Volume trading on Forex is used by many successful traders today. If this is not your first day on the market, then you probably already know that volumes play a very important role. Before we begin to directly describe the features of Forex trading using volumes, it is worth making a short introduction.

What is trade volume

Trading volume is the number of transactions by market participants over a certain period of time.

If there is a buyer and a seller, then the transaction between them is called a transaction. 1 purchase/sale transaction is called one transaction. Market analysts constantly monitor transaction volumes in order to make the correct forecast.

Trading by volume on Forex video:

Forex trading volume

There is no centralized exchange in the Forex market. Many provide data on the transaction account of only one broker, but they do not display the total number of transactions on the Forex market. The most accurate data can be obtained by using indicators from the most popular brokers, where the most transactions are made.

Stock trading volume

It is worth noting that volume in stock markets is expressed somewhat differently. Volume is determined by the specific number of shares exchanged. So, for example, if the seller sold 10 shares, then the volume will be 10. If after some time the buyer sells 10 shares, then the total volume will be 20.

Volume is determined depending on the type of stock and the market on which it is listed. Stocks with low sales volume are illiquid, while stocks with high sales volume are liquid. A sharp increase in volume can serve as a signal for making a decision. If volume begins to increase sharply on a certain stock, traders begin to act, following the majority. If neither the bulls nor the bears can influence the price rate, then it is best to abandon the transaction to avoid losses.

If a trader notices a sharp increase in trading volume, while a sharp jump in price is observed on the chart, then this is a clear signal that it is time to open orders in the direction of the trend. A sharp increase in volume with a stable trend movement indicates its stability, which is an excellent condition for entering the market.

Forex trading using volumes

Volumes are widely used to analyze the current market situation; they are used to create a variety of indicators and balanced volume lines.

Depending on the degree of importance, volumes can be divided into the following types:

1. Maximum volumes, also called contract quantities.
2. Weekly, which is the sum of past and present volumes.
3. Daily volumes.
4. Hourly volumes.

Most often, volumes are displayed as a histogram in a special window located under the price level. With their help, you can identify an increase or decrease in activity in the foreign exchange market. There is also such a thing as accumulation of volumes, which means a certain time interval during which all orders are concluded in a certain price range.

Practice shows that when the price level increases, the volume also increases, and when they decrease, it decreases. If the market situation contradicts the statement described above, then the trend will soon change.

Forex trading using volumes makes it possible to identify market sentiment with a high level of accuracy, as well as predict changes that will occur in the market in the future. Since the price level changes due to the constant conclusion of sell and buy orders, information about volumes allows the trader to more accurately analyze the situation on the market, as well as make accurate forecasts.

Volume trading is a unique trading technique based on order volumes. This technique can be used in both the foreign exchange and stock markets.

In order to competently trade by volume, you need to learn how to use tick history, which includes information about the maximum and minimum price values, as well as the prices for creating and closing orders.

Each tick contains information about one order, its price and volume. Using ticks, you can obtain data on the total volumes of transactions that were created during one time at one price.

You also need to pay attention to resistance/support levels. Levels with larger volumes are more important. The most vulnerable areas are considered to be those in which support/resistance levels have minimal volume, since in these places it is much easier for the price level to overcome them.

Another important component in Forex volume trading is delta, which is the difference between sales and purchases. If the delta is positive, then there are more bulls in the market, if it is negative, there are more bears. Delta can be calculated for one candle or for an entire interval.

Delta is determined by the following formula:

Delta = ASK – BID

Where ASK is the volume of all transactions that took place at the Ask price (for buyers).

BID is the volume of all transactions that were completed at the Bid price (for sellers).

Currently there is very little information about the delta. We will talk about this in more detail another time; for this I will write a separate article.

What is the difference between market volume and tick volume?

In order to trade by volume, you must first learn to distinguish between real volume and tick volume. For clarity, I suggest you consider an example. Let’s say there are 10 traders trading on the market at the moment. All traders use the most effective strategies to achieve the highest possible profits. Let’s assume that 9 traders have $100 on their real account and only 1 has $900. The wealthiest trader decides to open a trade with all his savings, the other 9 market participants sell him $100 each. As a result, the number 10 will appear in the market volume indicator window, which will indicate the total number of completed transactions, that is, 9 for sale and 1 for purchase.

If our rich man decides to close his order, the indicator will display a sale of $900. At this moment, 3 traders appear on the market, 1 of whom buys 300, another – 400 and the third – 200 dollars. As a result, the indicator window displays the number 4, that is, 1 sell trade and 3 buy trades. As you may have noticed, market volume only reflects the number of transactions. Did you get the point? This was just an example for a clearer understanding.

