Best Volume Indicators for NinjaTrader

If you want to become better at trading using NinjaTrader, one of the most important things to understand is volume. Volume tells you how many people are buying or selling a stock or asset during a certain time. It's like seeing how busy a market is. The more people trading, the higher the volume.

Now, how do you see volume clearly on NinjaTrader? That’s where volume indicators come in. These tools help traders understand what’s really happening behind the scenes. In this blog, we’ll explain the best volume indicators for NinjaTrader, how they work, and how they can help you trade smarter.

What Are Volume Indicators?

Before starting, let’s know about the Volume Indicator. This Indicator basically helps you to measure shares, contracts, or units traded over a specific time. You will see here 2 types of volume, high volume and low volume. If you see high volume, which means a lot of interest in a stock or asset, it can signal strong price movements. Whereas low volume might mean the market is quiet, and big moves could be less likely.

Why Use Volume Indicators on NinjaTrader?

Volume indicators are very useful because they help you spot trends. This means you can see if the price is really going up or down, or if the move is weak. When more people are buying or selling, it shows a stronger trend.

They also help you find support and resistance. These are price levels where the market often stops or changes direction. Volume helps you see if the price might bounce or break through those levels.

Volume indicators are good for confirming trades, too. If the price breaks out or turns around, you can check the volume to see if many people are trading. If the volume is high, the move is more likely to be real.

They also help you manage risk. In low-volume areas, price can move in strange ways. Volume indicators warn you to be careful, so you don’t take risky trades.

Best Volume Indicators

Here are some best volume Indicators to make your trade easy and hassle-free.

1. Volume Profile Indicator

The Volume Profile indicator will show you how much trading happened at different prices during a specific time. You will see that it creates a bar chart on the side of your main chart. There you will see longer bars, which means more people bought or sold at that price. The price level with the highest volume is called the Point of Control (POC). This price often pulls the market.

In the Volume Profile, you will also see the highlights of other important price levels. You will see, the Value Area High (VAH) is the top of the range where 70% of trading happens. And the Value Area Low (VAL) is the bottom of that range. And, the High-Volume Nodes (HVNs) are price levels with lots of trading. These often act as support or resistance. Plus, low Volume Nodes (LVNs) are prices where you will see that not much trading happens, and the price may move quickly through them.

NinjaTrader makes using the Volume Profile easy and flexible. You can use it for a single day, a whole week, or even for custom time ranges. This helps both short-term and long-term traders. For example, if you’re trading S&P 500 futures and see high volume at 4,500, you might expect the price to slow down or reverse there.

2. Volume Up/Down Indicator

In the Volume Up/Down indicator, you will see how many trades happened when prices were going up (buys) and when prices were going down (sells). There are two bars, Green and Red. In the green bars, you will see buying volume, and the red bars show selling volume. The difference between the two is called Delta, shown as a small mark in the stronger colour. So, if you want to know if buyers or sellers are in control or not, this makes it easy for you.

• Green bars (Up Volume) go above zero when the price moves up.
• Red bars (Down Volume) go below zero when the price moves down.

Want to know the total trading volume? Well, each bar on the chart will show you total trading volume, which you can split into buy trades (at the ask price) and sell trades (at the bid price). For example, if a bar has 2,000 trades, it may show 1,200 buys and 800 sells. So, this will help you understand who’s more active, buyers or sellers.

To see the price changes closely, the tool chooses a smaller timeframe. For example:

• If your chart is in minutes or hours, it uses 1 minute of data.
• For daily charts, it uses 5-minute data.
• You can also set your own timeframe if you want more control.

You can use it:

• Spot momentum: If you see many green bars while the price is going up, it means the trend is strong and buyers are active.
• Watch for reversals: If you see a red bar suddenly appear while the price is going up, then you have to understand that the trend might change soon.
• Confirm breakouts: If the price moves above a key level with strong green bars, it means the breakout is more likely to keep going.

As this indicator is already built into NinjaTrader, you don’t need to download it. It works in real time, and if you turn on Tick Replay, you can see past data correctly. Sometimes, you might see all volume as buy in this NinjaTrader indicator. This can be confusing for you. To fix that, you can just subtract the sell volume from the total, and you will get the real buying volume.

3. Volume Weighted Average Price (VWAP)

The Volume Weighted Average Price, or VWAP, can be very useful for you to trade because it will help you to understand the average price of a stock during the day, based on how much was bought or sold. You will see a line on the chart that you can use as a guide. In this line, you will see if the current price is higher or lower than the average price. If you see the price is above the VWAP line, it means buyers are stronger (a bullish sign). But if the price is below the line, then you will have to understand that sellers may be in control (a bearish sign). So, this is how it will make it easier to decide when to buy or sell.

