Trading volumes as an aid in cryptocurrency trading
One of the most important things about trading cryptocurrencies is that even in this unusual market, standard market laws apply.
Here you can also apply strategies that are successfully used on currency pairs and conduct technical analysis using indicators.
There are many indicators that characterize the trend, one of the most striking of which is the total volume of transactions carried out.
That is, the amount of transactions concluded during a certain period of time - an hour, a day, a week.
The cryptocurrency quotes table itself is available on the website: plugins/system/oyl/src/Redirect.php?oyl=aXuvgQAB4IUwsVcwrAEWDC0w1LMfzun5113iquo8LOE8UYdopHuOSqRV0tHL2jlCgovPvBMkp28%3D
What do cryptocurrency transaction volumes show?
The increase in transaction volumes for a particular cryptocurrency confirms the existing trend. That is, when the price falls, most sellers sell because they are confident that the price will continue to decline, while during an upward trend, the number of buyers increases, hoping for an increase in the price of the chosen cryptocurrency.
This means that by observing changes in the daily volume indicator for a given cryptocurrency, one can determine to what extent market participants support this trend.
If volumes fall, we can say with great certainty that the price will soon change its direction or the market will enter a flat state .
Standard indicators from the MetaTrader trading platform can also be used to assist with volume trading:
There are as many as four of them here, and if you wish, you can install your own volume indicator that will fully meet your needs.
It's important to note that volume isn't a 100% guarantee of trend confirmation, and any important news can quickly reverse an existing trend. Therefore, when opening trades, always monitor the situation and protect your positions with stop orders .