In the trading terminal, the situation is somewhat different; if our rich man had sold his 900 dollars, then we would have seen in the indicator window not the same number 10, but 900, but in the quoted currency at the current rate.

So, market volume reflects the number of transactions, and tick volume represents the sum of all transactions.

The trader with 900 dollars is now the head of the market, he decides when and at what price to sell. In order to follow a trader, you need to know what currency is being traded and what its value is. The total number of transactions does not play any role here.

One large million dollar trade will have a much more significant impact on price movement than 10 $100 orders. Large transactions are the main drivers of the market; they are the ones who control the price. It's clear?

In our example, the market is controlled by one trader – the one with $900. It is he who will sell at prices favorable to him. With the help of the volume indicator, you can detect the moment of action and use it for your own purposes.

In the Forex market, only 5% of participants are large players, that is, those who influence price movements, all other participants are a crowd that donates their savings to large players. In order not to be in the crowd of those who lose, it is recommended to monitor the actions of large players and open orders with them.

So, how to determine volumes in Forex? In order to correctly determine the volume, it is necessary to use the futures markets. Quotes on the foreign exchange market will be the same as on the futures market, and the volume will be expressed in dollars. Many speculators often trade volumes on the futures market; volumes are clearly displayed there.

Trading using volumes is not particularly difficult. The main thing is to capture the essence of everything said today. I hope you now understand how to use volumes in trading. In the following lessons we will delve into the study of trading by volume in more detail.

Today we will look at such an interesting and pressing question - where to get volume for Forex? After reading this article you will learn about.

• Horizontal forex volume.
• Where to see .
• Thinkorswim demo.
• Tick ​​volumes.

Trade without volumes. Can?

Lately, more and more people are writing to me who trade Forex and fewer and fewer people who trade on a real exchange, not to mention SMEs. I already forgot the last time people who trade there wrote. Of course, they attach charts every time and I always have the same question: where are your volumes?

That is, why don't you use volumes because trading on the market without volumes is generally impossible.

Let's assume we have 2 candles. They are absolutely the same. But if the first candle has an increased volume, then this will mean one situation, and if the second candle has a decreased volume, then this will mean a completely different situation

And it is important to understand this. Volume is critical, since candles, as I already said, are an indicator. An indicator of the actions of buyers and sellers. Volume is primary in the market. Buyers and sellers are primary in the market; they create volume, which ultimately forms some kind of movement in the market. On this topic, please look at the article that is related to market mechanics.

I am often told that since we trade Forex, we have no volume. Gentlemen, this is a joke for the chickens. When I traded Forex I had volume.

Currency futures/forex.

Firstly, there are indicators that take information from adjacent futures and provide it to you in the terminal. I won’t say what indicators these are, but believe me, if you google it, you will find a huge number, including paid indicators, that can provide you with information from related futures in your MT4 or MT5 terminal. What do I mean by this?

There are certain futures that qualify as def. currency pairs.

6A AUD/USD

6B GBP/USD

6C CAD/USD

6E EUR/USD

6JPY/USD

6N NZD/USD

6S CHF/USD

For example, let’s open 6E, this is a euro futures, and for example, I’ll open the euro/dollar pair

Try to find 10 differences here, excluding the last candles, since the data had to be connected.

Analytical terminals.

You can use the same ATAS to connect volumes and view volumes on futures, but trade on Forex. As a matter of fact, at one time I did just that. That is, I looked at Atas, but at the same time I traded on Forex. The Forex company and the MT4 terminal acted like a kind of glass for me. The same thing that I do now - I trade in alora, but at the same time I look in atas.

Don't forget that all platforms act as analytics. I’ll give Atas a little promotion and say that there is a whole column where you can choose various futures that correspond to certain currency pairs.

You can access (demo) the THinkorswim terminal. Here, for example, pervoclass.ru/tos It’s completely free, you are given an account for 60 days. Below, on the same website you can download this terminal. After downloading, installing it and entering your login and password, you will have something like this terminal

Here you can choose different assets. In this case, the same euro (6E euro/dollar). There are volumes here, here you can also add various graphic elements, be it lines, a huge number of indicators are also available here, and you can also include clusters here somewhere. There are also a huge number of indicators here

If you delve into this terminal, you will find incredible functionality. By the way, I also used this terminal before and it is much better than the same Atas. The only thing I didn't like about him was his intricacy. Every time you have to rack your brains, but if you hone it at the level of some instincts, then you will never have problems with this. Use it!

Tick ​​volumes VS real.

