Индикатор Форекс Volume Ticks Separate

Trading volume is typically applied to assets that are traded via exchanges, including (but not limited to):

Trading volume usually shows several things, including how many transactions have occurred, and the monetary value of the quantity that was bought or sold. This indicator is most typically used with stocks and shares. However, trading volume is also important in Forex, or in trading any other asset.

The liquidity of a currency tells you how much of it is available in the market right now and how easy or difficult it will likely be to sell or buy.

When trading currency pairs, the liquidity dictates how easily you can open and close positions at the price you want.

Advanced charts are available in Forex which usually show the trading volume as a bar chart underneath the price graph. Most platforms have tools available so you can find the trading volume for a currency pair for a specific date range – such as the previous week or day.

There are several key factors which affect trading volume.

• Economic Information & Data: Governments, financial institutions, and other important companies often make regular economic data reviews. These reviews and publications often cause fluctuations in trading volumes.
• Important News: Real-world events and news have a huge impact on this figure. For example, a declaration of war in a country could lead to a surge in activity and deals as people expect that the nation’s currency could potentially collapse in value.
• Technical data: Lastly, it is also affected due to the various technical tools and trading functions Forex traders use. For example, many people use stop loss orders that trigger at certain values.

Advantages

Trading volume can be an excellent indicator. It allows you to gain insight and a clearer understanding of current market conditions and trends for specific currency pairs. You can, therefore, use volume to aid your decision-making process of when to buy and sell.

Disadvantages

While trading volume is an excellent tool for Forex trading, it also has some limitations. This is often why traders are cautious to rely on it for decision-making.

For example, let’s say you want to look at the trading volume of GBP/USD. The reality is that you are only seeing the volume in relation to the Forex broker or exchange you are using. This may well not be an accurate reflection of the global trading volume in that currency pair.

There are several types of volume which can be used as an indicator in Forex trading. They can be outlined as follows:

Tick Volume

This is one of the most common indicators and most exchanges and brokers offer this metric. Tick volume relates to market activity and participation. A single tick is equal to a single change in a currency pair's price either up or down. Tick volume is very easy to measure, you just need an indicator that counts the number of ticks – movements in the price – over a period. Of course, there is no guarantee that tick volume matches actual volume.

VWAP (Volume-Weighted Average Price)

This is used to show the average price of a currency pair over a hour period, weighted by volume. This produces a true average of where the pair changed hands, by weight, not time.

OBV (On-Balance Volume)

This is used to show bullish and bearish trends for a specific day. OBS can also be used to identify breakouts, and to show price movements.

MFI (Money Flow Index)

This technical indicator is used to show if a specific currency or pair has been oversold or overbought. If the MFI index is below 20, it's oversold, whereas if it's over 80, it's overbought.

A relatively high trading volume means several things:

1. Most obviously, it means that a lot of traders are buying and selling this currency pair. More volume equals more trading activity.

2. A high trading volume generally means that the currency pair has greater liquidity. More people are buying and selling, as a result, you are far more likely to be able to close and open the position you want – and more quickly.

3. Higher trading volumes also usually mean that a trend is either starting or is already in motion. You can use the trading volume to gauge whether the momentum of a trend is continuing or declining. For example, if the volume is increasing, you can see that the current trend is continuing. Just be aware that a high trading volume doesn’t automatically mean high currency prices.

Generally, a high trading volume is beneficial. It means that you can usually buy and sell quickly and do not end up stuck in a poor trading position. You should also be aware, however, that currency prices often fluctuate in price a lot during volume increases.

A low trading volume also has several important meanings. Firstly, in contrast to a high volume, it means there are fewer traders buying and selling that currency pair.

Secondly, a low trading volume usually means low liquidity. This is not great for Forex trading. Low liquidity means that there are fewer available traders and trades to potentially buy from or sell to. As a result, you may struggle to close positions and may get stuck in trades. This could ultimately mean that you must buy or sell for less or more than you originally anticipated. However, the good news is that Forex liquidity is so relatively high that even when volume is low, it is rarely a problem getting an order filled. The problem is more likely to be slippage than requotes.

As there is no centralized volume data available in spot Forex, volume is often overlooked or misunderstood by Forex traders. This is a shame, as it can be a useful technical tool, especially for identifying major reversals, where the risk reward potential is high.

The difficulty Forex traders face is in getting access to reliable volume data in a decentralized market. There are three main ways Forex traders can do this:

1. Use Forex futures volume data, which is publicly available. This is a large, centralized exchange so the data should be quite reliable.

2. Many brokers offer clients access to their own volume data. However, this is just the data from one broker, so unless the broker is very large, it may not be very useful, and even then, it is somewhat suspect.

3. Use a tick volume indicator on a major price feed. Some studies have shown a correlation between tick and real volume in financial markets, but this remains questionable. For example, it is possible for price to fluctuate little from second to second despite huge volumes of orders being processed.

The best course of action is probably to use Forex futures volume data.

Is low volume bullish or bearish?

Low trading volume typically indicates the continuation of a trend, or consolidation.

Yes, trading volume is important. It is linked closely to liquidity. For example, a higher trading volume usually means greater liquidity which is beneficial. Also, volume can help identify trends and their likelihood of continuing.

What is considered high volume?

Generally, high volume is volume 25% or more above the average of the previous two weeks.

What is considered low volume?

Generally, low volume is volume 25% or more below the average of the previous two weeks.

Traders leverage tick volume to distinguish between genuine market movements and noise, particularly during low-liquidity periods. This indicator enhances decision-making by offering a nuanced understanding of trading pressure.

