The Buy-Sell Volume indicator measures the strength or weakness of price movements.
We always aim to join a bullish, or bearish, move in the live market that indicates greater strength in the background. There are many ways to measure a trend’s strength. To analyze the bullish or bearish forces behind breakouts and trend-following moves, traders must consider volume.
The buy-sell volume indicator constantly monitors the price’s bullish and bearish forces. It does not show a buy-sell signal. It helps you filter and choose the best trade setup, based on volume strength.
This guide will explain how the buy-sell volume indicator functions and how it can be used to assess the strength of price momentums.
How can you trade with the Buy-Sell Volume indicator in the MT4 platform
To show market volume changes, the buy-sell volume indicator uses an indicator with a dotted curve. The indicator level also changes color to indicate bullish or bearish momentum. When volume continues to increase, the indicator curve becomes green.
It is a sign that there may be a bullish move. A red volume curve, on the other hand indicates that the asset’s trading volume has fallen. This situation suggests that the price may be preparing for a bearish move.
The above chart shows a consolidation period for EURUSD. The currency pair initially moved in a bullish direction, so we anticipate that the current sidelined situation will lead to a bullish breakout. The buy-sell volume curve was also in a short-range.
The volume curve rises whenever the EURUSD attempts to make a bullish breakout. It also moves beyond its current consolidation range. The indicator level also turns green, indicating that the breakout is occurring with a positive volume force.
To filter a sell setup, ensure that the volume curve is turning red and showing a decreasing pattern. When the indicator value falls and the price breaks out of bearish territory, it is a good time to choose a selling opportunity.
It helps to identify trend-following trade opportunities and also allows for breakout opportunities. The price may be in a bullish pattern and then plots a higher low before rejoining the bullish trend. The indicator level changes to green and goes up. This indicates that the asset is in strong buy pressure. It is time for a long-term entry.
Volume is an important technical indicator, for both stocks and forex currency pairs. It gives you an overview of the buy-sell requirements of trading assets. It is crucial to find the right volume result for technical analysis. Our in-depth review revealed that the buy-sell volume indicator, particularly for novice traders, is easy to use, efficient, and user-friendly.