Preferences of Forex traders regarding currency pairs are represented as a chart with its y-axis showing the percentage ratio of trades on a given currency instrument to the total number of trades made.
A high ratio of trades on a certain currency pair means increasing appetite for it, greater trading volume and possible abrupt price movements in the nearest time. On the contrary, fewer trades mean a waning interest in the currency pair, smaller trading volume and a rising possibility of a weak sideways movement. In other words, trading volume and volatility are directly proportional to each other. However, under exceptional circumstances, small trading volume may lead to increasing volatility.
The number of trades on various currency pairs is the most accurate gauge for trading volume on Forex.
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