Forex volume.

The concept of volume is quite often found in technical analysis of financial markets; it is this indicator that serves as the main confirmation of an emerging or current trend.

Forex volume characterizes the number of transactions on a particular currency pair, as well as the total amount of transactions concluded over a certain period of time.

At the same time, it is advisable to consider changes in volumes only over short time periods; in other cases, this indicator does not always correctly reflect the current situation and may be the cause of erroneous actions.

Main types of volume analysis in Forex.

• The total amount of transactions made and their number - growth almost always confirms the emerging trend, indicating that the prevailing price suits the majority of buyers and sellers.

In addition, this factor also exerts some psychological pressure, especially in situations where most traders can receive real data on the number of transactions made.

True, complete information is available only on the interbank foreign exchange market in Forex, but you have to be content with the data provided by some of the brokerage companies. One option for tracking the total number of transactions is the “ Forex Volume Indicator ”. This script is essentially an oscillator that displays data in the idea of ​​changing bars.

You can only judge the correctness of its operation based on your own experience. • Number of open long and short positions – thanks to a special informer, you can find out how many buy or sell orders are currently open for a specific currency pair.

True, it is not the number of positions that is displayed, but their relationship to each other. For example, the AUDCAD currency pair has 77% open buy positions and 23% open sell positions. These indicators can confirm the existing upward trend or a high probability of a reversal of the existing downward trend.

Basic moments.

When analyzing Forex volumes, the following patterns are observed:

Growth in volumes – confirms an increase in demand or supply and the relevance of the existing price for a currency pair.

A drop in volume indicates a decrease in interest; in this case, the market may make a trend reversal, or enter a flat state; in any case, at such moments it is advisable to refrain from opening new positions.

By installing a volume indicator, or assessing the ratio of open positions, you can independently draw the right conclusions about the choice of direction for a future transaction.