Time segmented volume mt4 forex
The volume indicator mt4 trading platform offers can spot the start of a trend. Check the image below for the perfect example. This is a sign of strong demand. As such, it is no wonder a strong trend started. Such simple volume trading strategies are sometimes enough to end up on the right side of the market. Why complicate things? But, is this valid one hundred percent of the times? Because volume is relative to the Forex market, the answer is no.
They usually come at turning points. It was range bound for several years. As a result, such an oscillator works with overbought and oversold conditions. Instead, it has a simple line. This line acts as an oscillation level for a respective security. It works well for a Forex pair too. Don Worden wanted to see where the market has a large-lot activity.
Consequently, the TSV differs from the volume indicator mt4 offers. It is more accurate in showing tops or bottoms. One of the best volume trading strategies with the TSV is to look for divergences. That is divergences between the price and the volume indicator. It shows a divergence between TSV and price. This is the power of this Forex volume indicator: it shows a breakout before it happens. This makes it difficult to read a chart pattern.
Trading has changed. Head and shoulders, double and triple tops, wedges…they are an important part of technical analysis. But, the Forex market changed since automated trading grew in popularity. Hence, the way a market bottoms or tops has changed too. The classic volume indicator mt4 trading platform offers, is not enough anymore.
But what is VSA? And, does it work on the Forex market? The subject is so vast, it is difficult to find a starting point. It all starts with the retail trader… Retail traders lose money on the Forex market. Most of them. At least when it comes to their first deposit, retail traders lose. Therefore, who makes money?
The answer is that the other parties involved make money. Not the retail trader. Big players. Professional traders play big. So, a fair statement would be that if retail traders did the same as professional traders, they would stand a chance in the Forex market. This is what VSA is. A volume analysis theory aimed to understand what professional traders do.
It starts from the assumption that professional traders leave footprints in volume data. As such, what if one can find them and then trade accordingly? The problem is the same as any volume indicator: is the volume reliable? Even if not, like in the case of the Forex market, it still offers a glimpse into what professional traders do.
VSA as a Forex volume strategy is difficult to understand. It starts from two basic concepts: no demand and no selling pressure. Hence, this is bearish. This is opposite to the classic volume indicator mt4, VSA looks more similar to Japanese candlestick techniques. The VSA is an interesting theory.
If the falling comes with lower spread and volume, the market is actually bullish. Buyers quietly step in. Hence, the market gets ready to jump. It shows a no selling pressure on a down bar situation. For this to happen, traders look for the following: Volume is lower than the past two candles. Spreads are narrowing. Price closes lower than the previous candle. The declining volume together with the narrowing spreads offers a clue that the market is geting ready to jump.
So, it did. Powerful volume trading strategies like this one show ideal conditions to enter a market. Right before the breakout. Obviously, for a no demand on up bar setup, the conditions are opposite. Simply put, it is a line. However, this line is a special one for several reasons. First, it appears at the bottom of a chart. But, it is not an oscillator. Second, it shows the relation between the number of transactions and the price movements.
Hence, it shows volume. Finally, traders use this line to confirm trends. Or, to spot reversals. If the OBV indicator rises, the trend is bullish. When it falls, the price should fall too. As such, traders look at the OBV to be accurate when predicting the movement of a security.
In our case, the move of a currency pair. In fact, its calculation method depends on the period considered. To put the power of this volume profile indicator in perspective, consider its calculation. If the current closing price is above the previous one, the current volume gets added to the OBV. If it is unchanged, the volume remains the same.
And it is subtracted if the closing is below. Because of these characteristics, it mirrors price action. Hence, when a divergence forms, it is a powerful reversal signal. But, the OBV Forex volume declines. The market hesitates. Key Takeaways Time segmented volume TSV is a technical analysis indicator that segments a stock's price and volume by intervals.
According to the developer, spotting discrepancies between the TSV and stock price is a good way to determine possible entry and exit points. Investors may gather more data over a longer time frame for a more complete picture, but a long lag time might affect daily trading patterns. While TSV is an indicator of money moving into and out of a stock, it's not a standalone price-gauging tool. Understanding Time Segmented Volume TSV is a leading indicator because its movement is based on both the stock's price fluctuation and volume.
Ideal entry and exit points are commonly found as the stock moves across the baseline level. This indicator is similar to on-balance volume OBV because it measures the amount of money flowing in or out of a particular stock.
It is calculated by comparing various time segments of both price and volume. TSV essentially measures the amount of money flowing in or out of a particular stock. The baseline represents the zero line. When TSV crosses up through the zero line, it signals positive accumulation or buying pressure. This action is considered bullish. Conversely, when TSV crosses below the zero line, it indicates distribution or selling pressure, which typically precedes a move down in price.
Look for positive or negative divergences between price and TSV in order to determine potential tops and bottoms. Several consecutive divergences increase the reliability factor in trying to pinpoint price reversals. For instance, if a price has been making successively higher highs while TSV has been making successively lower highs, this would constitute a series of negative divergences. This would be an indication of a possible top.
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