The Cumulative Volume indicator for MT5 is a Forex technical indicator that analyzes the cumulative volume flow between the bulls and bears in the financial markets. It displays the sums of the trading volume over a period, which enables traders to make informed trading decisions.
Therefore, the indicator is an incredible trading tool that can help traders determine the strength and probable direction of the market at a glance. A high cumulative volume during an uptrend suggests a strong bullish market condition, while a high volume in a downtrend depicts a strong bearish market condition.
Conversely, low cumulative volume in an uptrend/downtrend suggests weak bullish or bearish trend conditions, respectively.
Features of the Cumulative Volume Indicator for MT5
The indicator uses histogram bars to depict the rise and fall in the cumulative volume of an instrument. The green bars indicate the bulls’ volume, while the red bars are the bears’ volume. So, the histogram bars above the zero line suggest bullish sentiment, while bearish sentiment is when the bars are below zero.
Benefits of Using the Indicator
- Trend Confirmation: The indicator tracks the cumulative volume in the market; thereby enabling traders to determine the market trend direction with precision.
- Early Market Reversal: The indicator can help traders detect potential trend reversal signals in the market. For example, if the indicator’s histogram bars cross below zero while the trend is bullish, it might indicate an early sign of a trend reversal to the downside.
- Confluence: Finally, the indicator can enhance trend analysis and trade execution when used in conjunction with price action/other technical indicators.
Indicator Settings Description
The indicator comes with the following customizable settings:
Period: Determine the incubator’s period for volume analysis.
Combined: Enables/Disables the display of bullish and bearish cumulative volume.
Relative: Defines how the cumulative volume is displayed.
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