You will then have created your boundaries, the majority of assets will not move outside of these lines. If the asset you are looking at is very close to one of the boundary lines you should consider placing a trade which is the opposite of the current trend.

Alternatively, if it currently near the middle but moving in one direction you could place a trade with the asset movement. Volume is an important technique to confirm the way you are reading the chart and your gut instinct. If there is a large amount of movement on the market then many traders have picked up n the upward or downward trend of an asset and are attempting to make a good return trading its trend.

By combining the volume with the highs and lows on the average price candle you should be able to predict the turning point. You can then place a trade which goes against the majority movement in the market and you should see a correspondingly high return as your trade seems more risky than going with the market.

It is vital to consider your trade carefully before placing it; if the volume movement is high; and you have calculated the highs and lows correctly, then timing is crucial.

You need to trade just before it peaks and reverses; this will allow you to make the maximum possible return, and, provide a great sense of satisfaction! Toggle navigation. TOP3 ROBOTS ROBOT RATING BinBot Pro Review 5. Subscribe To Trading Secrets.

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Part 1 Is it Possible to Become a Millionaire While Trading Binary Options? TOP3 BROKERS BROKER RATING BinaryCent Review 5. Share InvestManiacs. Volume Based Binary Option Trading. WASP 5 minute binary options trading is a kind of trading that is related to scalping as an expiration time is very short yet with many entry points and high profits.

InvestManiacs advise you to use only Using the Binary options Bollinger Bands Perhaps one of the most popular tools available to assist in choosing the right trade is the binary options Bollinger bands. The principle behind this tool was developed by John Bollinger, hence th The MACD features are 26 for the dynamic average, Turtle Strategy Trading Turtle strategy trading is a unique concept which appeared as a result of a long bet between two traders- whether it is possible to teach a usual person profitable trading on Fo Well, the first situation shows the presence of a reversible trend.

And the second scenario indicates temporary fluctuations. The volume of assets and their price trend must be in the same direction for a favorable trading environment.

And if the price increases, the volume will also increase. You can also understand the stability of the market simply by seeing the volume. For instance, if the volume and price of an asset moves in the same direction, it means the trend will be stable. However, if they are in the opposite direction, it shows trend will get weak. Ideally, volume is measured using two methods, i.

The direct way of measuring volume is also one of the simplest methods. Multiple trading software has started showing volume data directly into the trading chart. Most of the time, volume is denoted by bars. A long bar shows high volume, whereas a short bar shows less volume. You can use this information while making a trade. This way, your chances of winning a huge payout increase. You can measure the volume of an asset by using technical indicators, like Money Flow Index MFI. Measuring volume using this indicator requires you to do quick calculations to compare the rising to fall period.

That means the indicator has multiple lengths of each period with volume. Then the sum of rising periods is put in relation to the sum of falling periods. So, the generated result is between 0 to Here, a reading of 0 means money has flowed out of the asset. And reading of indicates money has flowed in the asset. Lastly, a reading of 50 means the amount of money flowing out and in is the same. Trading volume with binary options is as simple as calculating volume with binary options.

For trading directly, single or multiple candlesticks can be used. Whereas, for trading using technical indicators, MFI can be used. Check the reading of the MFI indicator. Using volume in binary options trading can enhance your chances of making a winning trade.

It is because you can easily identify profitable trading environments and save yourself from making mistakes. Along with this, you should also have a good understanding of how trading binary options is possible with volume. Lastly, you need a good broker and an excellent trading strategy. Then you are all set to win a huge payout. Menu Learn trading Binary Options CFD Day trading ETFs Futures Trading Books Calculators Commodity Trading Copy Trading Order Types Portfolio Price Action Swing Trading Trade Trader Trading Indicators Trading Strategies Options Charts Candlesticks Chart Pattern Technical Analysis Forex Crypto Crypto Exchanges Stocks Broker Platforms Software cTrader MetaTrader 4 MetaTrader 5 Trading Apps TradingView CFD Broker Crypto Broker Forex Broker Trading Accounts Glossary.

What is volume? Example of how volume works? Most people think that volume measures the number of trades. But in reality, it calculates the number of assets. For example, a value of states that in a given time, assets were traded. So, it does mean trades were made.

Volume is highly relevant to binary options traders. It can help you identify profitable trading opportunities and avoid bad ones. This article explains how binary options traders can use trading volume for their trading. With this information, you will immediately be able to add these values to your strategy and trade binary options with added confidence.

The volume defines how many units of an asset changed hands during a period. For example, when you are looking at a price chart with a period of 10 minutes and the last period had a volume of 1,, 1, stocks swapped hands during this minute period. Some traders would argue that it is unimportant whether the overall volume is the result of one large trade or many small trades. What matters is the overall relationship between demand and supply, and nothing else.

