Volume Breakout Indicator

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On high volume, this breakout indicator will identify directional breakouts. It examines the chart to determine when the volume and volatility are at their peak. For major currency pairings, this usually corresponds to the start of the London market. It is normally the start of the New York trading period for commodities.

Figure 1: EURUSD volume breaks are being monitored.

Figure 1: EURUSD volume breaks are being monitored in forexop.

When a breakthrough event is observed throughout this period, the indicator will generate a buy or sell signal. The event time can also be explicitly overridden.

Figure 2 depicts a single breakout occurrence.

Figure 2: A single forexop breakthrough event

Figure 3: Hourly volume histogram

Figure 3: Hourly volume histogram forexop

Here are several examples:

Detecting breakouts at the start of trading sessions in London, Tokyo, and New York

Economic data, monetary policy pronouncements, and other news trading breakouts

Breakout trading at any regular time period

Market behavior and hourly volume/volatility analysis

Peak Volume Directional Breakouts

When there is a significant number of false breaks, breakout techniques suffer. Instead of trading on every possible breakout, this indicator just searches for the most likely scenarios. The most powerful breakout occurrences frequently occur when volume is rapidly increasing. These events frequently coincide with the inauguration of major markets like as London, Tokyo, and New York.

Figure 4: EURUSD H1 Example

Figure 4: EURUSD H1 Example forexop

The indicator functions as follows:

When it is loaded, it will look at the pricing history to determine peak daily volumes.

The predicted peak volumes for each hour of the day are displayed.

Price fluctuations are monitored before and shortly after the highest volume hour.

When a breakout is recognized, it generates buy and sell alerts.

This indicator only trades during one time of day, when volume and volatility are at their highest and breakout events are most likely to occur. This breakout method is solely intended for short-term transactions, such as day trades. The best periods range from 5 to 30 minutes.

Maximum Volume

There are no direct volume measurements for foreign exchange available. As a result, the indicator employs volatility research to forecast when volume will increase or decrease during the day.

The graph below depicts the volume of the FX majors over a 24-hour period.

Figure 5: Analysis of peak volume

Figure 5: Analysis of peak volume forex op

Instead of having the indicator detect peak volumes automatically, you may override this and choose any time to monitor. This can be handy when trading breakouts on economic data releases, for example.

This article contains examples of volume breakout tactics.

Figure 6 shows EURUSD 5M trades based on indicator output indications.

Figure 6: EURUSD 5M trades executed based on indicator output signals forexop

Metatrader 4 and Metatrader 5 are both supported.

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