Introduction to swing index indicator
The swing index indicator is a volume-based mt4 indicator that is used to confirm a trend reversal using volume bars on the chart.
Volume bar size indicates the speed of price movements in a specific interval of time.
This volume is not the original volume in forex trading because it is a tick-based volume. It measures the speed of ticks in small intervals of time and shows the volume in the shape of bars.
How does the swing index mt4 indicator work?
This indicator predicts the trend reversals of the market. Each volume bar of the indicator represents the activity of trading in each candlestick. For example, a big volume bar means a big candlestick will form and a small volume bar results in a small candlestick.
Green and red color bars represent the bullish and bearish candlesticks on the chart respectively. Green color means bullish trend and red color means bearish trend.
A trend reversal occurs when a big volume bar results in a small candlestick. A big candlestick should form on the chart as a result of the big volume bar but it doesn’t happen sometimes and it results in a trend reversal.
Trading Signals
The swing index indicator in mt4 is totally based on the volume that’s why you should learn the volume spread analysis to trade using this indicator.
Buy signal
When a green climax forms in the indicator’s window then a bullish reversal happens. Means price changes trend from bearish into bullish.
Sell signal
When a red volume climax forms in the swing index indicator then a bearish reversal happens, it means the trend will change from bullish into bearish
Conclusion
Before trading using the swing volume index indicator in metatrader 4, try to learn about the formation of volume bars in forex. After learning VSA, you will be able to trade by using this indicator effectively.
Add other confluences of price patterns to increase the winning ratio of this indicator.
Make sure to backtest this indicator before trading on a live account.
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