What is the Volume Divergence Markers Indicator for MT4?
The Volume Divergence Markers Indicator (VDMI) is a technical indicator used to analyze market trends. It uses two volume indicators – the Moving Averages Convergence/Divergence and the MACD – to identify when prices are overbought or oversold. The VDMII signalizes that an asset’s Price is about to experience a reversal, and traders can use this information to make informed trading decisions.
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How to use the Volume Divergence Markers Indicator for MT4?
The VDMII compares the average volumes of each currency pair for the past n periods (where n is usually 12). If one currency pair’s volume increases more than the other’s during this period, buyers have become overextended and are prepared to sell at any cost. Conversely, suppose one currency pair’s volume decreases more than the other’s. In that case, sellers have taken control of the market and are willing to buy any asset regardless of its value.
Using these signals, traders can decide when TO BUY or SELL assets based on their portfolio’s personal risk preferences and goals.
Volume Divergence Markers Indicator MT4 trading settings
Volume divergence is one of the most critical indicators that traders can use to help make better trading decisions. This indicator helps identify situations where a security’s Price is moving in different directions and may signal an impending trend change.
Here are some forex volume divergence markers you can use in your MT4 trading strategy:
– A security’s Volume (24h) vs. Price (1m, 5m, 15m periods) deviation will be high when there is strong intra-day or intraday volatility. This indicates that buyers and sellers are increasingly competing for a limited supply of stock, which might lead to a price increase or decrease.
– A security’s Volume (5m periods) vs. Price (1m period) deviation will be low when prices move relatively steadily within a given timeframe – this usually occurs during stable market conditions with few changes in sentiment or news events affecting prices. It suggests that there isn’t much interest currently being displayed in the underlying asset, which could mean weak demand and possibly lower prices down the road.
Volume Divergence Markers Indicator Advantages
There are several advantages to using FVDMs over other indicators:
-They provide a more accurate depiction of market sentiment and volatility.
-Can identify potential turning points and reversals in price movements, which makes them useful for swing trading or day trading strategies.
-They can help traders anticipate short-term trends before they happen, which allows them to make better trade decisions based on actual market conditions rather than speculation alone.
Volume Divergence Markers Indicator Disadvantages
Forex volume divergence markers are a famous tool traders use to identify potential price reversals. However, there are a few disadvantages to using this indicator. First, it isn’t easy to use and requires significant experience in forex trading. Second, while the hand can provide helpful information, it is not always accurate. Finally, the hand can be very volatile and unreliable, making it risky for those without an experienced eye.
VDM Indicator installation on MT4
To install a Volume Divergence Markers Indicator on the MetaTrader 4 (MT4) platform, you can follow these steps:
- Download the indicator file from a reputable source and save it on your computer.
- Open the MT4 platform and click on the “File” menu at the top of the screen.
- Select “Open Data Folder” from the drop-down menu. This will open the folder where the platform’s files are stored.
- Navigate to the “MQL4” folder and then the “Indicators” folder.
- Copy the indicator file you downloaded earlier and paste it into the “Indicators” folder.
- Close the MT4 platform and then reopen it.
- Go to the “Navigator” window, which is located at the bottom of the screen.
- Click on the “Custom Indicators” folder, and see the indicator you just installed listed there.
- Drag and drop the indicator onto a chart to apply it.
- Configure the indicator’s settings as desired, such as the period of the divergence markers, and start using it to identify divergences between Price and volume.
It is important to note that it is always good to check the authenticity of the source you are downloading the indicator from and also make sure you double-check the compatibility of the hand with the version of MT4 that you are using. Also, it’s important to note that divergence markers, like any other indicators, should be used along with other analysis methods, such as trend analysis, support and resistance levels, and other indicators, to make a more informed trading decision.
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Conclusion
In this article, we have looked at the divergence markers indicator on the MT4 platform and how to use it to identify divergences between Price and volume.