The Simple Volume Forex strategy measures how many times any forex pair has been bought or sold over a given period of time.
It then transforms this volume information into a very powerful tool that is often overlooked by a lot of traders.
A rising market should register a rising volume.
Meanwhile, the strategy also considers increasing price that is accompanied by decreasing volume as a possible exit signal due to the lack of interest, or a signal pointing towards likely reversal.
To wrap your head around this strategy, you should always consider the following reminders i.e. price hike (or drop) on little volume is not a decisive signal, while same price scenario that is accompanied by large volume is a strong signal that something has fundamentally changed within the currency pair.
Chart Setup
MetaTrader4 Indicators: aliev-fx-volumes.ex4 (Inputs Variable Modified; BarsToCount=900), holt-double-exponential-smoothing.ex4 (Inputs Variable Modified; Estimate period=42.99, Trend period=20.0) guppy-multiple-moving-average-long.ex4 (Default Setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week
Recommended Trading Sessions: Any
Currency Pairs: Any pair
Download
Download the Simple Volume Forex Strategy
Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a bullish trade if the following indicator or chart pattern gets put on display:
- If after a range bound or bearish market, a sharp rising volume (rising blue histogram) is recorded, plus market sessions showing periods of decreasing volumes on the aliev-fx-volumes Metatrader 4 forex indicator (see Fig. 1.0), a likely bullish signal is said to be on the horizon.
- If red lines of the guppy-multiple-moving-average-long indicator intersects the lime green line section of the holt-double-exponential-smoothing indicator in a bottom up fashion as depicted on Fig. 1.0, price is said to be taken higher i.e. a trigger to buy the selected forex pair.
Stop Loss for Buy Entry: Place stop loss below the most recent swing low price.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit from all trades if the following rules or conditions takes precedence:
- If price becomes range bound or if during the course of price action, the aliev-fx-volumes indicator displays a sharp increase in volume (red histogram that sits above the last few low volumes depicting histograms), it is a trigger to exit or take profit at once.
- If the red lines of the guppy-multiple-moving-average-long indicator intersects the orange line section of the holt-double-exponential-smoothing indicator, an exit or take profit is recommended. Alternatively, an exit or take profit is triggered when the line of the holt-double-exponential-smoothing indicator turns orange (see Fig. 1.0).
Sell Entry Rules
Go short if the following setups gets displayed successfully on the activity chart:
- If after a range bound or bullish trend, a sharp rising volume (rising red histogram) is recorded, plus market sessions showing periods of decreasing volumes on the aliev-fx-volumes Metatrader 4 forex indicator (refer to Fig. 1.1), a likely bearish signal is said to be looming.
- If red lines of the guppy-multiple-moving-average-long indicator crosses the orange line section of the holt-double-exponential-smoothing indicator in a top downward fashion as illustrated on Fig. 1.1, price is said to be pushed lower i.e. a trigger to sell the designated currency pair.
Stop Loss for Sell Entry: Place stop loss above the most recent swing high price.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If price becomes range bound or if during the course of price action, the aliev-fx-volumes indicator displays a sharp increase in volume (blue histogram that sits above the last few low volumes depicting histograms), it is a trigger to exit or take profit immediately.
- If the red lines of the guppy-multiple-moving-average-long indicator intersects the lime green line section of the holt-double-exponential-smoothing indicator, an exit or take profit is recommended. Otherwise, an exit or take profit is triggered when the line of the holt-double-exponential-smoothing indicator turns lime green (see Fig. 1.1).
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The aliev-fx-volumes.ex4 indicator is an improved variant of standard Volumes indicator, which simplifies working with trading volumes and VSA (Volume Spread Analysis) methods.
The holt-double-exponential-smoothing.ex4 is a trend following indicator that is essentially used for forecasting but not as an average.
It uses linear forecasting in carrying out its forecasting method.
The guppy-multiple-moving-average-long.ex4 indicator is a variant of the Guppy Multiple Moving Averages (GMMA) and is deployed when spotting changing trend, and it uses a method that combines two groups of moving averages with varying time periods.