Why do we use Volume?
Volume is the most valuable data after the price.
What can this Indicator do?
It can confirm the current open interest according to the volume
- Volume above average means that the open interest among traders is high.
- Volume below average means that the open interest among traders is low.
The Fast Volume Index. The histogram represents the average volume according to the shorter amount of periods.
The Slow Volume Index. The line represents the average volume according to the longer amount of periods. It means that if the histogram has a greater value than the line, then the most recent average volume is higher, and the technical analysis signals of this period are weighed more heavily.
The Value Modifier. This modifies the Slow Volume Index with a preferred value.
- This value is a percent value of the index.
- The value may be positive or negative.
Setting the value to 10 will cause the Slow Volume Index to move 10% up. This is done in order to make the Volume Pointer show a high volume, when the current volume is at least 10% higher than the average.
Setting the value to -10 will cause the Slow Volume Index to move 10% down. This is done in order to make the Volume Pointer show a high volume, when the current volume is higher than 90% of the average.
Color Coding. This feature sets different colors for values of the Fast Volume Index that are above and below the average (green and red by default).
The Forex Market is a volatile OTC Market, and that is why an actual volume is impossible to determine. What the Volume Pointer does is it determines the closest possible estimate of the current volume based on the number of ticks.