Profile Volumes Market is an indicator that was created in May by developer Sergey Zhukov. The Profile volumes market indicator calculates the volume of ticks at each price level in a selected range. Volume is vital for determining the strength and therefore the importance of price levels.
The calculation range is established by the trader by scrolling two vertical lines. Thus the indicator allows following of the important levels in the different steps of the formation of the price of the symbol. A histogram of the volume profile can be displayed in the table (or removed from the table) by pressing the ON OFF button. When the chart period is changed, the range of calculation of the indicator also changes, which is ideal when estimating the accuracy of the levels in lower time frames. The
On-balance volume (OBV) is a technical trading momentum indicator that uses volume flow to predict changes in stock price. Joseph Granville first developed the OBV metric in the book Granville's New Key to Stock Market Profits.
Granville believed that volume was the key force behind markets and designed OBV to project when major moves in the markets would occur based on volume changes. In his book, he described the predictions generated by OBV as "a spring being wound tightly." He believed that when volume increases sharply without a significant change in the stock's price, the price will eventually jump upward or fall downward.
OBV=OBVprev+⎩⎨⎧volume,0,−volume,if close>closeprevif close=closeprevif close<closeprevwhere:OBV=Current on-balance volume levelOBVprev=Previous on-balance volume levelvolume=Latest trading volume amount
On-balance volume provides a running total of an asset's trading volume and indicates whether this volume is flowing in or out of a given security or currency pair. The OBV is a cumulative total of volume (positive and negative). There are three rules implemented when calculating the OBV. They are:
1. If today's closing price is higher than yesterday's closing price, then: Current OBV = Previous OBV + today's volume
2. If today's closing price is lower than yesterday's closing price, then: Current OBV = Previous OBV - today's volume
3. If today's closing price equals yesterday's closing price, then: Current OBV = Previous OBV
The theory behind OBV is based on the distinction between smart money—namely, institutional investors—and less sophisticated retail investors. As mutual funds and pension funds begin to buy into an issue that retail investors are selling, volume may increase even as the price remains relatively level. Eventually, volume drives the price upward. At that point, larger investors begin to sell, and smaller investors begin buying.
Despite being plotted on a price chart and measured numerically, the actual individual quantitative value of OBV is not relevant. The indicator itself is cumulative, while the time interval remains fixed by a dedicated starting point, meaning the real number value of OBV arbitrarily depends on the start date. Instead, traders and analysts look to the nature of OBV movements over time; the slope of the OBV line carries all of the weight of analysis.
Analysts look to volume numbers on the OBV to track large, institutional investors. They treat divergences between volume and price as a synonym of the relationship between "smart money" and the disparate masses, hoping to showcase opportunities for buying against incorrect prevailing trends. For example, institutional money may drive up the price of an asset, then sell after other investors jump on the bandwagon.
Below is a list of 10 days' worth of a hypothetical stock's closing price and volume:
As can be seen, days two, three, six, seven and nine are up days, so these trading volumes are added to the OBV. Days four, five and 10 are down days, so these trading volumes are subtracted from the OBV. On day eight, no changes are made to the OBV since the closing price did not change. Given the days, the OBV for each of the 10 days is:
On-balance volume and the accumulation/distribution line are similar in that they are both momentum indicators that use volume to predict the movement of “smart money”. However, this is where the similarities end. In the case of on-balance volume, it is calculated by summing the volume on an up-day and subtracting the volume on a down-day.
The formula used to create the accumulation/distribution (Acc/Dist) line is quite different than the OBV shown above. The formula for the Acc/Dist, without getting too complicated, is that it uses the position of the current price relative to its recent trading range and multiplies it by that period's volume.
One limitation of OBV is that it is a leading indicator, meaning that it may produce predictions, but there is little it can say about what has actually happened in terms of the signals it produces. Because of this, it is prone to produce false signals. It can therefore be balanced by lagging indicators. Add a moving average line to the OBV to look for OBV line breakouts; you can confirm a breakout in the price if the OBV indicator makes a concurrent breakout.
Another note of caution in using the OBV is that a large spike in volume on a single day can throw off the indicator for quite a while. For instance, a surprise earnings announcement, being added or removed from an index, or massive institutional block trades can cause the indicator to spike or plummet, but the spike in volume may not be indicative of a trend.
Average daily trading volume (ADTV)is the average amount of shares traded each day for a given stock. It can be a useful metric because high or low trading volume attracts different types of traders. Traders and investors can use ADTV to assess liquidity, analyze volatility, optimize trade execution, and manage risk. ADTV can be used alongside OBV and other indicators to evaluate the market's activity.
Volume-Price Trend (VPT) is similar to on-balance volume in that it measures the cumulative volume and provides traders with information about a security’s money flow. But whereas OBV looks at volume just according to whether the close was higher or lower, VPT looks at how much higher or lower it was. This helps determine a security’s price direction and strength of price change.
On-Balance Volume is a leading indicator: it produces predictions, but it doesn't provide specific information on exactly what happened or why. This can lead to wrong interpretations. OBV should be used alongside lagging indicators for better effectiveness.
On-balance volume (OBV) is a technical indicator that measures positive and negative volume flow and analyzes the trading direction. It shows as a single line that can provide insights into the intent of market players that investors can use to make trading decisions and identify where to buy or sell an asset. However, OBV doesn't provide specific information about the financial asset, which can lead to misinterpretations. Therefore, traders should balance OBV by using lagging indicators.
