Volume in trading is quite an essential factor. It gives you a sneak peek of the interest in a certain instrument. To be specific, high trading volume indicates high interest in a currency pair. This means the asset will experience a strong trend. On the other hand, low volume indicates a lack of interest, making the trend susceptible to reversal.

In the stock market, the trade volumes are there for everyone to see. However, getting the same information for the forex market is quite a herculean task. This is where the Ticks Volume indicator comes in handy.

How Do I see Volume in Metatrader 4?

The indicator uses ticks within a bar to measure the forex volume. But counting all the ticks in one bar is yet another daunting task. The indicator represents the information in a bar graph enabling traders to gauge the market sentiment. The indicator shows high volume by posting long bars, while short bars represent low volume.

How Do You Use A Ticks Volume Indicator?

The Ticks Volume indicator does not necessarily provide buy and sell signals. It, however, does an incredible job as a confirmation indicator. It is similar to momentum trading in the sense that it reveals the strength behind trends.

Essentially, the volume should increase or remain high as the price follows the trend direction. If the volume is high or increasing during the uptrend, the uptrend is sustainable. The same case applies to downtrend. If the volume decreases as the price moves in the direction of the trend, it means the steam is running out, and the price is prone to reverse or retracement. Traders should therefore position their trades accordingly.

Ticks Volume Indicator Trading Example

The performance of the tick volume indicator is shown in the above chart of the Euro against the Japanese yen. The bars are elongated, indicating high volume. This matches with a strong trend.

But the indicator bars become small as the trend loses steam. The market is ranging during low volume indicating disinterest from the market participants. In fact, the market reverses after the ranging market.

Initially, there is a high volume during the uptrend. The low volume follows, indicating the buyers have lost interest. Eventually, the volume increases and matches a massive downtrend.

Conclusion

The tick volume provides traders with the volume of the trades vital information like the momentum. They can hold the positions if the volume rises or is high during both the uptrend and downtrend. An exit signal occurs when the volume goes down, indicating that traders are exiting the position. This will help them prepare accordingly. It is an indicator that you can use for confirmation to ensure you reap maximum profits from the market.