Volume indicators are used to determine the interest of investors in the market. A large volume, especially near important market levels, indicates the possible beginning of a new trend, while a low volume implies uncertainty and / or disinterest of traders in a particular market.
Information about the volume on the market Forex represents the total amount quotes for a certain period of time.
Forex Volume Indicators:
- Acceleration bands
- Market Promotion Index
- Chaikin's Cash Flow (CMF)
- Accumulation/distribution indicator
- Volume Oscillator (PVO)
- Demand index
- Balance volume (OBV)
- Cash Flow Index (MFI)
- VWAP (volume-weighted average market price)
Methodology for using volume indicators
An increase in volume indicates a growing interest in the market, so the main trend may strengthen or a new one may begin;
A decrease in volume means that interest in the market is decreasing, therefore, the trend may reverse, or a temporary consolidation may form on the market;
A sudden and vigorous increase in volumes may signal an upcoming reversal, while a gradual decline in volumes may still be supported by rapid price movements.