The parameters of change and relation allow customizing of the histogram. There are two modes of calculation of indicators. In Modetimer mode, the calculation of the indicator is based on the signal generated by the system’s internal timer, which allows you to work with it even when the market is closed.
In Modetick mode, the indicator is recalculated every minute, allowing you to track current changes in volume and check the operation of the indicator in test mode. The prompt automatically checks for holes in the quotation history and selects the smallest time frame with the full history as the basis, while the corresponding information is displayed in the comment.
Inputs from the Profile Volumes Market indicator:
In short, we are talking about an indicator that sets average price levels over a given period of time. This indicator can be useful for all traders trading with the stock price. It is a useful tool to establish the price levels where the volume is concentrated, and that can therefore act as supports or resistors.
The opinions of users who have tried this indicator are quite positive, and this is because they value the tool as useful for their trading systems. On the other hand, Sergey Zhukov, the developer of this indicator, is very active in the forums of the market MQL and helps all users of its tool answering all series of doubts or questions.
This indicator is available on the MQL market at a price of 40 USD. It is not available for rent, but there is a demo version so you can test the tool and see how valuable it can be for your trading style.
Technical indicators are heuristic or pattern-based signals produced by the price, volume, and/or open interest of a security or contract used by traders who follow technical analysis.
By analyzing historical data, technical analysts use indicators to predict future price movements. Examples of common technical indicators include the Relative Strength Index (RSI), Money Flow Index (MFI), stochastics, moving average convergence divergence (MACD), and Bollinger Bands®.
Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysts, who attempt to evaluate a security’s intrinsic value based on financial or economic data, technical analysts focus on patterns of price movements, trading signals, and various other analytical charting tools to evaluate a security’s strength or weakness.
Technical analysis can be used on any security with historical trading data. This includes stocks, futures, commodities, fixed-income, currencies, and other securities. In this tutorial, we’ll usually analyze stocks in our examples, but keep in mind that these concepts can be applied to any type of security. In fact, technical analysis is far more prevalent in commodities and forex markets, where traders focus on short-term price movements.
Technical indicators, also known as “technicals,” are focused on historical trading data, such as price, volume, and open interest, rather than the fundamentals of a business, such as earnings, revenue, or profit margins. Technical indicators are commonly used by active traders, since they’re designed to analyze short-term price movements, but long-term investors may also use technical indicators to identify entry and exit points.
There are two basic types of technical indicators:
Traders often use many different technical indicators when analyzing a security. With thousands of different options, traders must choose the indicators that work best for them and familiarize themselves with how they work. Traders may also combine technical indicators with more subjective forms of technical analysis, such as looking at chart patterns, to come up with trade ideas. Technical indicators can also be incorporated into automated trading systems, given their quantitative nature.
The following chart shows some of the most common technical indicators, including moving averages, the RSI, and the MACD.
In this example, the and day moving averages are plotted over the top of the prices to show where the current price stands relative to its historical averages. The day moving averages is higher than the day moving average in this case, which suggests that the overall trend has been positive. The RSI above the chart shows the strength of the current trend—a neutral , in this case. The MACD below the chart shows how the two moving averages have converged or diverged—slightly bearish, in this case.
In the dynamic world of forex trading, staying ahead of trend reversals is crucial for maximizing profits and minimizing risks. Traders are constantly in search of reliable indicators that can provide early signals of potential changes in market direction.
The BOS and CHoCH Indicator, designed for MetaTrader 4 (MT4), is a powerful tool that aims to highlight key market structure shifts and assist traders in identifying trend reversals. In this article, we will explore the functions, features, and practical applications of this indicator, empowering traders to make informed decisions.
With the BOS and CHoCH Indicator, you can leverage the widely-used ZigZag indicator to identify market swings. Ascending swings are plotted as blue dots, while declining swings are represented by red dots on the chart. This visual representation allows you to observe overall market behavior and identify potential areas of interest with ease.
The indicator focuses on two key signals: Break of Structure (BOS) and Change of Character (CHoCH). BOS occurs when the price breaks through a significant support or resistance level, indicating the continuation of the prevailing trend. On the other hand, CHoCH signals a potential trend reversal when the price reverses and breaks through the high or low of the previous swing.
The BOS and CHoCH Indicator equips you with valuable insights into potential trend reversals. Here are a few ways you can utilize this indicator to enhance your trading strategy:
The BOS and CHoCH Indicator is a powerful tool that can help you identify potential trend reversals in forex trading. By leveraging the Break of Structure (BOS) and Change of Character (CHoCH) signals, this indicator assists you in making informed trading decisions. With its customizable settings and visual representations of market swings, you can stay ahead of market shifts and seize profitable opportunities.
Remember to combine the indicators signals with additional analysis and risk management strategies for successful trading outcomes.
The BOS and CHoCH Indicator provides several customizable settings to suit your preferences. Heres a breakdown of the settings:
By customizing these indicator settings, you can adapt the BOS and CHoCH Indicator to suit your visual preferences and trading strategies. This personalized approach allows for a more effective and tailored trading experience.
In the ever-evolving world of forex trading, having the right tools can make all the difference. Trend Reader Indicator empowers traders with its advanced trend detection capabilities, visual clarity, and real-time alerts. Whether you're a novice or an experienced trader, this indicator is your key to staying ahead of the market trends and making more informed trading decisions.
Start trading with confidence today by adding Trend Reader Indicator to your trading toolkit and unlock the potential for greater profitability while reducing risk in your forex trading endeavors.
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