Before proceeding directly to the description of the indicators, you should understand what the volumes in the Forex market are. The fact is that for futures, for example, the volume of daily transactions is a very specific concept, which can be regarded as a daily turnover. It is quite another thing – the Forex market, which has two features: – the market is not concentrated in a particular place, and the majority of transactions are made via the Internet from various points of the planet; – when trading using credit funds (leverage), which makes it virtually impossible to count the real amount of currency that enters or leaves the market.
Thus, the real volume of transactions in Forex is impossible to calculate, but this does not mean that the use of relevant indicators should be discarded, since they can still provide important information, including on the change in the direction of price movement.
So, previously the so-called tick volume was actively used, which suggested counting the number of ticks (price changes per unit) for a certain period of time. Such an indicator was developed based on the fact that any price fluctuation is related to the market entry of a relatively large amount of currency that can influence the price in the direction of its increase or decrease.
Of course, the tick volume is in no way connected with the actual volume of transactions, but in some cases it can be used to obtain information about the expected continuation of the trend movement or its reversal.
Which indicator is best to use?
At the same time, it should be said that today other indicators are much more widely used, namely, Volume, which is built into standard MetaTrader 4, and Better Volume, as well as a number of other modifications.
It is believed that the volume of transactions should increase during the price movement up or down (trend) and decrease during the correction. Moreover, the volume graph will reach a maximum at the peak of the trend movement and a minimum at the peak of the corrective movement. This data can be used to assess the continuation of a trend or correction, assess the state of the market, and make the right decision to open a position in one direction or another.
It should be noted that the Forex volume chart is difficult to use, but it can provide some information. Therefore, close attention should be paid to the indicators, but they should never be used separately or as part of trading systems where it is possible to conduct a more accurate analysis of the trend movement.