Volume Behavior

Volume is an important part of understanding the behaviour of instruments. This Indicators colours the candles/bars according to whether the volume for that time period of the candle is an Accumulation or Distribution candle or in fact if it has less volume that the previous candle. This simple tool can help traders of any instrument that involves volume to instantly visualise this volume behaviour to help confirm trade directions and more importantly to identify when a move is running out of juice and will aid in making trade management decisions.

What do you get

Volume Behavior for Motivewave

Visuals are important in trading. They encapsulate valuable data in a user-friendly format, so you don’t have to manually crunch numbers. That’s exactly what the Volume Behavior for Motivewave is all about. It has colored candles that can provide smart trading insights.

With the Volume Behavior for Motivewave, you can easily determine the presence of accumulation or distribution. And the best thing is that you can do so at a glance. All that you need to do is look at the color of the candle. This can also help you gauge trading volume.

What is Accumulation and Distribution?

If you’re a new trader, you might be clueless about the differences between the two. In a nutshell, accumulation refers to the gathering of more assets. This is rooted in the assumption that the market is favorable for buying.

On the other hand, distribution refers to selling assets. This is a way to unload your portfolio and make some money while preventing catastrophic losses.

Now, there’s an important question to answer — when should you accumulate and distribute? This is one topic that warrants a lengthy discussion. But if you’re looking for a simpler alternative to identifying your next move, the volume behavior indicator can be your savior. It lets you know whether you should accumulate or distribute depending on candle colors.

What the Colors Mean

As earlier mentioned, you can see candles with different colors. To interpret such, you must know the meaning of the candles. If it’s green, then it means that it’s an up candle and the volume is higher. Meanwhile, a gray candle is also an up candle, but it denotes a lower volume.

The up candles equate to an accumulation phase. It means there is more buying activity. The market is gaining more momentum when it’s green. Meanwhile, it starts losing juice when it turns gray, which means that fewer people are buying.

On the other hand, the red is a down candle, showing a higher volume than its predecessor. Further, a cyan candle is also a down candle, but it represents a lower volume.

If you see the down candles, then know that you’re in the distribution phase. The candle turns red as the volume starts going down. It turns cyan when it goes lower than the previous candle, which can also be a good sign to tighten your ropes. This can be a great way to manage risks and prevent catastrophic losses.

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