Tape Reading Thoughts

the simplest form of tape reading, as i understand, is looking at the current price and volume. then comparing it with the previous so we can have a rough idea where the market is heading.

can we apply this in FX trading, using the tick volume? using the 4H chart for example. we take the difference of the current and previous candles price and volume.

if the results are both positive we can buy and if both negative we can sell. or this can be refined by waiting for certain "distance" between the current and previous values before entering.

exit strategy can be as follows;
for buy : either or both volume and price difference becomes negative.
for sell : either or both volume and price difference becomes positive.

i only did some visual back testing on this. i have no programming skill to create an indi to accurately get the difference in price and volume. nevertheless i thought this will make a good topic to talk about

Usually Tape Reading is: Times & Sales (cumulative) (against market depth) information.
In forex there is no T&S and market depth can only be used to a certain degree.
(Derivatives (Futures and Options) where T&S + Level II is available for some pairs only represent a portion of the whole FX market.)

I've found that fx volume (tick count) can be used for special algo models.
But reading+monitoring the value of each currency is much more effective to see where the market is heading and to gain "information" about anomalies and hidden inventory.

Nevertheless you can test your idea to see if the method works.