Forex volume indicators for MT4 and cTrader

Volume indicators are highly important in investing. They display energy behind each move. The rise in trading volume can signal traders that sharp market moves are expected. Rise in volume help traders predict breakouts, trend strengths, and interest in given assets. Similarly, low volume might indicate that the traders are losing interest in the asset and liquidity might decrease. 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.
It's worth mentioning that volume is calculated differently in Forex and in Stocks. Stock market is centralized and highly transparent. Traders get information about total number of stocks that were traded in a given moment. Calculating trading volume is much easier and precise in stocks. When it comes to Forex, the FX market is decentralized, meaning there are various exchanges where you can buy and sell currency pairs, which makes calculating the total volume that was traded that day impossible. Forex volume indicators measure rise in tick moves and trading activity instead of measuring the exact volume percentage.
Understanding volume indicators in Forex can greatly help them time their entries and exits. When you join a trend, you want to be backed by high volume, so that there is ab increased probability that the trend will have the energy to continue. A drop in volume when trading a trend might indicate that the price will reverse.
In this guide, you will learn how to use Forex volume indicators for MT4 and cTrader platforms. What's more, we'll discuss the best approaches when using the indicators.

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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. Which is looking at the general amount of financial instruments being traded on the market for a predetermined period of time. Forex volume indicators display changes in trading activity relative to previous periods. As already mentioned, Forex market is decentralized and counting exact number of total contracts traded at given period is impossible. 
The volume information is visualized on the chart and provided for traders. Let’s take the USD/JPY chart as an example with the volume indicator already activated. Volumes is one of the simplest and the best volume indicators for traders today. 
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. 
The big green line means that bulls are pushing hard and vice versa. If volume increases wildly and price remains more or less in the same place, it means that the level is holding up the price effectively. 
Some traders go long when Green line increases on the volume indicator and go short when red line becomes massive. 
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 essential to look at the bigger picture too.

How to use volume in trading?

There are various ways that you can use information about volume to your advantage. Forex trading volume indicator keeps you informed about the rise of interest around a given instrument. In Forex, prices move from significant levels to significant levels. Breaching support and resistance or other significant areas require energy. For instance, when you are trading a pattern, the rise in volume around pattern completion is a great thing. It means that traders are starting to get involved. As a result, probability of pattern predicting the price increases. Similarly, when you see a low volume, it might indicate that there's no or very little interest and the pattern might not be worth entering. 

Volume can predict trend continuations and reversals. As mentioned before, if a strong trend slows down and volume decreases, it might be an indication of running out of energy and reversal might happen. The best volume indicator for Forex doesn't have to be complex. Simple volumes indicator is all that traders need in most cases. It's important to learn how to interpret the information that comes from volume indicators. Increase in trading volume can result in breakouts, sharp price movements and trend continuations 

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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 given time. The increase or decrease in trading activity 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 MetaTrader 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 preinstalled, with the software itself. As a trader, you have the opportunity to find other versions that are free or for sale. MetaTrader volume indicators can be found in Meta market. With MT4 volume indicator, 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 indicator Forex tool for you, rather than have you look through all the volume data from the last couple of days or weeks.

How do I install my indicators?

Most trading platforms have built in volume indicators. However, 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.

How to use volume indicator in forex?

Reading volume indicators in Forex is easy. Indicators are usually displaying green and red bars. The rise in Green bars indicates that volume increases and bulls are moving price higher than the previous bar's close. The red bar is the opposite and represents volume taking price down. The higher the bars, the higher the volume. Volume increase when you are in trends is a good thing and might indicate that the trend will continue. A drop in volume might indicate that the trend will reverse. When volume increases around pattern completions, this increases the likelihood of the pattern successfully predicting the price action. Increase of volume around trendlines and significant levels might be a sign of breakout. Generally, breakouts from significant levels need high volumes. 

What is volume indicator in forex?

Volume indicator in Forex works differently than in stocks. Stock market is centralized and traders get exact information on number of contracts being traded. Forex markets are decentralized, there are Forex exchanges around the world. For this very reason, counting the contract sizes is impossible. Forex volume indicators measure tick change instead. There are various volume indicators created for Forex market.
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