Volume Profile shows volume at price. Standard volume indicator from MT4 (or any other software) shows volume during a specific time period. There is a big difference! Volume Profile shows you what price levels are important for the big trading institutions. Therefore, it points you to strong support and resistance zones.
One of the major claims of using volume profile strategy is that is allows you to build the market concept based on the study of volumes printed on the y-axis on the price chart. Volume as an indicator is not uncommon. It is commonly used during the technical analysis of a stock chart. Volume is also widely prevalent in forex trading as well. Volume Profile Free Ultra SLI by RagingRocketBull 2019 Version 1.0 This indicator calculates Volume Profile for a given range and shows it as a histogram consisting of 100 horizontal bars. This is basically the MAX SLI version with +50 more Pinescript v4 line objects added as levels. Latest Volume Profile Indicators Mt4 Free Download admin 2 hours ago 1 min read In this article we are talking about volume Profile indicators who is basically works about amount transactions which is displaying in screen and work on its function.
Forex Volumes Indicator represents a histogram showing the number or the volume of trades made in the Forex market over a certain period of time (usually candlesticks).
When it comes to the volumes, tick and futures volumes are typically implied…
Contents:
- Tick vs. Futures Volumes;
- Standard Volumes Indicator;
- Better Volume 1.5 + Alerts;
Tick vs. Futures Volumes
The term “volumes” usually refers to the total number of contracts traded for a particular instrument and over a certain period of time in the financial markets.
For example, if 20,000 contracts were sold and bought during a day, people say that trading volume amounted to 20,000.
However, this approach is applicable only to the stock market. As for the Forex market, things look a little different out there. It is impossible to track the total trading volume in terms of standard lots so traders use the so-called tick volumes.
On the picture below, you can compare histograms of tick and futures volumes:
From the technical point of view, the difference between them is that tick volumes display the total number of changes in price over a particular period of time. For example, if price changes 120 times during an hour, tick volume will be equal to 120 while the number of contracts traded is entirely different.
As you can see, they are virtually identical to each other. Supposing that futures volumes are the truth, a high degree of correlation enables us to use the data provided by tick volumes virtually without themselves becoming ineffective.
As for the technical indicators…
So far, real (futures) volumes MT4 indicator can be found only at some small private projects. The rest of indicators are based on tick volumes.
Standard Volumes Indicator
MetaTrader 4 terminal provides a standard volume indicator called 'Volumes', which is mostly used for daytrading.
The Volumes indicator’s description states that the value of volume corresponds to the number of ticks within a price candle. Therefore, if H1 timeframe is enabled in a terminal, a bar displayed on the Volumes indicator’s chart indicates the number of ticks per hour.
The bars of the Volumes indicator with enabled standard settings may be colored in green or red.
Green bar indicates an increase in the number of ticks for the selected currency pair in the market over the last hour as compared to the previous one.
On the contrary, red bar indicates a decrease in the number of ticks for the selected currency pair in the market over the last hour as compared to the previous one.
There is also an alternative indicator with additional features.
Better Volume 1.5 + Alerts
Unfortunately, the standard Volumes MT4 indicator doesn’t always meet the expectations of traders, so we offer you to download an alternative indicator of volumes called Better Volume. It is currently one of the best, or rather, the most popular volumes indicator designed for MetaTrader trading terminal.
The current version differs from the previous one by more powerful customization capabilities and best suits for intraday trading.
The given indicator of volumes significantly differs from the standard Volumes indicator; it doesn’t just display the dynamics of changes in tick volumes in the market, but it also deciphers it and thereby provides a trader with ready-made trading signals. Now let’s proceed to the decryption of the Better Volume indicator’s signals.
Decrypting the Better Volume Indicator’s Signals
The given indicator paints vertical bars of volumes in blue, yellow, green, red, and white colors.
Blue bars account for much of the bars in the Better Volume Indicator. Blue bar means that nothing special has happened in the market and volumes of trades match the standard values for their time period. Trading is quiet and doesn’t tend to change a trend.
A yellow bar indicates a very low trading volume. The bar of this kind always has a very low height. A decrease in volumes typically occurs when the current trend is close to its completion. The yellow bar may also mean the end of market retracement.
A green bar implies that large volumes are present in the market. At that, height of the candle corresponding to the green bar is usually small. That is especially the case if large hedge funds close their positions or open new ones. When a green bar appears in the volumes histogram, it signals a possible change in trend direction. That does not mean, however, that price is going to reverse immediately and sharply. The price reversal may happen later due to the effect of the market inertia.
A red bar usually stands out for its height and indicates a large domination of buyers over sellers in the market. This is often true when buyers enter the market quickly. The red bar may be followed by a change in trend direction from bearish towards bullish or a deep bullish retracement.
A white bar plays the same role as the red one. The only difference between them is that the former signals a sharp increase in the activity of sellers in the market. The white bar may be followed by the market reversal to the downside preceded by an uptrend or a deep bearish retracement.