Also, it is important to understand that it only measures traders who buy or sell an asset. Binary options traders only make predictions about what will happen to the price of an asset, they neither buy nor sell it. Therefore, the volume ignores binary options. Some newcomers try to use this value to understand which assets are popular with binary options traders. That is not what the indicator does.

In both situations, the market has shown a strong movement. In the first example, it jumped by 10 percent, in the second example only by 3 percent. Nonetheless, the second example would offer the better trading opportunity. The volume helps you understand why:. Of course, most real-life trading situations will be less black and white than this example.

But the volume can nonetheless help you understand the importance of each single period. When a period has a high volume, its movements are usually more important to future price action than the movements of periods with a lower volume. Even during trends, periods in the main market direction often show a higher volume than periods against main trend direction. By monitoring this, you can understand what is happening.

The simplest way of measuring volume is direct. Most chart software offers a tool that can draw the volume directly into your chart. Sometimes, the tool is active by default, sometimes you have to add it manually but is almost always there. In the chart below, the volume is symbolised by the thin upwards bars at the bottom of the chart. The length of the bars indicates the volume of the period. As you can immediately see, the figures vary heavily.

To understand how the volume can help you trade, take a look at the last two candlesticks. After a sideways movement with relatively low volume, the market started to fall in the second-to-last period but eventually closed in the plus. Experienced candlestick analysts will immediately recognise this candlestick as a hammer.

The hammer indicates upwards momentum because the market apparently turned from a strong downwards movement to a strong upwards movement during the period. This movement is likely to carry over to the next period. The problem with the hammer is that it is unreliable when traded alone. During the previous sideways movement, the market formed quite a few hammers but always failed to act to continue to rise.

The last hammer was different, but how are traders supposed to distinguish false signals from good ones? When you look at the previous hammers, you will see that they all featured a low trading volume. This is why their implications were weak — not many traders backed the movements, they might be the result of just a few errant trades. The hammer in the second-to-last candlestick featured a much higher trading volume. Its bar is more than twice as long as the previous bars, which implies that something motivated traders to buy during this period.

Backed by many traders, the implications of the last hammer are much more significant than those made by the earlier ones. Once you see this hammer, it would be a great time to invest.

The following large upwards candlestick is the likely outcome of the high volume. This is why this analysis can help you to filter signals and understand the importance of single candlesticks. A sudden rise in volume very often indicates that a candlestick is of high importance and that the market will continue to move in the direction it implies. Often, it starts a strong movement. Some technical indicators create volume based predictions about what will happen to the price of an asset.

There are too many technical indicators that consider the volume to present them all at this point, so we will focus on the most popular of these indicators: the Money Flow Index MFI. The MFI compares rising to falling periods.

It multiplies the length of each period with its volume and multiplies it with the volume. It then puts the sum of all rising periods in relation to the sum of all periods with falling prices. The MFI displays its result as a value between 0 and that indicates the percentage share of volume-weighed rising prices. The volume is the weighting factor that determines the importance of each single period of the MFI.

This is why the MFI can open your eyes to completely new insights about what is going on in the market. While you can analyze the price action and the volume on their own, it is difficult to combine them.

There is simply too much data to make sense of it. The MFI probably is the most popular volume-based technical indicator. There are many other technical indicators that use the volume, too. For example, you could consider trading one of these indicators:. These and many other volume-based indicators can provide a solid basis for a binary options trading strategy.

For binary options traders, there are two ways of trading the volume that relate to the two ways of measuring the volume:. This is the simplest and most direct way of trading the volume. You can trade two kinds of signals:. As you can see, this strategy is simple.

Identify the direction that shows the higher volume and invest accordingly — that is it. This strategy largely depends on the indicator that you choose as the basis, but we will once again stick with the most popular volume-based technical indicator, the MFI.

As we already explained, the MFI creates a value between 0 and You can find profitable trading opportunities when the MFI drops below 20 or rises above These areas are considered overbought over 80 or oversold below 20 , which makes a return into the normal area likely. As soon as the MFI crosses the back into the normal areas, you know that there must be momentum and potential for a long movement, which is why now is a great time to invest. You could also use a one touch option, but this would be a very risky strategy you should only trade with the help of additional indicators that can predict the length and the strength of the movement.

The volume is highly relevant to binary options traders. It can help you identify profitable trading opportunities and avoid bad ones, which can combine to significantly increase your profits. You can trade volume directly, by analysing single candlesticks or multiple candlesticks, or indirectly through technical indicators such as the MFI.

Either way, the volume should be a helpful addition to your trading strategy. Toggle navigation. Compare brokers Reviews Quotex Binary. Volume And Binary Options.

Volume in binary options trading matters because by measuring volume, you can save yourself from making terrible trading mistakes. The volume is the weighting factor that determines the importance of each single period of the MFI. It multiplies the length of each period with its volume and multiplies it with the volume. At last, MFI displays a value that is between 0 to That is not what the indicator does. IP addresses , for example for personalized ads and content or ad and content measurement.

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