend changes to a doubtful trend and remains doubtful for more than three days. Once a trend is established, it remains in force until it is broken.
This section presents the most popular Forex volume indicators for the MT4 platform. Use the volume indicator in combination with other technical analysis tools to get the best trading results and price momentum. The Volume MT4 indicators are useful tools for any forex trader who wants to make more informed trading decisions. 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.
Most forex traders are trend traders and follow the trend using… Forex day trading is the most popular method of retail forex… The core of the technical analysis is to identify the trend… Pivot points are an excellent leading indicator in technical analysis. Technical analysis is the key to profitable forex trading. If the securitys price movement precedes OBV movement, a «non-confirmation» has occurred.
The indicator, which Joseph Granville came up with, is pretty simple. When the security closes higher than the previous close, all of the days volume is considered up-volume. When the security closes lower than the previous close, all of the days volume is considered down-volume. 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.
It is impossible to track the total trading volume in terms of standard lots so traders use the so-called tick volumes. 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. On Balance Volume Technical Indicator is a momentum technical indicator that relates volume to price change.
As a forex trader, you have only three things to figure… The sum of all Sell and Buy orders held by retail traders. There is also an alternative indicator with additional features. These are some of the best indicators to be based on…
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. The Volumes indicator’s description states that the value of volume corresponds to the number of ticks within a price candle. Therefore, if H1 timeframe is enabled in a terminal, a bar displayed on the Volumes indicator’s chart indicates the number of ticks per hour.
The indicator displays levels on the chart with the maximum volume of Stop Losses set by other market participants. The bars of the Volumes indicator with enabled standard settings may be colored in green or red. So far, real volumes MT4 and MT5 indicators can be found only at some small private projects. Open trades and pending orders of retail traders are displayed as a two-sided histogram. 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. For example, if 20,000 contracts were sold and bought during a day, people say that trading volume amounted to 20,000.
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. Now let’s proceed to the decryption of the Better Volume indicator’s signals.