But if you don’t have the opportunity to buy atas or don’t have the opportunity to use other terminals, for example, there is the thinkorswim terminal. You can register a demo on it and, in general, live comfortably, look at it and trade in MT4. If you do not have this option, then use tick volumes. To dispel all doubts, let us now conduct a small experiment. Here I have an euro futures open and here I have 2 graphs: a volume graph and a tick volume graph. Try to tell now where are real and where are not real (where are teak and where are ordinary)

Try to see if there are any differences in these volumes. Along the way, I can say that I personally do not observe any changes that are critical for trading.

Everything is pretty much the same here. Approximately the same columns, approximately the same amount of different volumes and to say which is which... is quite difficult, I will say even more - unrealistic. It’s impossible to say where are the usual volumes and where are the tick volumes... Well, ladies and gentlemen, below there were tick volumes, and above you saw the usual, real volume.

What am I talking about? To what you can use tick volume in your terminal. Of course, it doesn't show up very well here

However, again, there are volume indicators for Forex, which make all this look quite attractive.

Horizontal Forex volumes.

Let me make a small reservation - tick volumes are typical for histogram volumes. They are suitable for them. If we consider horizontal volumes, then unfortunately they will be ineffective and will lie very much. The fact is that one trader and I conducted this study related to horizontal volumes (by horizontal I mean a market profile or ordinary clusters). The fact is that with regard to clusters and with regards to horizontal volumes, tick volumes do not work. If we translate tick volumes into this form,

Alas... he will lie shamelessly. If you use the Atas or SBpro terminal, which are several times cheaper than Atas and are practically no different in functionality, you can use this futures and make Forex transactions. In the next lesson we will look at whether it is possible to trade the Forex market without volumes at all.

Conclusions.

You can use tick volume in Forex; it is no different from real volume. If this is still critical for you, register a Thinkorswim demo account and use related futures. If this does not suit you, buy ATAS or SBpro, or any other analytical programs. Well, if you are a very sophisticated person, then try using various indicators for MT4, which display real volumes in your terminal.

Volumes have one more advantage - if you learn to use them correctly, you will receive signals much earlier than when working only using indicators.

The whole point here is that price can be considered as a derivative of volumes, but indicators are already derivatives of price. Volumes express the interest of traders, i.e. give a signal earlier.

What types of volumes are there?

At first glance, it may seem that volume can only be of one type - simply the number of transactions concluded (or how many lots traders traded) during each candle. But in reality this is not the case; there are several types of volumes:

Accumulation/Distribution.

We've already dealt with the first one, now let's briefly go over the next ones. OBV (aka on-balance volume) is used as a leading indicator. The fact is that it often decreases or increases on the eve of the price chart movement.

Calculated depending on the closing price of the day. If it is more than yesterday, then the volume is growing, if it is less, it is falling. If in the market you observe a divergence between the indicator and the price chart, then most likely a reversal is being prepared. OBV often leads the price movement.

The A/D indicator works according to a slightly different algorithm - the difference is calculated between all upward movements (meaning days when the price went up) and downward movements (when the price dropped). It is constructed in a separate window in the form of a histogram and mainly divergences on it are taken into account.

Where can I see real volumes on Forex?

If you want to see the real picture of what is happening, and not tick volumes or their derivatives, then the capabilities of MT4 will not be enough for you. We will have to take information from outside, in particular from the Chicago Stock Exchange. No one is stopping you from trading in MT4, we just take the necessary data from there.

In order not to register with Western brokers and not fool your head, you can use the online option for working with charts. To do this, go to the website of the Chicago exchange (cmegroup.com) and go to the Trading – FX section, a table will appear with a list of currency pairs. Click on the chart icon and a chart with volumes will appear in a separate window.

The data is taken from TradingView, and there is a lag of 10 minutes compared to real quotes. That is, if you trade on small time frames, then the option of working online with quotes from the Chicago Stock Exchange will definitely not suit you. Otherwise the option is quite working.

Cluster Delta is one of the most convenient ways to quickly get all the information you need. Let's go to their website, then we will be interested in the V-analysis tab, then select the desired instrument (that is, a currency pair), timeframe, method of displaying information, etc. We get the real volume.

If you have extra money, you can try special indicators from Cluster Delta for the MT4 terminal. In fact, such indicators act as intermediaries and simply transmit information from the site directly to the terminal. There are no other advantages to this solution to the volume issue.

As an option, you can try installing a third-party terminal, which displays the required volumes. Among the most sophisticated, I would note ATAS (we will talk about it a little lower, when we understand what a footprint is). ThinkOrSwim looks good. But this is also full of its own nuances, for example, ATAS functionality is very limited for demo accounts.

