What the increased level of volumes indicates?
Every year, the analysis of financial markets suffers from obvious changes and innovations. Some tools are changed by others, and the factors that mattered earlier, today do not have an impact on the market. Despite this, there are elements that have already been used for more than a hundred years and are classic kinds. One of these is the analysis of open trade positions and their volumes.
As you know, the main thing in the market is to know who is behind the price quotation and it determines their further movement. Is the current value of quotations on its lower border or there is still a further potential? Only data on purchases and sellers can testify about this. After all, if someone buys large volumes on the market, this is a double signal: first, the quotes for purchases will increase, and the speculators can make money on this, and secondly, this indicates that the market maker will provoke the growth of quotations on the basis of any supporting evidence. Knowing who and how much he sells, as well as who and how much he buys, you can more accurately make forecasts for fix apitrading in the financial market.
In turn, trading volumes can be simultaneously several sources of information for the fix apitraders:
- Lowered volumes indicate a lack of interest of the market players in this asset. Do not mix this feature with the lower volatility. For the lack of activity on the contrary can cause increased fluctuations when there are several players on the market who are able to bring down or to maintain the price. I strongly advise you to not trade in such a market, and even if you have generated signals on your trading strategy, it will be better to set them aside.
- Increased volumes on the contrary will point to an extremely active market, and in such circumstances it is easier to trade. If you see high volumes and a well-formed trend, then you can safely open positions on the trend, because most players, and most importantly, large players, set this movement for their trading operations. This can be observed after the release of high-profile fundamental news or publication of macro statistics.
- Horizontal volumes indicate the trader in those areas in which the price quotes have been for a long time in the fix apiforexmarket. These levels can tell the fix apitrader that support and resistance zones have been formed at precisely these points. This approach allows using pending orders to enter the market and trade within the support and resistance zones.
Undoubtedly, the best condition for the fix api trading is an active market, which is not based on high-profile fundamental data. That is why the most popular tool on the fix apiforex market is EURUSD, which trades 90% of all players. This allows you to build the entire trading strategies based on the same asset, where the volume of trading operations is almost at the same level.
Volumes allow you to more thoroughly and accurately build your forecasts. However, in the fix api MT4 trading terminal there is no full-fledged glass of prices, which does not allow you to obtain complete information about the current market state. But at the same time, there are software solutions (http://forexzzz.com/how-to-identify-the-current-players-in-the-foreign-exchange-market/), which allow you to trade on MT4 accounts, but at the same time to receive data from the cTraderterminal, which has the full depth of the market and, accordingly, the information on volumes. This software is suitable not only for receiving information about volumes, but it will be a complementary tool to each trading strategy, which is based on algorithmic principles of fix api trading.