Can we use volume in forex trading


The most effective strategy for using a forex volume indicator is to use it in conjunction with key trading levels and price action. Forex volume can help paint a clearer picture of what is going on with price and what might happen in the future.

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  • Find the Right Tools for the Job. …

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What is FX volume?

Set volume using the + / – (upper right of the machine) to 75 and then adjust to your preference.

  • On the top tab go to Settings → Page 3 → Pinball Settings
  • Set Master Volume to 40.
  • Set FX Volume 25.
  • Set Music Volume 3, this may not sound right, but it does work.
  • Move Down to Reset All Tables to Default and click the button.
  • When prompted if you’re sure, select Yes.
  • All tables will be reset and the haptics set to very low/low. …

More items…

What is forex volume?

Volume in forex merely denotes the quantity or how much of a market or pair is traded in lots or contracts. However, it’s often a misunderstood topic because forex is an entirely decentralized market. No one can see how much volume every trader in the world has for a particular pair.


Can you use volume on forex?

The trading volume is usually higher when there is a significant price fluctuation in the market. Volume can be used to measure stocks, bonds, options, futures, commodities, and forex. However, volume is used most often in stock trading, where it shows the number of shares that are being traded.

Can you trade based on volume?

Key Takeaways. Volume measures the number of shares traded in a stock or contracts traded in futures or options. Volume can indicate market strength, as rising markets on increasing volume are typically viewed as strong and healthy. When prices fall on increasing volume, the trend is gathering strength to the downside.

How do you know if buying or selling volume?

You can distinguish buying volume from selling volume based on whether a transaction occurs at the bid price or the ask price. Changes in volume can give traders short-term indications of where the price might go next.

How important is volume in trading?

Key Takeaways Investors often use trading volume to confirm a trend’s existence or continuation, or a trend reversal. Trading volume can provide investors with a signal to enter the market. Trading volume can also signal when an investor should take profits and sell a security due to low activity.

Why is forex volume so hard?

Calculating forex volume is made a little harder because there is no centralized exchange. Forex is a decentralized OTC product. For that reason, volume that takes place is based only on the individual pair on a given exchange at that point in time. Which is effectively just broker data.

Is volume important in forex?

Forex volume is probably one of the most misunderstood, yet most important tools traders have at their disposal. In other financial markets such as stocks and futures, traders almost exclusively use volume to make trading decisions, however, in forex markets, traders are often quick to overlook what can be an incredibly useful tool.

How accurate is trading volume?

Forex market is decentralised. This means that people can buy and sell between each other without any intermediary.

Three useful volume indicators

Trading volume can be measured in a variety of different ways. Check out these three useful indicators that can incorporate volume into your trades.

Keep volume trading simple

If you decide to trade volume, remember to keep it simple! Simple trading strategies are easier to repeat and there are fewer things that can go wrong.

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Why is volume trading important?

Volume trading is one of the best strategies in forex because the quantity of an instrument moved in a given time reflects the buying and selling pressures in the market. As such, the strategy is ideal for detecting trends and price reversals. Traders can also use volume to see false breakouts, as well as exhaustion moves.

Why do you need to hold on to volume when price is climbing?

If the price appears to be climbing, but the volume looks weak, you better hold on because you could be heading into a bull trap. If the price rises and volume enlarges, then that is an explicit confirmation of trend formation. Use volume to detect exhaustion moves.

What does tick volume mean?

Tick volume is where 1 tick equals 1 trade, this means if you see a large volume spike in the market its telling you that a lot of traders either placed trades during the that time period or they closed trades. The true amount of volume cannot be known in the forex market because of how many different exchanges there are all over …

When the news first gets released and the market is trying to establish a direction, what happens to the volume?

At the beginning, when the news first gets released and the market is trying to establish a direction, most of the volume will come from the traders who had trades placed in the opposite direction in the market before the news came out.

Does understanding volume help you read the market?

It’s easy to see how having a simple understanding of volume allows to read the market much better, someone with no knowledge of how the banks trade would not of been able to recognize what’s taking place during times when there’s high volume.

Why is volume important in trading?

Volume is mostly useful because of its ability to draw attention to unusual purchases or sales. The price usually moves from periods of low-volume activity to high-volume activity.

What is volume in trading?

Volume is like the air we breathe. Without volume, it is impossible to make the right trading decision. Volume is what makes prices move forward and creates trends . If you are a day trader, trend trader, or swing trader, you need volume to see the price move. Without volume, we can’t make a profit.

How does an oscillator measure volume?

The oscillator measures volume as the difference between two moving averages: fast moving average, usually a 14-day period; a slow moving average, usually a 28-day period. The difference between the two moving averages is then displayed as a sinusoid line, expressed as a percentage.

What is volume oscillator?

Volume Oscillator is part of the family of oscillator indicators. Volume tracks purchases and sales over a period of time. An oscillator is a technical instrument that has the form of sine waves. These waves will change over time above and below the center line.

How does volume indicator work?

The volume indicator can’t measure how many contracts are sold on Forex, but it can calculate how many ticks the price moves up or down in any time period. If the market has a high trading activity, the number of ticks per second will increase, which indicates an increase in the volume of Forex.

Is volume used in forex?

Volume, open interest, and price are key components in trading decisions. But unlike stock and futures trading, Forex volume is rarely used in trading. And there is a good reason for this. The currency market is a decentralized market where trading operations are carried out outside the exchange.

Why does volume trading continue to work?

The Volume Trading Strategy will continue to work in the future because it’s based on how the markets move up and down. 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 100 years.

What is volume analysis?

On the one hand, volume simply measures how much a given currency pair has traded over any given period of time. Volume is used to measure the strength and weakness of a trend.

What is the largest and most liquid market in the world?

The Forex market is the largest and the most liquid market in the world, with 6 trillion dollars worth of transactions performed on a daily basis. If you can master volume analysis, a lot of new trading opportunities can emerge.

Who developed the Chaikin Money Flow?

The Chaikin Money Flow indicator was developed by trading guru Marc Chaikin, who was coached by the most successful institutional investors in the world. The reason the Chaikin Money Flow is the best volume and classical volume indicator is that it measures institutional accumulation-distribution.

Can CMF volume be used to spot false breakouts?

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.

Do retail traders move the market?

But retail traders are not moving the markets, their volume is totally meaningless in a such a big marketplace. And of course, the institutional traders that are responsible for the volume that matters don’t trade at a retail broker. They’re on Reuters, EBS or just trading directly with other banks/institutions.

Is forex trading decentralized?

But Forex trading is decentralized, OTC trading. There is no single place to look at to see the actual volume of a currency pair. That’s why it’s often said that the volume provided by your broker is pretty useless. All you would see is the trading volume that happened at your broker, either between clients and liquidity providers in an ECN …

Does Oanda use Reuters?

This means that whenever there’s a new quote from the source they’re using (Oanda probably uses Reuters and other similar data feeds, Dukascopy offering ECN trading probably use the quotes of each of their liquidity providers) that would make the volume go higher.


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