Footprint – horizontal slice of real volume

A little earlier, I already drew your attention to the fact that even the actual trading volume for each candle does not give us a complete picture of what is happening. That is, we already see the result, that is, the total traded volume. But what happened during the formation of the candle remains beyond our attention. Footprint solves this problem, because for each candle it displays how many transactions were made at each price level.

Getting to know the footprint - working in the ATAS terminal

In order to get an even more detailed picture of what is happening, select the Clusters option from the window in which you can select options for displaying the graph. After this, each candle will display the Bid and Ask numbers at different price levels.

The right column shows buyers, the left column shows sellers. Depending on who has more, the cell is colored red or green. On the left, the total traded volume is shown in the form of a histogram.

I would recommend adding the Delta indicator to complete the picture. It will show the overall difference between buyers and sellers on each candle.

In principle, there is nothing complicated when trading using a footprint; the question here is more about logic than about knowledge of special patterns. You must literally learn to constantly keep your finger on the pulse of the market and feel how the market is living, where the price is going to go.

If you take a closer look at the footprint, it becomes obvious that trading activity is sharply increasing at some price levels. Moreover, the growth in activity is observed in both directions, that is, the bulls begin to buy sharply, and the bears are just as active in opening short positions. These levels can be considered something like an equilibrium point - the market has temporarily found the level at which the price suits both sellers and buyers (I emphasize that this equilibrium is very precarious and can easily be disrupted).

When a new imbalance arises between the needs of buyers and sellers, we can say that a force initiating a new movement appears in the market. It is due to this that the price moves until the equilibrium point is found again. The imbalance that has arisen can be judged using the same graph.

At the beginning of the highlighted bearish candle, you can see that the bears at each price level significantly outnumbered the bulls in strength. There is an imbalance between buyers and sellers, since there are more of the latter, then most likely the price will go down.

At a certain point in time, the bulls tried to turn the situation in their favor (116 versus 74), at which point one could already be wary. At the next price level we see a peak of activity. This suggests that the price seems to have found an equilibrium level, which turned out to be true. Over the next few candles, there was a lull in the market, and the price was not far from this level.

The basics of working with footprints and volumes

The footprint can be used, for example, when assessing the truth of a trend line breakout. Sometimes this is almost the only way to determine whether the breakout is true or whether the price is trying to pull us into a trap.

In the presented example, the price on m5 breaks through the trend line with a large, confident candle. We need to try to track the logic of sellers and buyers during this and understand what to expect from this breakout - the price returning below the line or the continuation of the upward movement.

It is impossible to say anything precise about vertical volumes - there is no sharp surge. So there is a high probability that the breakout is false. Let's try to look at the horizontal volume, here the situation looks a little more clear.

Immediately at the moment of the breakdown, we see how the bears tried to do everything to ensure that there was a rebound from the resistance. At this time, the number of sellers is higher than buyers (after all, most trading participants assume that the price will most likely rebound from resistance, especially since this is its third approach to it).

After the resistance has been overcome, we observe an increase in the number of buyers and a reduction in the number of sellers, that is, all the conditions are in place for growth to continue. Over the next few candles, you can see that sellers and buyers have reached a temporary compromise. Therefore, there is no strong growth.

In approximately the same way, you can analyze the further exit of the price from the horizontal channel. The situation is similar to the previous one, the only difference is that the bears did not try to return the price back to the channel. On the breakout candle, there is a sharp increase in volumes, and bulls dominate throughout almost the entire candle. All this gives reason to believe that growth will continue, and so it turned out to be in the future.

In fact, when working with a footprint, practical experience comes to the fore. There are no masses of patterns or complex constructions/calculations. Everything is built on logic and the ability to read a chart, to see what is hidden behind the ratio of buyers to sellers at specific price levels.

A couple of simple patterns when trading by footprint

To identify it in ATAS, switch the cluster chart view to Bid/Ask Volume Profile. In this case, the histogram rectangles will have different sizes depending on the number of contracts traded.

Let me emphasize once again that you should only look for this pattern if there was a downward movement before it. If the price moves in a horizontal channel or the trend is upward, then we simply do not pay attention to it.

Pattern "b". The formation is the opposite of the previous pattern. Only in this case is it worth looking for it in a growing market. During a flat and a downward trend, we do not pay attention to it.

Forex strategy based on volume indicators

In practice, trading only using volumes does not make much sense. Analysis of volumes allows you to understand the logic of what is happening, but the level of setting a stop loss or take profit can be better suggested by technical analysis, so there is no point in abandoning other methods of analysis.

