Buy Sell Volume Indicator

The Buy Sell Volume Indicator is a straightforward indicator that indicates the trend’s direction. The indicator displays a histogram beneath the chart in the bottom pane. Brown and green bars make up the histogram. The color of the bars indicates the trend’s direction. The indicator can be used on any timeframe by traders.

What is the Buy Sell Volume Indicator?

The Buy Sell Volume indicator aids in determining the price movement’s strength and weakness. Many traders seek to join a bullish or bearish trend in the real market, depending on which exhibits greater strength in the background. There are numerous approaches for determining the strength of a trend. Volume is one of the most important indicators that traders evaluate when determining the bullish and bearish power behind a breakout or trend following move.

The Buy Sell volume indicator constantly compares the strength of bullish and bearish price movements. However, it does not provide a clear buy/sell indication. Instead, it assists you in filtering and selecting the ideal trading configuration based on volume strength.

Setting up the Buy Sell Volume Indicator
Setting up the Buy Sell Volume Indicator

Buy Sell Volume Indicator Strategy

To illustrate market volume, the Buy Sell volume indicator employs two dotted lines in green and brown. In addition, to validate bullish and bearish momentum, the indicator generates a histogram of the same colors between these lines. There is a rise in bullish volume when the green histogram is pointing up. We interpret this as a possible bullish move. A downward-facing brown histogram, on the other hand, implies bearish volume. In such a case, we can assume that the price is ready for a bearish move.

Buy Signal

This could be your checklist for a buy trade:

  • When the indicator’s histogram bars turn green.

Once this event occurs:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the histogram bars turn brown.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Buy Sell Volume Indicator Buy Setup
Buy Sell Volume Indicator Buy Setup

Sell Signal

This could be your checklist for a sell trade:

  • When the indicator’s histogram bars turn brown.

Once this event occurs:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the histogram bars turn green.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Buy Sell Volume Indicator Sell Setup
Buy Sell Volume Indicator Sell Setup

Buy Sell Volume Indicator Pros & Cons

Pros

  • The Buy Sell Volume Indicator informs the traders on the direction of the prevailing trend.
  • This indicator can also predict possible trend reversal zones so that traders can act accordingly.

Cons

  • The color change of the histogram bars may sometimes mistake a trend correction for a trend reversal, and vice versa.
  • This indicator may not be very suitable for a consolidating market on smaller timeframes.

Conclusion

A histogram with red and brown bars is generated by the Buy Sell Volume Indicator. Using the red and brown bars, traders can enter and exit trades. The Buy Sell Volume Indicator may be useful to have in your trading toolbox. Maintaining realistic expectations, on the other hand, is critical. It, like any other technical analysis tool, is not capable of producing 100% accurate signals. As a result, this forex indicator occasionally produces incorrect signals. Its performance will vary greatly depending on market conditions. You are free to build your own trading strategy around it.

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