Volume Average Percent Indicator

The Volume Average Percent Indicator is a powerful yet easy-to-use tool designed for traders who want to evaluate trading volume relative to past activity in MetaTrader 5. By expressing volume as a percentage, this indicator helps identify unusually high or low market participation—key signals for spotting potential trend continuations and reversals.

What Is the Volume Average Percent Indicator?

This indicator calculates trading volume as a percentage relative to a selected period using an Exponential Moving Average (EMA). Instead of showing raw volume data, it highlights how current activity compares to historical averages.

A baseline level of 100% is used:

• Values above 100% indicate higher-than-average volume
• Values below 100% suggest lower market activity

How the Indicator Works

The Volume Average Percent Indicator displays colored histogram bars in a separate window:

• Green Bars – High volume during upward price movement (bullish strength)
• Red Bars – High volume during downward price movement (bearish pressure)
• Light Green / Orange Bars – Transitional or moderate volume conditions

Bars that exceed the 100% level signal strong market participation, often linked to institutional activity or breakout conditions.

How to Use the Indicator in Trading

This indicator does not generate automatic buy/sell signals. Instead, it helps traders interpret volume strength and align trades with market momentum.

Buy Signal (Bullish Setup)

• Green bars appear with increasing height
• Volume exceeds the 100% level
• Indicates strong buying pressure

In this scenario, traders may consider entering long positions, especially when supported by an established uptrend.

Sell Signal (Bearish Setup)

• Red bars appear and grow taller
• Volume rises above 100% during price declines
• Suggests strong selling pressure

This can signal an opportunity to enter short positions, particularly in a confirmed downtrend.

Identifying Market Reversals

The indicator is also useful for spotting potential reversals:

• A color shift (green to red or vice versa) may indicate changing sentiment
• Declining momentum despite high volume can signal exhaustion

Traders often use this alongside tools like RSI or support/resistance analysis for confirmation.

Key Advantages

• Displays relative volume strength clearly in percentage terms
• Uses EMA for smoother and more responsive analysis
• Helps identify high-impact trading zones
• Works across all timeframes and markets

Limitations

• Does not independently define trend direction
• Requires confirmation from other indicators or Price Action
• Not ideal as a standalone trading system

Final Thoughts

The Volume Average Percent Indicator is an excellent addition for traders who want deeper insights into market participation. By focusing on relative volume rather than raw data, it highlights key moments when trading activity significantly deviates from the norm.

For best results, combine it with trend analysis and complementary indicators to build a well-rounded trading strategy.