That is why volumes are most often used more as an auxiliary tool. That is, an additional filter is simply introduced into the TS in the form of volume, for example, entering the market only when the TS signal is confirmed by a surge in volumes. Let's look at a couple of such strategies.

This TS is interesting in that it will require only 2 standard indicators from MT4 - the Volumes indicator and Bill Williams' MFI. Nothing else is needed.

The author of the strategy proceeds from the fact that tick trading volumes can be as effective as real data on traded contracts. Here you need to understand a little about the logic of both indicators:

Volumes simply shows the volume depending on how often the price changes. Indirectly this is true;

MFI will be used as a baseline in the strategy. It is this that allows one to evaluate the resistance to the current

By focusing on price fluctuations, beginners, and sometimes even professionals, often miss such an important aspect of trading as Forex trading by volume. Volume is the quantity that most accurately describes the overall state of the market. How to learn to analyze volumes and conclude deals based on the data received?

TOP 3 Forex brokers in the world:

The trader's task is to repeat the transactions of large traders. When giants appear on the market, the chart immediately shows an increase in volumes, since huge amounts are being bet.

For reference! The opening of positions by large traders can give movement to the market. Also, a serious increase in volumes is observed before closing a transaction if an equally strong opponent from the other side enters the trade.

Trading principles

An inexperienced trader may think that volume is a specific concept that has a single definition, that is, it is the number of transactions concluded during each candle. But there are several more meanings of this term:

• real, existing at the moment;
• exchange - shows the number of shares that were traded;
• quantitative – the percentage of completed transactions over a certain time;
• tick – an indicator of price fluctuations over one period.

Formation of volumes implies fulfillment of a number of requirements.

Price levels

Trading by volume is most effective in a flat, when the price fluctuates within key levels. During the US session, the largest number of transactions occur, which means the largest volumes are formed.

Movement into the American session.

Using the market's ability to bounce and return to its previous position, you can find key price levels.

Transactions

As soon as key price levels begin to approach, you can enter the market using a pipsing strategy. At the same time, profit increases by 8-10 points, and if you manage to reach the newly formed volume, you can even count on 40 points.

Important! A price breakout is also a good time to enter, but the price must break out by at least 10 pips.

What strategy is needed?

Experts recommend choosing a trading system that would be suitable for the European session. This is due to the fact that the end of the work of the American exchanges and the beginning of the London ones coincide. The largest number of transactions, and therefore the highest volatility, will be observed during this period.

A new price level is usually formed by hedge companies, whose style is characterized by frequent punctures that knock down stop losses. The specificity of trading lies in analyzing the work of American traders and plotting levels on charts.

Spike graph.

The following strategies are used to trade by volume:

1. When broken out, most candles show the direction of the main trend. Volatility is high. At the moment of breaking through, the volume increases, after which the price will move in the desired direction. Suitable for long and short positions.
2. Stocks according to the trend. The increase in value is gradual, with each subsequent jump “Higher” the volume increases, with rollbacks it decreases. You should wait for developments in the morning, and enter the market after 11-12 o’clock. You need to continuously monitor changes in stock prices. There are a large number of false spikes to consider. Volume is used as an indicator to select a profitable position.
3. News bursts. After the news is released, there are sharp reversals and an imbalance between supply and demand. Volumes increase by almost 500%. The position must be opened against the movement with short stops.

These and other strategies can be used on any time frame. The basic rule for each of them is to look for the moment of volume growth and make a decision to open a position based on it.

For reference! There are such concepts as horizontal/vertical volume, which is reflected in the histogram.

The difference between them is in the trading activity, with the first indicating the stronger side (“bulls” or “bears”), and the second is intended to assess price fluctuations within the candle. These factors are used to select a strategy.

Indicators

In such trading, the definition of the indicator also plays an important role. Better Volume is considered the best, as it allows you to use different shades for the columns. BV is effective on futures transactions. It behaves like a shadow of the market situation: if the volume does not change, the indicator also does not react.

The chart clearly shows a massive accumulation, after which a rollback occurs with a movement in the opposite direction. Thanks to this indicator, the trader finds out what market makers are currently doing: buying or selling. This means that you should follow them, but watch out for possible reversals.

The second most popular is MFI, which measures the strength of outflows into the currency or securities market. In its specifics, it is similar to RSI, but is intended for trading by volume. This indicator was created by Bill Williams and is designed to track tick changes. MFI gives signals when there are large investments on both sides. If it grows, the number of participants increases. When it falls, traders’ interest decreases. In the first case, positions need to be opened, in the second – closed.

Analysis of volumes on Forex allows you to obtain data on the balance of power between sellers and buyers. If you know the rules of trading and move in the right direction, following the strongest participant, profit is guaranteed.