What is the Hidden Gap Volume Indicator?
The Hidden Gap Volume Indicator is a technical analysis tool that is designed to help traders identify potential buying and selling opportunities in the forex or stock market. It works by analyzing the volume of trades that are occurring in the market and looking for discrepancies or gaps between the volume of trades and the price action of a particular currency pair or security. These discrepancies can often indicate potential buying or selling pressure and can help traders make more informed decisions about when to enter or exit the market.
How to spot the Hidden Gap Volume Indicator?
The Hidden Gap Volume Indicator visualizes volume data using four different colors of bars. A blue bar signifies that the current trading volume surpasses the volume of the previous candle. A red bar signifies a significant decrease in market volume, indicating less trading activity. Gray bars appear when the current volume exceeds the volume of the last 20 intervals, while red bars indicate that the volume has declined by more than the volume of the last 20 candles. The indicator also includes a dark green line that shows the 20-period moving average and a dotted line above it that represents a higher moving average based on a 30-period standard deviation.
If the volume bars surpass the primary moving average, it suggests that the market momentum is supporting the current price action. For example, if the price breaks above a key resistance level and the indicator displays a blue volume bar above the moving average, it could signify that the breakout is valid and that there may be an uptrend ahead. Conversely, if the price chart is forming a bearish reversal pattern, it is important to confirm that there is positive volume supporting the movement before placing a sell order. If the price is falling and the volume is negative or depicted as a red bar, it may signify that the current bearish move is not likely to last. Gray volume bars suggest that the price is likely to continue moving in the current trend direction, while red bars indicate that the market is in a state of consolidation and may not be suitable for trading.
Hidden Gap Volume Strategy
Buy Signal
- The indicator may show a gap between the volume of trades and the price action, indicating a potential buying opportunity.
- The indicator may show an increase in the volume of trades, indicating increased buying pressure.
- The indicator may show a divergence between the volume of trades and the price action, indicating a potential reversal and potential buying opportunity.
Sell Signal
- The volume of trades may not match the price action, which could suggest a potential opportunity to sell.
- If the volume of trades decreases, it may indicate that there is less pressure to sell.
- If the volume of trades and the price action do not match, it may indicate that a reversal is possible and that there may be a chance to sell.
Hidden Gap Volume Indicator Pros & Cons
Pros
- Can help identify potential selling opportunities.
- Can highlight divergences between volume and price action, potentially indicating a reversal.
- May provide insight into the strength of the current trend.
- The Hidden Gap Indicator clearly displays signal buy indication the volume of a certain financial pair.
Cons
- The Hidden Gap Indicator may lag during market range or volatility.
Conclusion
The Hidden Gap Volume Indicator is a tool that can be used to identify potential opportunities to buy or sell in the foreign exchange market. It does this by analyzing the volume of trades and looking for discrepancies between volume and price action. Traders can get the Hidden Gap Volume Indicator on their trading platform, such as MT4. It is usually shown on a chart along with the currency pair or security’s price movement. If the indicator shows a discrepancy between the volume of trades and the price action, it might suggest a potential opportunity to buy or sell. Likewise, an increase or decrease in trade volume may indicate increased or decreased demand to buy or sell.
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