You can calculate VWAP; you have to find the Typical Price first using this formula:

Typical Price = (High + Low + Close) / 3Example: If High = 30, Low = 24, Close = 27= (30 + 24 + 27) / 3 = 27.0

Next, multiply the Typical Price by the Volume:Example: 27.0 × 50 = 1,350

Now, you have to calculate VWAP using this formula:VWAP = Total (Typical Price × Volume) / Total VolumeExample: If the total volume so far is 150 → VWAP = 1,350 / 150 = 9.0

If you find the calculation a little difficult, don’t worry. because most platforms like NinjaTrader will calculate VWAP for you. So, you just need to choose the number of periods or time frames you want VWAP to cover.

One more thing is that you can also use VWAP to set stop-loss and take-profit levels. It can act like support or resistance. For example, if you see the price keeps bouncing up from the lower VWAP band with high volume, it might signal a good time for you to buy. Overall, you can think VWAP will help you make better choices during the trading day, as it’s a smart and simple tool.

4. Volume Behaviour Indicator

In this indicator, you can see if there is strong buying or selling in the market. It changes the colour of the price bars to make things understandable to you. With the green, grey, red and cyan bars, you can see the volume. A green bar means the price is going up with strong volume, so this is a sign of buying. A grey bar also referred to the price going up, but with less volume, so the buying may be slowing down. While a red bar indicates the price is going down with strong volume, this shows selling. A cyan bar means the price is going down, but the volume is lower, so the selling may be slowing.

This tool is great for NinjaTrader because it will give you a clear view of market strength. It’s like a traffic light: green means strong, grey and cyan mean slow down, and red means warning.

You can use it:

• Confirm trades: If you see the market is going up and you see a green bar, it usually means it’s okay to buy or keep holding.
• Tighten stops: If you’re already in a trade and the green bars turn grey, the uptrend may be getting weak. So, it’s a good idea to move your stop-loss closer.
• Spot reversals: If you see a red bar after a few grey bars, it could mean the market is about to go down.

For example, if you’re trading a stock like Apple and see a series of green bars followed by a grey bar near a resistance level, it might be time to take profits or tighten your stop.

5. On Balance Volume (OBV)

OBV is a tool that helps you see if more people are buying or selling. When you see the price of something going up, and a lot of people are buying, OBV will add the volume. And, OBV takes the volume away when the price goes down. However, if you see the price stay the same, OBV won’t change. You can use OBV in many ways:

• Confirm trends: If price and OBV both rise, it’s a strong trend.
• Spot divergences: If price goes up but OBV goes down, it might signal a reversal.
• Check breakouts: If price breaks a level and OBV rises, the move is likely real.
• Watch volume surges: A sudden OBV jump near a key level can signal a strong move.

Setting Up OBV in NinjaTraderOBV is built into NinjaTrader. To add it to your chart, you have to:

• Open a chart.
• Right-click and go to Indicators.
• Select On Balance Volume.
• Click OK to add it.

You can change the colour or style of the line and show it in a separate panel under your chart.

Frequently Asked Questions (FAQ)

Here are some frequently asked questions:

Can I use volume indicators for free on NinjaTrader?Yes, you can, as NinjaTrader offers many free built-in volume indicators. You can also add custom ones from the NinjaTrader marketplace.

Are volume indicators good for beginners?Yes, they are simple and very helpful. They will give you extra clues about the market.

Which volume indicator is best for day trading?VWAP and Volume Profile are very popular with day traders.

What does low volume mean?It means fewer people are trading. But you have to be careful, prices can move quickly with low volume.

Final Thoughts

Volume indicators are like a secret tool for traders. They help you see what’s really going on in the market. You can tell if buyers or sellers are in control and how strong their moves are.

Some of the best volume tools for NinjaTrader are Volume Profile, Volume Up/Downand Volume Behaviour. These tools are easy to use, and you can change the settings to fit your trading style. They work well whether you like fast trades (scalping) or slower ones (swing trading).

You can try these indicators for free or use the ones already built into NinjaTrader. It’s smart to use them with price action and other indicators to get better results.

Remember, trading is risky. Always practice first with a demo account. Only trade with money you can afford to lose. With these volume indicators, you can trade with more confidence and make better decisions.