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Application of Volume in Forex

  • #21
  • Sep 15, 2008 8:42am Sep 15, 2008 8:42am
How do you want to analyse Volume if there is not any Volume in the FX Market? You could aswell just put some random numbers in your analysis.
Or are you reffering to Currency Futures trading?

Your nickname sounds familiar to me. Did you ever visit a site called FXNationLive?
  • #22
  • Sep 15, 2008 7:41pm Sep 15, 2008 7:41pm
Quoting Islander
Hi Denbur - thanks for starting an interesting thread.

Your phraseology reminds me of the work done some years ago by the experienced English trader Tom Williams, who traded for many years on Wall Street - I met him several times.

I look forward to working through you charts etc

Regards

Islander

I never met Tom in person but follow his work work closely.
I first read his book many years ago. I believed what he wrote but could not apply that.

Later I understood that for some people it is easier to obtain information from reading, for some from hearing or watching live examples.

The trader that taught me in real life is Jason Alan Jankovsky. He is a professional trader from Chicago.

He opened my eyes to what is going on, showed me how crowd is led to loose money consistently and how big houses profit from it.

Later I picked up Tom Williams' work and researches from traders like Whyckoff, Livermore and others.

but only from live examples I was able to use everything what Tom and others wrote and i think this depends on how my brain process information. I needed live examples, lots of them, and this thread is about providing such examples.
  • #23
  • Sep 15, 2008 7:58pm Sep 15, 2008 7:58pm
Quoting Tjpld
How do you want to analyse Volume if there is not any Volume in the FX Market? You could aswell just put some random numbers in your analysis.
Or are you reffering to Currency Futures trading?

Your nickname sounds familiar to me. Did you ever visit a site called FXNationLive?

there is tick volume in Forex market. eSignal has data feed that combines volume from about 200 major bank around the globe.

No never appeared on FXNationLive.
  • #24
  • Sep 16, 2008 12:30am Sep 16, 2008 12:30am
EUR/USD 2008-09-16

I saved news to show how tips from big news company are “working”. This news media is used by major broker houses, like Saxo Bank, FXsolution and others.
This news came out went EUR/USD pair was around 1.4250-1.4230 suggesting buying this pair. I marked on the chart what effect that news created and if there was a reason to buy.

I also want to talk about trends and why they exist. I know there is a misconception about why trend exists. I found only 2-3 books that describe that effect or you have to be in a broker house to observe that. This principle works fine in Forex and futures, but in stocks it is altered.
In short, when market stops that means some group is initiating and when market moves somebody is under liquidation.
The thing is that public sometimes stops buying tops and selling bottoms as a group and switches to picking tops and bottoms. Often news and recommendations form “official” source helps in this process. Public liquidation drives the market further.
When the trend is up there is more people who thinks that market went too far and they start selling short to pick a top, more and more people who missed the trend or took profits too early start selling to pick a top. Their liquidation will drive the market higher until they stop picking a top or finally convinced that they are wrong and buy at the top.
In summary: Trend ends when public starts participating on the same side of a trend all together and it continues while public tries to find a turning point.
Attached File(s)
File Type: doc Euro_2008-09-16.doc   72 KB | 878 downloads
  • #25
  • Sep 16, 2008 2:45am Sep 16, 2008 2:45am
Quoting denbur
EUR/USD 2008-09-16

I saved news to show how tips from big news company are “working”. This news media is used by major broker houses, like Saxo Bank, FXsolution and others.
This news came out went EUR/USD pair was around 1.4250-1.4230 suggesting buying this pair. I marked on the chart what effect that news created and if there was a reason to buy.

I also want to talk about trends and why they exist. I know there is a misconception about why trend exists. I found only 2-3 books that describe that effect or you have to be in a broker house to observe that. This principle works fine in Forex and futures, but in stocks it is altered.
In short, when market stops that means some group is initiating and when market moves somebody is under liquidation.
The thing is that public sometimes stops buying tops and selling bottoms as a group and switches to picking tops and bottoms. Often news and recommendations form “official” source helps in this process. Public liquidation drives the market further.
When the trend is up there is more people who thinks that market went too far and they start selling short to pick a top, more and more people who missed the trend or took profits too early start selling to pick a top. Their liquidation will drive the market higher until they stop picking a top or finally convinced that they are wrong and buy at the top.
In summary: Trend ends when public starts participating on the same side of a trend all together and it continues while public tries to find a turning point.
THis is a very interesting concept and one that I've never heard of before, so I need to get my head round it and see if I can utilise it in trading.

I'm waiting for the current hourly bar to close before posting my hourly eurusd chart to compare with yours....
Trading Levels with WRBs
  • #26
  • Sep 16, 2008 3:13am Sep 16, 2008 3:13am
Quoting Islander
THis is a very interesting concept and one that I've never heard of before, so I need to get my head round it and see if I can utilise it in trading.

