Does Forex Volume Matter? Yes, It Does!

OANDA:EURJPY   Euro / Japanese Yen
Forex volume is rarely used in trading. There is a good reason for this. The currency market is a decentralized market where trading operations are carried out outside the exchange. This means that there is no formula for volume or method for tracking the number and size of contracts as in the stock market.

How do I measure volume in Forex?
Volume is like the air we breathe. Without volume , it is impossible to make the right trading decision. Volume is what makes prices move forward and creates trends. If you are a day trader, trend trader, or swing trader, you need volume to see the price move. Without volume , we can't make a profit. When there is no volume , we usually lose money. Thus, it is important not to ignore the volume analysis on Forex.

Why is it important to use volume indicators in Forex?
Very few traders know how to use volume analysis to increase their profits and minimize losses. Many traders don't understand why volume analysis is a powerful tool. We can even identify several types of Forex volume indicators available on most trading platforms. But, oddly enough, most traders don't know how to use volume indicators to maximize their profits.

Volume is mostly useful because of its ability to draw attention to unusual purchases or sales. The price usually moves from periods of low-volume activity to high-volume activity. If you notice this heavy trading activity, you can trade alongside major players.

High volumes of purchases and sales can generate trends and be catalysts for changing the direction of the trend. Volume analysis can help you see these trends before they are visible on the price chart itself.

Note: On hourly example EurJpy chart, you see that in between hours of 10 pm to 10 am PST/CA/USA is best time for me to trade, why? highest liquidity and volumes- covers end of Asian session-Beginning of London and London/NY session overlap- trade with big banks, they are the air that Forex needs to move.


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