Introduction to the Volume with Custom Moving Average Indicator
Volume is one of the indications that could be very useful yet is often overlooked. This is because volume often means momentum. It also often validates a trade signal. The higher the volume, the more reliable the signal is.
Volume with Custom Moving Average indicator is one of the few indicators that can help traders objectively identify strong volume.
What is the Volume with Custom Moving Average Indicator?
The Volume with Custom Moving Average indicator is a custom technical indicator which indicates volume first and foremost. It plots bars to indicate the volume. Green bars indicate increasing volume, while red bars indicate decreasing volume.
Then, it takes a moving average of the volume and plots it as a line overlayed on the indicator window.
How the Volume with Custom Moving Average Works?
The Volume with Custom Moving Average indicator plots volume retrieved from the tick volume data coming from the broker’s feed. It plots green bars whenever the current bar has a higher value than the preceding bar, and a red bar whenever the current bar has a lower value than the preceding bar.
It then takes a moving average of the volume data and plots it as a moving average line overlayed on the volume bars.
How to use the Volume with Custom Moving Average Indicator for MT4
The Volume with Custom Moving Average allows modifications on the moving average it plots.
“MA Period” refers to the number of periods or bars used on the moving average line.
“MA Shift” allows traders to shift the moving average line forward or back.
“MA Method” allows traders to choose the type of moving average line used.
The Volume with Custom Moving Average indicator can be used to help traders confirm a sudden increase in volume traded. This can be an additional confirmation of an entry signal based on momentum breakouts. This will be based on volume significantly spiking above the moving average line.
Buy Trade Setup
When to Enter?
Identify a bullish trade setup. Open a buy order on the confluence of the trade entry signal and the volume spike based on the Volume with Custom Moving Average indicator spiking significantly above the moving average line. Set the stop loss below the entry candle.
When to Exit?
Close the trade based on the trade setup or based on price action.
Sell Trade Setup
When to Enter?
Identify a bearish trade setup. Open a sell order on the confluence of the trade entry signal and the volume spike based on the Volume with Custom Moving Average indicator spiking significantly above the moving average line. Set the stop loss above the entry candle.
When to Exit?
Close the trade based on the trade setup or based on price action.
Conclusion
This indicator is not the type of indicator that would provide trend or momentum direction and its consequent reversals. It is not the type of indicator that would be used as the main trade setup basis. However, volume can be used to confirm momentum or reversals.
This is a Metatrader 4 (MT4) indicator and the essence of this technical indicator is to transform the accumulated history data. This MT4 Indicator provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye. Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT4 Strategies >> Claim Your $50 Bonus Here << Click here below to download:MT4 Indicators – Download Instructions
Recommended Forex MetaTrader 4 Trading Platform
How to install MT4 Indicator?
How to remove MT4 Indicator from your Metatrader Chart?
(Free Download)
