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Trading Volume???

  • #1
  • First Post: Apr 5, 2007 3:21pm Apr 5, 2007 3:21pm
Hey Everyone,

I thought I would throw something out to everybody. One factor that seems to be missing in most Forex analysis is volume (how much money is being traded?). A few brokers such as IBFX on MT4 offer the volume being traded for a currency, but what does it represent and what kind of units is it in. Is it reliable or not?

In the stock market volume is a major issue, so why isn't it a major issue here? Are we all missing something or are the banks just not putting it out there so as to not give up an edge or is it just hard to compile all the numbers because its a worldwide thing?

Also, if you are using volume in your trading analysis, offer up some advice if you like as there seems to be a definite lack of discussion on this factor.

Many thanks for all your words,

GirlFlyer
  • #2
  • Apr 5, 2007 3:52pm Apr 5, 2007 3:52pm
Volume is dodgy in forex because the numbers you get in your platform doesn't represent the global scale of things. It would be almost impossible to do so. I believe the numbers you get is the volume within the brokerage?
  • #3
  • Apr 5, 2007 5:11pm Apr 5, 2007 5:11pm
Quoting ch33z3
Volume is dodgy in forex because the numbers you get in your platform doesn't represent the global scale of things. It would be almost impossible to do so. I believe the numbers you get is the volume within the brokerage?
Exactly. You just can't measure FOREX turnover. It's so big, and so uncontrolled, and lots of seeds build up the whole.
The best you can do is use a Volume indicator from one of the biggest brokers (maybe banks). But I rather close the volume window, it isn't that important in FOREX.
  • #4
  • Apr 5, 2007 5:49pm Apr 5, 2007 5:49pm
you would provide that Volume measure? The exchange, yeah right! Where's the exchange?! I don't see it....do you see it ?
  • #5
  • Apr 5, 2007 8:21pm Apr 5, 2007 8:21pm
you can use indicators that besed on volume.
you can find some of them here
http://ta.mql4.com/indicators/volume...n_distribution

but I am not sure how reliable they are.
  • #6
  • Apr 5, 2007 8:37pm Apr 5, 2007 8:37pm
Volume IS the most important thing in Forex. That's right. The banks control this market. All these mathematical indicators, EW, and so on are just to trick us retail traders. The market is designed for us to lose our money. They don't tell us the truth, because they don't want you to know about it. Think about it, if you were to be on the banks side, and follow everything they do, you would be highly successful. They can trick us, and make the market do whatever they want it to do, but they can't hide everything. They leave hints. This is where VOLUME SPREAD ANALYSIS comes in. The most imprtant kept secret from us retail Forex traders. It interprets volume to understand what the the professionals are doing. THIS IS NOT EASY, and is very difficult. But if you work hard, and constantly learn it, you will master Forex. It will take time though and dedication. You can't give up. Keep trying and trying. I am still a beginner with Volume Spread Analysis. I am just trying to help out and give out to forexfactory because there are alot of people here who helped me. I believe when you give, you will get in return. But trust me, there is NOTHING more important than Volume Spread Analysis in Forex. Not Fibonacci, nothing. Fibonacci, EW,etc can help though in determining market reversals as you will learn with Volume Spread Analysis.Do your research in it, and you will understand. You won't find too much on it though. Tom Williams is the creator and his book will explain everything you need to know. I am not promoting anything, so I will leave it to this. If you have any questions, I am more than happy to answer. Remember,I am just trying to contribute, not disagree with anyone.
  • #7
  • Apr 5, 2007 8:45pm Apr 5, 2007 8:45pm
Not too long ago, I was also just trading on Fibonacci, Elliott Waves, Indicators, etc only. Until I found out about Volume Spread Analysis recently. It will definetly change how you trade as a Forex trader. Hopefully we will be able to start a thread on this, so we all can learn and get better, and soon we will be able to predict reversals on currencies alot more accurately. This market is nothing but supply and demand. That's it.
  • #8
  • Apr 5, 2007 9:09pm Apr 5, 2007 9:09pm
Well, it's not really volume, but the COT reports can give some insight as to where the trend is going for various currencies. In this chart,

http://www.freecotcharts.com/charts/DX.htm

the green represents large, non-commercial traders, and as the site says, their positions pretty much reflect prive movement. The chart is the number of contracts long minus short. So a large positive green line means many people are long, and a turndown can be expected as they sell off, and vice versa. Not really volume, but very helpful.
  • #9
  • Apr 5, 2007 9:57pm Apr 5, 2007 9:57pm
Quoting JoshDance
Well, it's not really volume,...So a large positive green line means many people are long, and a turndown can be expected as they sell off, and vice versa. Not really volume, but very helpful.
Well, as DS intimated {I think. I actually don't wish to put words in his mouth.}

