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Which indicator shows volume in forex?

Forex volume is an essential factor in technical analysis. It shows the number of transactions that have taken place in the market during a particular period. Forex traders use volume indicators to track the volume of trading activity, which helps them to make informed trading decisions. In this article, we will discuss the different indicators that show volume in forex.

Volume

The most basic indicator that shows volume is simply the number of trades that have taken place during a particular period. This indicator is available on most trading platforms and is usually displayed as a bar chart. The height of each bar represents the number of trades that have taken place during a particular period.

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The problem with this indicator is that it does not show the size of each trade. A high number of trades could be due to a large number of small trades or a few large trades. Therefore, it is not a reliable indicator of the actual volume of trading activity.

Tick Volume

Tick volume is another indicator that shows volume in forex. It measures the number of price changes that have occurred during a particular period. This indicator is more accurate than the basic volume indicator because it takes into account the size of each trade.

Tick volume is calculated by adding up the number of price changes during a particular period. However, it is important to note that tick volume does not take into account the size of each price change.

Volume Oscillator

The volume oscillator is a more complex indicator that shows volume in forex. It is a moving average of the difference between the buying and selling volume over a particular period. This indicator is designed to identify trends in volume.

The volume oscillator is calculated by subtracting the moving average of the selling volume from the moving average of the buying volume. The result is plotted as a line graph. If the line is above the zero line, it indicates that buying volume is higher than selling volume. If the line is below the zero line, it indicates that selling volume is higher than buying volume.

On-Balance Volume

On-balance volume is another indicator that shows volume in forex. It is designed to identify trends in volume by measuring the cumulative buying and selling volume over a particular period. This indicator is based on the idea that the volume of trading activity reflects the sentiment of traders.

On-balance volume is calculated by adding the volume of buying trades and subtracting the volume of selling trades. The result is then added to the previous period’s on-balance volume. If the result is positive, it indicates that buying volume is higher than selling volume. If the result is negative, it indicates that selling volume is higher than buying volume.

Conclusion

In conclusion, forex volume is an essential factor in technical analysis. It helps traders to make informed trading decisions by providing information about the number and size of trades that have taken place in the market. There are several indicators that show volume in forex, including basic volume, tick volume, volume oscillator, and on-balance volume. Each indicator has its own strengths and weaknesses, and traders should choose the one that best suits their trading style and needs.

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