Reading volume on the EURUSD forex pair is the topic of today’s video.  This is an advanced trading skill that uses the Directional Volume indicator for TradeStation, Multicharts, and NinjaTrader8 to identify who is in control of the price bars.  Reading volume is also combined with candlestick patterns for confirmation.

Reading Volume on the EURUSD Forex Pair

The directional volume indicator identifies the total buyers and sellers on each bar plus who controlled the bar at the end (hash mark above zero is buying power and below zero is selling power).

In this video, Gail Mercer, founder of TradersHelpDesk, reviews the volume patterns on the EURUSD this morning prior to the upside move.  Basically, buyers took control around 3am.  However, as often is the case, price will go back and test the prior low.  In this case, they failed to move below the previous low and sellers were decreasing on the test.  This indicates that more likely than not price would go up to the ATR.

Price breaks through the ATR after a low is formed in which buyers stepped in and took control (red volume bar with the hash market above zero).  This is also referred to as a transition from selling to buying.  Currently with the Stochastics overbought, a test for sellers, which will likely occur at the blue ATR, is likely.