Section Two - Hourly charts

In this section we move from the daily timeframe to the hourly timeframe, and all the examples here are taken from the MT4 platform and once again all are for spot forex currency pairs.

The issue when considering volume in this timeframe, is to ensure we are comparing like with like as volume in one session will be very different to volume in another. For example volume in the London and US session will be much deeper than volume in the Far East and Asia session. This is something we have to be aware of as volume traders in this, or indeed any other market where volume will vary accordingly.

When comparing volume here, we can compare on two levels. First with like volume within the session itself, and then with like volume in a previous session. So here we can compare London on the day with London on a previous day, or volume in the US session with volume in a previous US session. Equally, we can compare volume in the Far East and Asia with volume in a session in history.

What we cannot compare is volume in one session with volume in another. The comparison of London volumes with Asia and Far East volumes does not reveal anything in terms of volume price analysis, other than the fact there is a huge variation which we know anyway.

As you will see in these examples I refer to sessions, as session one, session two etc. This simply means the complete session from the London open on one day to the London open on the next. In other words, a complete 24 hour cycle. Each of the charts that follows has five cycles, in other words is over a week of price action, and each session is characterised by the typical rise and fall in volume in the 24 hour period which creates the ‘wave patterns’. To help make this easier, I have labelled each chart with a 1,2,3,4,5 notation to make this clear, and so make identifying the session referenced easier to spot.