The diagram of the Better Volume indicator also includes a moving average which primary purpose is to divide bars of volumes by their height.
In conclusion, let us stress that the Better Volume indicator actually provides traders with a basis for developing their own trading system. Despite its simplicity, it appeals to the fundamental data, i.e. trading volumes that always have an immense impact on price direction, forming and fading of trends.
How to add Better Volume in MT4
Follow the instructions below to install the Indicator to your MT4 terminal:
- Download the ZIP-archive with Better Volume indicator file by clicking the link at the top of the page;
- Unzip the file into the MQL4/indicators folder of your terminal;
- Restart the MT4 terminal;
- Run the indicator by double clicking the indicator name in the MT4 Navigator;
- Check the 'Allow DLL imports' box and click 'OK';
- The indicator will be displayed on the chart;
- Adjust the indicator’s settings according to your needs: press CTRL+I, select the indicator from the list, and switch to the 'Inputs' tab.
If you have any difficulties while installing the indicator, please view the detailed instruction.
One of the most common ways for traders is to make use of the common concepts in technical analysis. These concepts include aspects such as utilizing support and resistance levels, price action based techniques, chart patterns and technical indicator based trading setups.
However, a new approach to technical analysis called volume profile has also been making the rounds.
Steidlmayer, the author of Trading with Market profile has been widely attributed to developing the concepts of volume profile trading.
An established futures trader, Steidlmayer is an independent trader having joined the Chicago Board of Trade in 1963.
Alerts In Real-Time When Divergences Occur
One of the major claims of using volume profile strategy is that is allows you to build the market concept based on the study of volumes printed on the y-axis on the price chart.
Volume as an indicator is not uncommon. It is commonly used during the technical analysis of a stock chart. Volume is also widely prevalent in forex trading as well.
However, for the most part, volume is confined to the x-axis. The volume indicator basically shows the amount of transactions that take place during a session. Based on whether price was bullish or bearish, the volume bars are painted accordingly. This is known as volume profile or market profile.
With volume profile, traders focus on areas where a reversal could occur. Some say that volume profile analysis gives an 'unfair' advantage due to the market context and that such methods are used by large institutions and banks. Insydeflash cannot load the driver. please close all applications.
Be that as it may, volume profile strategy makes for an interesting study as it puts the often taken for granted volume bars in context and allows for some unique insights into the markets when trading.
But before we begin, let's start from the very basics, what is volume?
What is volume?
Volume, or volume of trade shows the total number or quantity of contracts or shares that are traded for a specific security. Volume can be measured on just about any financial security.
Most commonly, volume is used in futures and stocks. Due to the fact that futures and stocks are traded at an exchange, one is able to get a fair idea on the quantity of contracts or shares that change hands.
Volume is also used in the forex markets. However, the major drawback here is that due to the OTC nature of forex execution, it is difficult to get a full picture of the true volume for the forex markets.
Still, many brokers offer the volume indicator, plotted as a histogram on the x-axis. This volume, in most cases captures just a small percentage and therefore does not reflect the true picture. Regardless, many forex traders continue to prefer to use the volume indicator. Anime hatsune miku subtitle indonesia.
The first chart below shows the basic layout of a stock chart with the volume bars displayed at the bottom of the chart.
Figure 1: Basic stock chart with volume bars plotted on the x-axis
The volume basically represents the amount of transactions that take place. Volume can also be used to measure the liquidity of the security in question. Generally speaking, volumes are reported once an hour by exchanges. However, these days of electronic trading can report volumes on a tick by tick basis. Still, these volumes that you see in real time are only estimates. The true and actual volume is showed only the next day for the previous day.
When volumes are high, it signals that the security is liquid and active. A security with higher volume also tells you that the order executions and the spreads are better.
What is volume profile strategy?
The volume profile strategy is basically a study of the volume based on price. This is a bit different compared to the regular volume bars that we mentioned in the previous section of the article.
While regular volume tends to display the total volume of the security for a given session, volume profile displays the volume of the security for a given price.
As a result, volume profile is plotted on the y-axis as it deals with price. To explain this in simpler terms, volume profile takes the total volume that is traded at a specific price level during the specified period and then divides the total volume.
This is then categorized into the buy volume or sell volume and makes this information available visually as it is plotted on a histogram on the y-axis.
The next chart below shows a sample chart with the volume profile. For context, we also retain the regular volume bars on the x-axis.
Figure 2: Volume profile exampleThe longer horizontal volume bars are the ones of interest. These bars represent the price where there is the highest amount of volume. In other words, the price level depicted by the horizontal volume bars indicate the price where most of the activity has taken place.
This price is commonly referred to as the point of control or PoC. The name comes from the fact that the price in question had the most control of the market at the time.
