Understanding market volume is essential for every serious forex trader. The Volume Average Indicator offers a simple yet effective way to analyze buying and selling pressure directly on your MT5 charts. By combining a volume histogram with a built-in moving average (MA Volume), this indicator helps traders interpret market activity more accurately. The Volume Average Indicator is especially valuable because MT5 does not allow adding a moving average directly to standard volume data—making this tool a convenient solution.
When applied to a chart in MetaTrader 5, the indicator displays colored volume bars along with a fast and slow moving average calculated using volume—not price. The color of each bar indicates both price direction and the relationship between the fast and slow MA Volume:
Light green: Price rising; fast MA Volume < slow MA Volume
Bright green: Price rising; fast MA Volume > slow MA Volume
Yellow: Price falling; fast MA Volume < slow MA Volume
Bright red: Price falling; fast MA Volume > slow MA Volume
These visual cues make it easier to interpret which side—buyers or sellers—holds strength during a given period.
The MA Volume is a standard moving average applied to volume data instead of price. It smooths out raw volume readings, helping traders identify spikes, absorption, or weakness in market activity. Since MT5 does not support overlaying an MA on its default volume indicator, the Volume Average tool becomes essential for traders who depend on volume analysis.
Many traders attempt to add an MA to the default volume histogram but quickly discover that MT5 restricts applying moving averages to indicators in its subwindow. This limitation makes classic volume analysis more challenging.
The Volume Average Indicator solves this by integrating both components—histogram + MA—into one streamlined tool. This adds clarity and eliminates the need for complicated workarounds.
While the indicator does not generate traditional buy/sell arrows, it serves as a powerful assistant for volume-based analysis—a method closely tied to understanding institutional activity and supply/demand imbalances.
In a USDJPY M30 example, volume analysis can reveal bullish accumulation:
Bearish candles showing narrow bodies and high volume often suggest that large players are absorbing sell orders.
These candles indicate that smart money may be positioning for a bullish reversal.
As volume pressure shifts, the market begins to rise—offering a potential long entry.
This method helps traders anticipate moves driven by major market participants rather than reacting to late signals.
In a GBPUSD H1 scenario:
A large bullish candle appears with very high volume, indicating strong demand.
The next candle rises more slowly despite increasing volume—showing that supply has entered the market.
Using the high and close of this candle, traders can draw a supply zone.
When price retests this zone, bearish setups or false breakouts can provide short opportunities.
This structure is common when the market transitions from demand dominance to supply dominance.
Non-repainting data
Simple, customizable settings
Suitable for intraday and long-term charts (M1 to monthly)
Works across markets: forex, stocks, commodities, crypto
Does not provide buy/sell signals—interpretation requires practice
Traders must understand supply and demand concepts
Requires reading and studying volume analysis techniques
If you want to deepen your skills, explore educational articles and MT5 tools available at IndicatorForest.com.
The Volume Average Indicator for MT5 significantly enhances traditional volume analysis by combining dynamic color coding with volume-based moving averages. This makes it easier to identify market strength, institutional footprints, and potential reversals. For traders seeking a simple yet powerful tool for volume interpretation, this indicator is an excellent addition to any MT5 trading setup.
Download the Volume Average Indicator for MT5 for free today and upgrade your volume analysis strategy!
Published:
Nov 30, 2025 13:24 PM
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