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Forex Volume Indicators

The volume indicators are similar to the oscillators, because they both indicate whether there is some movement in the market or not. However, the volume indicators illustrate the investors’ interest in the market – high volume means high interest and a possible strong trend or reversal, while low volume indicates insufficient interest in the market.

To be a little bit more specific, if you observe high volumes in a given market, then either a strong trend or a rapid reversal is coming. If you notice low volume, then the market is either preparing for consolidation (sleep mode), or a possible reversal is on the way. The traders are hunters, they look for prey and blood – profitable trades, that is why you have to keep an eye on the traders and adjust your strategies properly.

  • Forex Volumes

    Volume Indicator

    Many traders believe that the Volume indicator in Forex is as important as the price itself. All we are going to say is that this indicator is definitely a valuable member of our trading strategy.

  • Forex OBV

    On Balance Volume - OBV

    The On Balance Volume in Forex illustrates the trend’s direction and strength. The OBV’s most important characteristic is that its algorithm is based on the previous volume values.

  • Forex MFI

    Money Flow Index - MFI

    The Money Flow Index is a valuable asset for many experienced traders in Forex, because the MFI illustrates the buying and selling pressure in the market.

  • Forex ADL

    Accumulation / Distribution - AD

    The ADL or Accumulation Distribution Line is another great volume indicator in Forex that illustrates the price’s trend and strength; you can also make use of the possible divergences.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.