I'm waiting for the current hourly bar to close before posting my hourly eurusd chart to compare with yours....
What i found works for me is a way to measure public consensus. I am reading several newsletters produced by market "guru" and i friends from investment houses are sending me copies of their newsletters that they produce for their customers.

lets take oil as an example. when the oil broke 100-110 level most of the "guru" and investment houses were writing any reason on Earth why it cant go higher. two popular opinions were: demand is not there and this is another bubble that must burst in a day or two.

by the time oil got to 140 level consensus changed from bearish to bullish and I got prediction of oil hitting 200 level

On the way down, those who gave me their word that oil must hit 200 were sending me news and articles from other "gurus" about why oil must rebound. later they were sending me weather forecasts and that big part of US goes under water. Then couple of guys I know were jumping when a military conflict in Russia hit the news. They were made up their brains that oil must go up and they saw only "facts" that could support their opinion.


I use TV news, "guru" and investment recommendations, friends, to create a market sentiment. Do you want fun? go to a local group of investors or those who get together to discuss markets. sit there and listen


Today I got a dozen of articles from friends about how bad banking in US. Well it was bad 6 months ago. The news are horrible all over the TV channels. Bad news are usually at the bottom and good news are always at the top.

I am wondering if anyone today took a look at banking index and bank ETFs. they are acting stronger then the index and refusing to make new lows.
  • #27
  • Sep 16, 2008 3:19am Sep 16, 2008 3:19am
Here's my hourly chart from my MT4 broker, with your annotations.

Again today at the Frankfurt Open volume has doubled and increased even further in the hour after the LO.....and yet both bars were narrow range ones with closes within 20 pips of each other....# 11 is a doji.

So there's been a big jump in activity with so far no result.

My simplistic view is that there is accumulation taking place and that price will soon breakout of its current European Session range of 65 pips.

I am biased towards an upside breakout based on the higher low in the Asian / Antipodian! Session - this low was at a 61.8% fibo retracement...
Attached Image (click to enlarge)
Click to Enlarge Name: sep 16 eur 60m 0800.gif Size: 12 KB
Trading Levels with WRBs
  • #28
  • Sep 16, 2008 3:34am Sep 16, 2008 3:34am
Quoting Islander
Here's my hourly chart from my MT4 broker, with your annotations.

Again today at the Frankfurt Open volume has doubled and increased even further in the hour after the LO.....and yet both bars were narrow range ones with closes within 20 pips of each other....# 11 is a doji.

So there's been a big jump in activity with so far no result.

My simplistic view is that there is accumulation taking place and that price will soon breakout of its current European Session range of 65 pips.

I am biased towards an upside breakout based on the higher low in the Asian / Antipodian! Session - this low was at a 61.8% fibo retracement...
I avoid giving projections as much as I can. projections make me biased and i become part of a herd. the picture can change any hour. I made about 50 pips since i posted my newsletter and out of the market as it looks like being supported before the news. There is no continuation after each sign of strength and that gives me warning
  • #29
  • Sep 16, 2008 3:46am Sep 16, 2008 3:46am
Quoting denbur
I avoid giving projections as much as I can. projections make me biased and i become part of a herd. the picture can change any hour. I made about 50 pips since i posted my newsletter and out of the market as it looks like being supported before the news. There is no continuation after each sign of strength and that gives me warning
At the time that I started my post I was biased as I was long the Euro and the Dax and short the Swissy - all since closed - and I agree that the only time a trader is NOT biased is when he's out of the market....http://forexfactory.com/images/icons/icon7.gif
Trading Levels with WRBs
  • #30
  • Sep 16, 2008 4:18am Sep 16, 2008 4:18am
Thanks for the interesting thread. I think understanding volume in relation to the price bars is vital to successfull trading
Boxing clever since 76.
  • #31
  • Sep 16, 2008 4:50am Sep 16, 2008 4:50am
Quoting Islander
At the time that I started my post I was biased as I was long the Euro and the Dax and short the Swissy - all since closed - and I agree that the only time a trader is NOT biased is when he's out of the market....http://forexfactory.com/images/icons/icon7.gif
as I thought market was supported and marked up before the news. on the news market when up through resistance on very low volume this was and excellent place to sell it, about 90 pips in profit. I also got recommendation about better than expected news which must be positive for euro. this recommendation came from the same source that recommended to buy EUR/USD yesterday at 1.4230 level. I think the guy just made his mind about high Euro and finds any reason to buy. I will add that to my next newsletter.

market often marked up before the news to help to distribute on the news.
  • #32
  • Sep 16, 2008 5:59am Sep 16, 2008 5:59am
[quote=denbur;2221766]as I thought market was supported and marked up before the news. on the news market when up through resistance on very low volume this was and excellent place to sell it, about 90 pips in profit. I also got recommendation about better than expected news which must be positive for euro. this recommendation came from the same source that recommended to buy EUR/USD yesterday at 1.4230 level. I think the guy just made his mind about high Euro and finds any reason to buy. I will add that to my next newsletter.

market often marked up before the news to help to distribute on the news.[/quote]

I used to trade the actual news announcements with several very experienced traders who always said that the Euro data was already leaked to the banks - this would tend to be confirmed what happened - a nice little spike up to just above todays pivot to trigger some buy stops and then take it down 100 pips to allow the accumulated shorts to take a nice profit.
Trading Levels with WRBs
  • #33
  • Sep 16, 2008 5:40pm Sep 16, 2008 5:40pm
today i was asked what i think about math formulas and why so many people can't get success with using them.

and another question was:
"I do not think it is hard for big players to forge different buy/sell/continuation signals on popular technical indicators, how can we not get cheated or trapped?"