The volume profile bars can be plotted across different time frames. The horizontal volume bars are updated every time there is a new order that is filled. Every time the volume profile bars are updated, they can change the position.
A common occurrence is to see the point of control or the price where most of the activity takes place, starting at the top of the chart as a new trading session begins. Over the course of the day, this point of control can shift thereafter to a different price level.
In market profile or volume profile analysis, there are some technical jargons that are commonly used. They are defined below.
High Volume Nodes: These are price levels that have the highest activity around a price level. The high volume nodes can be viewed as an indicator for consolidation of price.
In the high volume nodes, you can commonly see a high level of both buying and selling activity. Price also remains at this level for a long period of time.
The high volume nodes imply the fair value for the security in question. When price approaches a previously established high volume node, you can expect price to consolidate or move sideways. It is less likely that the market will immediately break past a previous high volume node.
Due to the high amount of activity that takes place at the high volume nodes, price tends to gravitate back to these levels. The high volume nodes are also seen as levels where there is a high amount of institutional buying and selling taking place.
Bbe ds48 software download. Low Volume Nodes: These are the exact opposite to the high volume nodes. The low volume nodes signify a drop in the volume around a price level. The low volume nodes are created as a result of a breakout in price after consolidation.
During a breakout, you can often observe that price breaks with an initial burst of volume and later it drops off. These drop off levels imply that the price of the security is at an unfair value.
When price approaches a previous low volume node, there is a greater chance that price will break past that level due to the unfair value. The price of the security will not spend must time at this level compared to the high volume nodes.
Point of Control: The point of control is the price level at which there is the highest activity that takes place. Note that time is not of the essence here. Therefore, the point of control takes into account only the price level which has seen the most consolidation.
The point of control, from a trading set up perspective is said to be the level where you could place your stops or entry levels for a trade. Price also tends to revisit the previous point of control levels. This tends to act as both support and resistance.
Value area: The value area is basically the percentage of all the volume that is traded. The default setting for the market profile indicator is 70%. The value of 70% is based on the normal distribution curve.
The next chart below shows all the above technical terms visually.
Figure 3: Market or Volume profile – Terminology
Volume profile trading set ups
So far, we outlined what is volume and how volume profile differs from the traditional volume indicator that is commonly used.
With the volume profile indicator plotted on the price chart and on the y-axis based on the point of control, the high and low volume nodes, you can now get a clear picture of what is happening.
One of the most commonly used volume profile trading set ups is to use the price levels as areas of support and resistance.
We already noted that the high volume nodes are areas of consolidation where most of the transactions take place, but price moves sideways. These areas can be used as support and resistance. Similarly, the low volume nodes which tend to have little activity can also be used as areas where price could either quickly reverse or drop off.
One of the main differences in using volume profile trading set ups is that they are reactive in nature. The common ways to plot support and resistance levels are basically through trend lines and identifying areas of consolidation. Similarly, using volume profile analysis, a trader can build a reactive market context using this strategy.
Volume profile in forex
The next chart below shows some simple examples.
Figure 4: Volume profile trading set up, example 1In the above chart, you can see that we have used a 20 and 50 period exponential moving average. The dashed black lines indicate areas of low volume nodes.
The red thick line indicates the point of control. If you were to trade the chart based only on the moving averages, you will notice that after the bearish sell signal (on the right), price initially falls to the point of control and bounces back.
However, a little while later, price breaks the point of control. At this point, short positions can be taken after the point of control is cleared with a strong bearish candlestick. With the two EMA’s already signaling a sell, a short position here can be taken down to the low value node.
The most amazing point about this set up is that you entered the trade at the strong point of the trend and booked profits right at the low value node. Following the decline to the low value node area of 1183 – 1175, price bounces back higher.
Figure 5: Volume profile trading set up, example 2
In the next chart above, we simply fast forward the chart but retaining the old values. Here, you can see that after the initial bounce off the low value node area, you can see a new point of control. When we combine the moving averages and the point of control, you can see how price reacts to the point of control.
This is the area where you would be entering the trade to the long side.
With the two period EMA’s already in a bullish signal, the long position from the point of control is take targeting the previous low value node. Notice how price consolidates at this area and the previously formed low value node turns into a high value node?
Booking profits here once again shows how you can enter the trade at the strongest point in the trend.
What we currently see on the charts is that price is near a high value node. Therefore, we could expect to see the price decline and retest the previous high value node around 1292 – 1285 level.
Free Volume Profile Indicator Nt8
In conclusion, volume profile analysis shows traders the price levels and the amount of volume that was traded during the session. Volume profile is dynamic in nature and changes as the market evolves. At the same time, volume profile also builds the market context.
Free Volume Profile Indicator Mt4
The trading set ups shown here is just one of the many ways that volume profile can be incorporated into developing a trading plan or strategy. Traders can experiment with the volume profile indicator with the understanding and the explanation provided in this article.