[ThePhoenix]

Originally Posted by petefader

OK, I will start with the basics.

I use the "volumes" indicator that comes with mt4. The bars that appear tell you the amount of ACTIVITY per candle (if you are using candles for price, which I mainly do). So, on a 1 min chart, each volume bar tells you the amount of activity that occured during the coresponding 1 min price candle.

So, we now know the amount of activity per 1 min candle, higher volume bar means more activity. The next thing to determine is IF it's buying or selling activity. The most basic way to determine that is to ask "what did the price do". If you see price moving up during that 1 min candle, and the volume bar is also high, we can say there is more "buying" activity.

BUT, buying AND selling activity can occur on a 1 min candle as well. How do we know which one has the increased volume?? to put it another way, the price candle may be green BUT, what if it has a big wick on top..indicating selling as well. If you watch this play out in real time, you can determine what in that price candle cause higher volume, the down or up movement on our price.

Another thing to know is that very high volume spikes can mean buying and selling in large amounts, and reading that can be tricky. That usually happens when for example, buyers made a final push up to resistance, then changed to a sell postion, all during that one candle. So, that could cause a volume spike...lots of buyer AND sellers during that minute.


OK, that alot to absorb for now I think. I will be in my chat room if anyone wants to join:


just make up a user name for yourself.

Why do you need a volume indicator? Candles tell you all you need to know about activity. Seems redundant to me.