I will give my opinion based on what i saw happening.

I know as fact that big players are facilitating technical indicators. there are books on technical analysis that were "sponsored" by big companies. one example is FXCM, their Kathy Lien wrote a book on technical analysis and super secret system that she used and became very successful. i saw her speaking on public forums and she is selling her book on Amazon.

Why a person who can see orders in Forex market is writing a book on how to use math formulas?

Lats year I spoke with FXCM London office manager and he was advertising FXCM fund based on tracking orders from public and going against it. their idea is that public is 90% wrong. their fund out performed most popular funds and is among top 3 I think


FXCM even has an indicator, they had a forum where they published it several times a week and were showing what public was doing and how to trade against it.

so, as soon as i saw the book i knew it is not for real. they just feed public with such "cool" ideas.

funny things that i don't think they are wrong. i think public deserves it.

public worships math formulas and fancy systems so they give them.
Like public was asking for free bread and fight in ancient Rome. Public did not change since ancient Rome, it just asking for other things, but old principle is still working.


my advice to the guy was "wake up Neo"
  • #34
  • Sep 16, 2008 10:06pm Sep 16, 2008 10:06pm
Euro 2008-09-17

i put an example how reported stops were triggered. market was going the way the stops were reported whole down move was on stops liquidation.
Attached File(s)
File Type: doc Euro_2008-09-17.doc   188 KB | 724 downloads
  • #35
  • Edited Sep 17, 2008 12:36am Sep 16, 2008 10:45pm | Edited Sep 17, 2008 12:36am
we have seen extreme panic in share markets for the last two days. I want to cite what I find very interesting:

"Extremes almost always mean that investors aren’t thinking clearly. Extremes mean emotions are in control and logic has gone out the window. When emotions are running a muck in the market there are opportunities to be had. If you can stay calm and think logically you can profit from the herd of investors who are blindly selling when they should be calmly buying.

Panic reading was five standard deviations from normal. That kind of reading has only been seen 6 times since 1950. Every single occasion yielded a positive return averaging 5.5% over the following two days.

At the times when the S&P lost 3% and then gaped down 1.5% or more the next day, like it did today. There have been four such occurrencessince index futures started trading. All of them led to short term volatility and all of them led to major intermediate to long term gains. "




So, are we told the truth, because there no newspaper, no TV channel that can't stop reminding us for the last two days how bad things are. Or the public, again, sold at the bottom with the help of newspapers and talking heads on TV?
  • #36
  • Sep 16, 2008 11:12pm Sep 16, 2008 11:12pm
I posted a few threads in my day on forexfactory.
http://www.forexfactory.com/showthread.php?t=37926
This is the only one I can seem to find.

The tick volume on MT4 charts is a % of the real tick volume coming through the broker's portal. Their portal probably sees 80% of the ticks in the spot market. Take it for what it's worth. The real volume isn't going to show you much more. I've used eSignal (horrible software) for spot FX and I've used Investor R/T (awesome guys and great software and cheaper than eSignal) for FX futures. Currently I analyze candles in a totally proprietary fashion and I'm having much better success than anything else.

I commend your efforts. Stick to it and you'll surely outlast 95% of the members here.
It really is that easy.
  • #37
  • Sep 17, 2008 12:35am Sep 17, 2008 12:35am
Euro 2008-09-17: daily charts + 60min update
Attached File(s)
File Type: doc Euro_2008-09-17_update.doc   71 KB | 596 downloads
  • #38
  • Edited 2:13am Sep 17, 2008 2:02am | Edited 2:13am
Quoting denbur
Euro 2008-09-17

i put an example how reported stops were triggered. market was going the way the stops were reported whole down move was on stops liquidation.

Thanks - I think that you have now dropped down to a 10 min chart - it would be helpful if we could see the actual time frame on each chart....

Edit; Sorry, I forgot to ask you what is the lowest TF that you use with volume? - too busy trading!
Trading Levels with WRBs
  • #39
  • Sep 17, 2008 2:20am Sep 17, 2008 2:20am
Is this right, or am I not looking at it right? This is a daily.
Just trying to get a handle on it. BTW I have compared MT4s volume and it is not even close to being correct. Probably, because it is only from them or is a percent of what their feed passes to them.
Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_074.gif Size: 27 KB
  • #40
  • Sep 17, 2008 2:54am Sep 17, 2008 2:54am
Quoting Islander
Thanks - I think that you have now dropped down to a 10 min chart - it would be helpful if we could see the actual time frame on each chart....

Edit; Sorry, I forgot to ask you what is the lowest TF that you use with volume? - too busy trading!
i use 10 min for entries only. sometimes for exits. but I don't trade based only on 10 min. i use Daily, 240,180,120,90,60 min charts so I can see a big picture.
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