When the market is in a sideways trend, many indicators can throw you off course with false signals. However, there's a straightforward method to help filter out a good chunk of those misleading indicators. As you may know, strong trend movements typically come hand-in-hand with increased trading volume. By incorporating the right indicator, you can pinpoint optimal market entry points more effectively.
Enter the normalized volume indicator. This tool charts tick volume values against the average for a specified period. By normalizing the current volume, it allows you to establish clear and accurate criteria for entering the market. So, if you see the chart line sitting above the 1.0 mark, it indicates that the current volume is higher than the average for that period. This means the signals you're getting from the indicator are likely to be more reliable.
We suggest using an 8-period average for the best results.
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