Forex volume indicators for MT4 and cTrader

Forex is a very dynamic market that moves according to supply and demand. The Forex volume trading indicators are simply a visualization of that supply/demand movement. Furthermore, the indicator helps us filter through rather vague information that can be received from just looking at the total number of sellers and buyers.
 
For example, when the market is moving upwards, it means that there are more buyers than sellers. When it’s going down, that means there are more sellers than buyers. However, there are moments when this logic is incorrect. The volume indicator helps us find the details in the numbers of sellers and buyers.
 
For example, let’s say there are 100 buyers of 0.5 lots in USD/JPY, but only 1 seller for 100 lots of USD/JPY. What top Forex volume indicators do here is showcase how much is being traded, rather than how many people are doing it. In our example, there are more buyers than sellers, so the market should go up, right? No, because the amount being sold is not the amount being bought, so there is still some surplus, thus the exchange rate needs to go down.
 
In this guide, you will learn how to use the Forex volume indicator to potentially see these loopholes in the market and use them to your advantage.

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Best Forex volume indicators - how do they work?

Although there are quite a few volume indicator types, they all follow the same principle. This is looking at the general amount of financial instruments being traded on the market for a predetermined period of time.
 
This is then visualized on the chart and provided for the trader. Let’s take the USD/JPY chart as an example with the volumes indicator already activated.
Forex volume trading indicators
 
As you can see in the lowest part of the chart there are green and red lines below the candles. These are the visual representations of volume in the market at that specific moment.
 
Usually, this is the preferred strategy.
 
  • Big green line = go long
  • Big red line = go short
 
But that is not the only thing that best volume indicators for traders work according to. There is a thing called “median volume” that needs to be determined before traders can place a trade after looking at the volume chart.
 
Let’s take the USD/JPY currency pair again and see how these “median volumes” can be found.
Top Forex volume indicators
As you can see on the chart, highlighted with red arrows, there are two almost identical volume points where the price managed to spike considerably well. When hovering the mouse over these volume indicators we see that it’s somewhere between 210,000 and 220,000. What this means is that the median volume is 210,000. If there ever is another volume amount above 210,000 in the future and it indicates a “green line”, then it could be a good indicator that going long at that moment is a good idea.
 
If the volume based indicator MT4 is showing a red line on the same volume amount or more, then going short could be a good decision.
 
The concept is exactly the same with cTrader as well and looks something like this.
Volume profile indicator fot cTrader


Where to find best volume indicators for traders

The volume indicator is a technical indicator for MT4, MT5, cTrader and various other trading software. Usually, these platforms have the indicator pre-installed so there’s no need to download anything.
 
For example, with MT4, you can simply go to Insert > Indicators > Volumes > Volumes and voila, you will see the red and green lines at the bottom of your chart. This is the exact same case with cTrader as well.
 
However, unlike the volume profile indicator for cTrader, MT4 has the option to add additional volume indicators to its portfolio. These indicators can be found on the MetaQuotes marketplace.
 
Keep in mind that most indicators you find on the marketplace may be free, but the most useful and feature-rich ones tend to require some sort of payment. However, most of these paid indicators are designed for seasoned veterans of Forex trading, so you may not require it for the foreseeable future if you’re a beginner. The default volume indicator is more than enough for that.


Mistakes to avoid when using the volume indicator

The first mistake with the volume indicator, much like any other indicator, is using it exclusively. What this means is that you don’t use other indicators on top of the volume indicator. There are no top volume indicators for FX traders that can give you a 100% guarantee that your next trade will be successful, which is why it’s important to use other tools too.
 
The second mistake is that you don’t find the median volume first before placing a trade according to the volume. Sure it may look like the volume for the day is extremely high, but is it high according to this week’s total volume? Many traders like to keep their positions open for a few days, so it’s important to look at the bigger picture too.

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FX volume indicators - Key takeaways

The Forex volume indicator is a tool for FX traders to understand how the market is performing at a certain time. The number of trades happening and the amount of the instrument being traded tells the trader whether there is high or low demand, thus giving him or her an opportunity to predict a trend shift.
 
There is a volume indicator MT4 free download, but usually, people stay with the tool that is provided to them on the software initially. As a trader, you can browse the MetaQuotes marketplace in order to find your perfect version, but be aware that some of them may have a price.
 
The volume indicator on its own is not necessarily something that is enough for a successful trade. Things such as historic data need to be checked in order to find the “median volume”. This volume point then acts as your filter. Anything above it is trade-worthy, while everything below it is not.


FAQ on FX volume indicators

Is the volume indicator free?

Yes. The best volume indicator for MT4 is completely free and comes with the software itself. But, as a trader, you have the opportunity to find other versions that are free as well. With MT4 it’s quite easy to do so because the developer has a marketplace where you can find these tools.
 
In order to install them simply activate auto-install on your MT4 in order for the download to directly go to your MT4 folder.
Or, if you want to do it manually simply follow these steps.
 
  1. Download the indicator
  2. Find your MT4 folder
  3. Go to the “Indicators” folder
  4. Copy/Paste your downloaded file in the folder


What other features do paid indicators have?

Some of the best volume indicators for MT4 that you can find will have a price attached to it. Usually, this price is justified with an additional feature. In most cases, this additional feature is the tool’s ability to find the median volume for you rather than have you look through all of the volume data from the last couple of days or weeks.


How do I install my indicators?

If you’re downloading the indicator for your MT4 software then you will most likely not have to bother with the installation, it will install itself.
But if it doesn’t, then simply find the downloaded file and copy/paste it in your Indicators folder within your MT4 folder.
 
With cTrader, it’s pretty much the same case. Download the file and copy/paste it in the indicators folder within the cTrader folder.

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