I would expect a Long Term review of this situation to reveal numerous Green slightly < Red and then a collapse of the Green to a Fog on the Floor attitude.
  • #10
  • Apr 5, 2007 11:29pm Apr 5, 2007 11:29pm
Quoting JoshDance
Well, it's not really volume, but the COT reports can give some insight as to where the trend is going for various currencies. In this chart,

http://www.freecotcharts.com/charts/DX.htm

the green represents large, non-commercial traders, and as the site says, their positions pretty much reflect prive movement. The chart is the number of contracts long minus short. So a large positive green line means many people are long, and a turndown can be expected as they sell off, and vice versa. Not really volume, but very helpful.

Hmmm, so why are all the commerical traders showing up negative for the Euro...? meaning short? right?... How do we evaluate the differences between commercial, large, and small retail.
  • #11
  • Apr 6, 2007 10:14am Apr 6, 2007 10:14am
Quoting JoshDance
...So a large positive green line means many people are long, and a turndown can be expected as they sell off, and vice versa. Not really volume, but very helpful.
Hmm. I edited the chart to add a White "Zero" line. Hopefully this will help you understand it a little more.

What i didn't do is reverse the colours of the Comms & Large but I bet if I had, you wouldn't have noticed.

Commercials are offset by Large because they are the guys Actually Trading Physicals. Commercials Buy 20,000 From Large .
ie
Comms Long 20,000. Large Short 20,000

btw. Somewhere in that Red Line {if you can see it under the White} are all of us tellin those other guys what they 'Should be doin'
Attached Image
  • #12
  • Apr 6, 2007 10:56am Apr 6, 2007 10:56am
i also check sometimes COT charts to see big turnover points. If everybody is long, then who is left for short? here is the link for more indexes
http://www.freecotcharts.com/charts.htm
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #13
  • Apr 7, 2007 10:50am Apr 7, 2007 10:50am
Quoting Bemac
Hmm. I edited the chart to add a White "Zero" line. Hopefully this will help you understand it a little more.

What i didn't do is reverse the colours of the Comms & Large but I bet if I had, you wouldn't have noticed.

Commercials are offset by Large because they are the guys Actually Trading Physicals. Commercials Buy 20,000 From Large .
ie
Comms Long 20,000. Large Short 20,000

btw. Somewhere in that Red Line {if you can see it under the White} are all of us tellin those other guys what they 'Should be doin'
Interesting. But either way, the Large line reflects the dollar index pretty well eh? So I could be pretty certain that the dollar is ready for an upturn, and it might be a good idea, for the long term, to go long on the dollar... right?
  • #14
  • Apr 7, 2007 10:52am Apr 7, 2007 10:52am
Quoting semar
i also check sometimes COT charts to see big turnover points. If everybody is long, then who is left for short? here is the link for more indexes
http://www.freecotcharts.com/charts.htm
Well, from what bemac said, if commercials are long, then everybody else is short, and vice versa. This is why the two lines reflect each other almost perfectly. That's what I got from his post anyway.
  • #15
  • Apr 7, 2007 11:26am Apr 7, 2007 11:26am
Quoting JoshDance
Well, from what bemac said, if commercials are long, then everybody else is short, and vice versa. This is why the two lines reflect each other almost perfectly. That's what I got from his post anyway.
I just gave an e.g.
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #16
  • Last Post: Apr 7, 2007 1:45pm Apr 7, 2007 1:45pm
Quoting yungdannyboy
Not too long ago, I was also just trading on Fibonacci, Elliott Waves, Indicators, etc only. Until I found out about Volume Spread Analysis recently. It will definetly change how you trade as a Forex trader. Hopefully we will be able to start a thread on this, so we all can learn and get better, and soon we will be able to predict reversals on currencies alot more accurately. This market is nothing but supply and demand. That's it.
relax..., i agree with the spread, and the volume, i check it especiall if i am scalping or with high margin,...it shows something but not all....u can not predict few moves ahead , too offen they mislead you,....but the volume at futures do influence the forex market...
its just money
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