What is Volumes in Metatrader

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Hello,

I know, the Volume generally mean Lot size in MT4 when we are opening new orders. But what is Volume in chart?





What kind of information or data it shows?. And how it is useful?

 
anuj71:

Hello,

I know, the Volume generally mean Lot size in MT4 when we are opening new orders. But what is Volume in chart?





What kind of information or data it shows?. And how it is useful?


In MT5, there are two types of Volumes, Tick Volume and Real Volume

tick volume is number of price changes (ticks) that occur during a given period. It usually measures price changes such as price activity volume on every tick

real volume represents the actual volume of contracts or shares traded during a specific period for example 1 min chart has a 1 bar of volume represents the total contracts traded within 1min period

You may use any one type of volume which is required for your trading strategy

 
anuj71:

Hello,

I know, the Volume generally mean Lot size in MT4 when we are opening new orders. But what is Volume in chart?





What kind of information or data it shows?. And how it is useful?

Traders use volume to assess the level of activity in the market. High volume often accompanies strong price movements, indicating conviction among market participants. Conversely, low volume may suggest lackluster interest and potentially weak price movements. Volume can serve as a confirmation tool for price movements. For example, if prices are rising on high volume, it may indicate strong buying pressure, increasing the likelihood of a continued uptrend. Conversely, if prices are falling on high volume, it may signify strong selling pressure and the potential for further downside. Changes in volume patterns can help traders identify potential market reversals or continuations. For instance, a decrease in volume during a price rally could indicate weakening momentum and potential reversal. Conversely, a surge in volume following a consolidation phase may signal a breakout and continuation of the trend.

Traders often use volume divergence to identify potential trend reversals. Divergence occurs when price movements are not supported by corresponding volume movements. For example, if prices are rising but volume is declining, it may indicate weakening bullish momentum and the possibility of a trend reversal. Volume can confirm the validity of breakout signals. A breakout accompanied by high volume suggests strong market interest and increases the likelihood of a sustained price move in the direction of the breakout.

so.. 

Tick volume represents the number of price changes (ticks) that occur during a given time interval. Each time the price changes, regardless of whether it's an uptick or downtick, it contributes to the tick volume. Tick volume is derived from the number of transactions (buys or sells) that occur within a specified time frame. It doesn't necessarily represent the actual volume of trading activity or the total number of contracts or lots traded. Tick volume is commonly used in markets where centralized exchange volume data is not available, such as the Forex market. It provides a relative indication of market activity but may not accurately reflect the true trading volume.

Real volume, also known as actual volume or traded volume, represents the total volume of contracts or lots traded during a specified time period. It provides a more accurate measure of market activity compared to tick volume. Real volume is typically derived from centralized exchange data where all trades are recorded and reported. It reflects the actual buying and selling activity in the market. Real volume is widely used in markets where centralized exchange volume data is available, such as stocks and futures markets. Traders often use real volume data for more accurate analysis, including identifying support and resistance levels, confirming price trends, and assessing market liquidity.

Hope it helps...

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