What is Volumes?
The “Volume indicator” is a technical analysis tool used to track the trading volume of various securities over a specific period. For example, if you are viewing a chart on the H1 timeframe, it will display the trading volume that occurred within one hour.
How to enable Volumes
To enable Volumes on MT4 or MT5, go to Insert > Indicators > Volumes > Volumes.
You can customize the color settings as desired.
Characteristics of Volumes
Volumes is an indicator under the Volumes category that shows the trading volume of a particular security. It appears in a separate window below the price chart and displays volume in the form of bar charts. A tall bar indicates high trading volume, while a shorter bar indicates low trading volume. A green bar means that the trading volume is higher than the previous bar, while a red bar means the volume is lower than the previous one. The Volumes indicator displays data based on the selected time frame—such as daily, hourly, or minute intervals—and each bar represents the total trading volume during that specific period.
How to trade using Volumes.
The way to use the Volume Indicator is different from many other indicators that are used to signal entry or exit points. Instead, it is used to measure the volume of buying and selling activity, which can be used to support trading decisions in the following ways:
1. Confirming the price trend:
Higher trading volume can help confirm whether the price trend is moving up or down. For example, if there is high volume while the price is moving, it helps to confirm that the current trend is clear and reliable.
2. Assessing the market condition:
Trading volume that is higher or lower than usual can help indicate the level of investor interest and confidence in the market.
3. Predicting price movements:
Observing periods with sufficiently high trading volume helps in predicting future price movements.
4. Assessing the overall market condition:
Observing higher or lower than usual trading volume in a given period can help evaluate the current state of the market.
