Simple Volume Forex Strategy

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:

  1. 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.
  2. 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:

  1. 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.
  2. 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:

  1. 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.
  2. 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:

  1. 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.
  2. 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

Download the Simple Volume Forex Strategy

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.

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