The Volume and Volume Plus indicators in ShareKhan’s TradeTiger platform are essential tools for traders seeking to analyze market activity. Understanding their differences can significantly enhance trading strategies.
Volume Indicator
The Volume indicator displays the total trading volume for a specific period as a single yellow bar, regardless of the price action of the corresponding price candle. This means that whether the price closes higher or lower than the previous candle, the volume bar remains the same color. This representation provides a straightforward view of market activity, allowing traders to see the overall volume trends without the influence of price direction.
Volume Plus Indicator
In contrast, the Volume Plus indicator offers a more nuanced view of trading volume by using two colors: red and green. The volume bar is colored red if the price candle closes lower than the previous candle’s close, indicating bearish sentiment. Conversely, if the price candle closes higher, the volume bar is colored green, reflecting bullish sentiment. This dual-color system allows traders to quickly assess the relationship between price movements and volume, making it easier to identify potential trends and reversals.
Key Differences
- Color Representation:
- Volume Indicator: Always yellow, irrespective of price movement.
- Volume Plus Indicator: Red for downward price movement, green for upward price movement.
- Market Sentiment Insight:
- Volume Indicator: Provides a basic understanding of volume without context.
- Volume Plus Indicator: Offers insights into market sentiment by correlating volume with price direction.
- Trading Strategy Application:
- Volume Indicator: Useful for assessing overall market activity.
- Volume Plus Indicator: More effective for traders looking to make decisions based on price trends and volume correlation.
Conclusion
Both indicators serve distinct purposes in the trading toolkit. The Volume indicator is beneficial for a general overview of trading activity, while the Volume Plus indicator provides deeper insights into market sentiment by linking volume changes to price movements. Traders can leverage these indicators to refine their strategies and make more informed trading decisions on the TradeTiger platform.