In this article, we will discuss everything about the tick volume indicator.

What is tick volume?

Tick volume refers to the number of price changes (ticks) that occur in any currency pair during a given time period, such as a minute or an hour. Unlike traditional volume measurements, which count the total number of shares or contracts traded, tick volume focuses on the number of price changes, whether the price moves up or down by the smallest increment.

The tick volume indicator is commonly used in technical analysis to assess the level of market activity and the intensity of trading pressure. It is especially useful in markets where traditional volume data may be limited or unreliable. Traders and analysts use tick volume to confirm trends, identify potential reversals, and gauge the strength of price movements.

High tick volume during price advances or declines signals strong market interest, indicating the robustness of the ongoing price movement and vice versa.  

How to calculate tick volume in forex?

1- Choose a time frame: Decide the time frame for which the trader wants to calculate tick volume. Common time frames include one minute, five minutes, 15 minutes, and so on.

2- Count ticks: For each price change (up or down) within the chosen time frame, count one tick. Traders can do this manually or use trading software that provides tick volume data.

3- Sum up the ticks: Add up the total number of ticks for the entire chosen time frame. This total represents the tick volume for that specific period.

4- Repeat for desired periods: If a trader wants to analyze tick volume for multiple time frames, repeat the process for each period of interest.

How to use the tick volume indicator?

Utilizing the tick volume indicator in forex involves strategic integration into the trading analysis to glean insights into market activity and potential price movements. 

Confirming trends 

To confirm trends using the tick volume indicator in forex, it is essential to pay close attention to the volume of price changes. During uptrends, a notable increase in tick volume is observed, indicating heightened market activity and reinforcing the strength of the upward trend and vice versa. Monitoring these volume dynamics is fundamental for traders seeking validation of existing trends.

Identifying reversals 

Traders should be vigilant for substantial changes in tick volume, especially after extended trends. Such changes often signal a shift in market sentiment, providing early indications of a possible reversal. With this information, traders can adjust their strategies promptly to capitalize on emerging opportunities or mitigate risks associated with market reversals.

Breakout situations 

During breakout situations, the tick volume indicator becomes a key tool for assessing the strength and validity of the breakout. Heightened tick volume signifies increased market interest, affirming the credibility of the breakout. Traders can use this confirmation to make more informed decisions, as the substantial volume during breakouts supports the notion of sustained market momentum in the direction of the breakout.

Divergence analysis 

Divergence analysis involves a nuanced comparison of tick volume with price movements to identify potential shifts in market trends. By closely examining the relationship between tick volume and price, traders can gain insights into changing market conditions. This analytical approach enhances the ability to anticipate trend shifts, empowering traders to adjust their positions proactively based on the evolving dynamics of the market.

Filtering signals 

By relying on tick volume for confirmation, traders can enhance their confidence in trading decisions. This filtering mechanism ensures that signals are validated by the underlying market activity, contributing to a more accurate interpretation of trading signals and reducing the likelihood of false or misleading indications.

Assessing market strength 

Assessing market strength is a critical aspect of using the tick volume indicator. High tick volume during price advances or declines indicates robust market interest, reinforcing the strength of the ongoing price movement and vice versa.

Integration with price patterns 

Integrating tick volume analysis with classic price patterns provides a comprehensive approach to decision-making. By combining insights from tick volume with established price patterns, traders can enhance the reliability of confirmation and divergence signals. 

Risks of using the tick volume indicator

• Sensitivity to market noise: The tick volume indicator is sensitive to market noise, particularly during low liquidity or erratic price movements, potentially producing misleading signals. Traders must exercise caution to avoid decisions based on noise.
• Not applicable to all markets: Tick volume may not be universally applicable, especially in less transparent or centralized markets like certain over-the-counter (OTC) markets. 
• Potential for manipulation: There is a risk of tick volume manipulation in specific market conditions, such as during extended trading hours or low liquidity. Traders should be cautious and complement tick volume analysis with other indicators for signal validation.
• Overemphasis on short-term fluctuations: Tick volume analysis may lead to overemphasizing short-term fluctuations, potentially causing impulsive reactions to transient market movements. It emphasizes the importance of considering other indicators for a balanced trading approach.

Use tick volume indicator for better forex decisions 

The tick volume indicator helps identify market strengths and divergences, which is crucial for strategic decision-making in trading. When used judiciously alongside complementary indicators such as Moving Averages and Bollinger Bands, the tick volume indicator enhances precision, contributing to more informed trading decisions.

Disclaimer:

• All material published on our website is intended for informational purposes only and should not be considered personal advice or recommendation. As margin FX/CFDs are highly leveraged products, your gains and losses are magnified, and you could lose substantially more than your initial deposit. Investing in margin FX/CFDs does not give you any entitlements or rights to the underlying assets (e.g. the right to receive dividend payments). 𝖢𝖥𝖣𝗌 𝖼𝖺𝗋𝗋𝗒 𝖺 𝗁𝗂𝗀𝗁 𝗋𝗂𝗌𝗄 𝗈𝖿 𝗂𝗇𝗏𝖾𝗌𝗍𝗆𝖾𝗇𝗍 𝗅𝗈𝗌𝗌

About The Author

Ben Clay

Ben Clay is a skilled and experienced CFD trading professional and writer with 14 years of experience in the industry. As a part of the Blueberry Markets team, Ben is known for his ability to simplify complex concepts into insightful and engaging content. His profound understanding of CFD trading, coupled with his exceptional communication skills, has established him as a trusted contributor who delivers insightful information to a wide audience.
Expertise: Forex and CFD trading