Percentage Volume Oscillator Indicator
Percentage Volume Oscillator (PVO) for MT5 provides BUY and SELL trading signals using volumes.
Description
The Percentage Volume Oscillator for MT5 resembles the classic MACD indicator with moving averages and a histogram. However, the primary data for calculating the indicator is the volume. The indicator is best suited for forex technical traders who use volume as an integral component of their technical trading strategies. Bullish and bearish trading signals are confirmed by both moving averages and bars of the indicator’s histogram.
The indicator is best suited for beginners and experienced traders. New forex traders can combine volume based trading signals with other technical indicators for confirmation.
However, advanced forex traders should remember that volume is an important component of breakouts and reversals. So a combination of trend based technical indicators and using the Percentage Volume Oscillator for MT5 indicator will provide the best results.
Percentage Volume Oscillator Indicator For MT5 Trading Signals
The above CHFJPY H1 price chart shows the Percentage Volume Oscillator indicator for MT5 in action. The indicator shows the zero line of the histogram in GRAY while bullish histogram bars are displayed in GREEN and bearish histogram bars in RED. Moving averages are shown in PURPLE and BLUE.
The indicator signals are based on moving average crossovers. However, the positive and negative bars of the histogram can filter these signals. Thus, forex traders must combine both moving averages and histogram bars to confirm the trading signal generated by the indicator.
If the BLUE moving average crosses the PURPLE moving average, it indicates a bullish trading signal. However, to confirm this as a bullish signal, the histogram bars must be GREEN and above the zero line. If all of the above signals match, the trader can enter the market with a BUY position. The best stop loss point is below the recent swing low, and the opposite signal may be the best point to take profits.
Similarly, a downward crossover of the BLUE moving average with the PURPLE moving average signals a BEARish market trend. However, to confirm this signal, the histogram bars must be RED and below the zero line. The best stop-loss point is below the recent swing low, while a profit-taking target on opposite trading signals looks reasonable. However, it is recommended to take profits with a good risk/reward ratio.
Technical forex traders should remember that volume is not the only component of a price reversal and volume cannot be used on its own to determine a trend. However, the undeniable truth is that rising and falling volumes are often associated with a reversal of a bullish or bearish trend.
Conclusion
The Percentage Volume Oscillator Indicator for MT5 combined with other trend following indicators will give the best results. However, forex traders need to understand the importance of volume and associate it with breakouts and reversals. Substantial volume plays an important role when the price is near support, resistance, channel or triangle. In addition, the indicator can be downloaded and installed for free.