Volume measures the total number of units traded during a given period. In forex, true volume is unavailable (decentralized market), so tick volume is used as a proxy.
Volume in Forex
Forex doesn’t have centralized volume data. Instead:
- Tick volume — Number of price changes per candle
- Correlates well with actual volume
- Available on all forex platforms
Volume Analysis Principles
- Volume confirms trend — Rising price + rising volume = strong trend
- Volume precedes price — Volume changes often signal reversals
- High volume breakout — More reliable than low volume breakout
- Low volume pullback — Healthy in an uptrend
Volume Indicators
| Indicator | Use |
|---|---|
| OBV (On Balance Volume) | Cumulative volume flow |
| Volume Profile | Volume at specific prices |
| VWAP | Volume-weighted average price |
Key Points
- Always confirm breakouts with volume
- Divergence between price and volume signals weakness
- High volume at support/resistance = significant level
- Volume spikes during news events