Using cumulative delta volume analysis on forex allows traders to see behind the scenes while the price bars are forming.  Multicharts provides a superb charting platform with built-in cumulative delta charting.

An Introduction to the Power of the Cumulative Delta Volume Analysis in Multicharts on Forex

In this video, Gail Mercer, founder of TradersHelpDesk, joined Tom and Tommy O’Brien on the Bull-Bear Binary Option hour this morning to discuss patterns that form using cumulative delta volume analysis.  The first chart shows the pattern formed immediately prior to the FOMC announcement last week on the GBPUSD that caused the GBPUSD to drop over 50 pips after the announcement.  Then she goes on to show how the same pattern formed this morning on the EURUSD immediately preceding the ECB President Draghi speaking.  The last chart shows how buyers literally were buying the lows on the EURUSD after President Draghi’s speech.  The bear trap was completed once price failed to break through the prior low at 1.1531.

Since volume analysis is a leading indicator, it is a great trading strategy for using Out-of-the-Money binary options.  In these examples, price made over a 30 pip move on each of these patterns.  If trading the EURUSD, that is over seven strikes that price has moved because the EURUSD has a four pip strike width on the two hour Nadex binary options.

Tomorrow at 11am EDT, Gail will be presenting a free webinar on using volume analysis to trade binary options.