Market depth aka Level II | Forex Factory

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Market depth aka Level II

  • #1
  • First Post: Aug 26, 2009 4:12am Aug 26, 2009 4:12am
I've just opened an active trader practice account on FXCM to try incorporate market depth info into my 1m scalping. Do you think this Level II stuff, they provide, is reliable ? Anyone has any experience trading with market depth info?
  • #2
  • Aug 26, 2009 4:36am Aug 26, 2009 4:36am
Quoting T.E.Lawrence
I've just opened an active trader practice account on FXCM to try incorporate market depth info into my 1m scalping. Do you think this Level II stuff, they provide, is reliable ? Anyone has any experience trading with market depth info?
Im not sure on FXCM feed, what they shows on lvl II, but eSignal for charting with FX and market depth is a nice tools.. anyway there are lot's of literature for Nadaq lvl2 trading..
btw.. im not using lvl 2.. I know also threre is a BG broker "deltastock" offfering a level II trading too..

cheers!
  • #3
  • Aug 26, 2009 4:56am Aug 26, 2009 4:56am
As you for sure know, FX is traded OTC. (liquidity is split between many different venues and price engines)

Further, any ESP (executable streaming prices) are of indicative nature only. It means absolutely nothing if someone joins the bid or offer with any amount; at any given time this can be retracted. The only time it can't is (obviously), if someone hits the bid or lifts the offer, in which case the next best indicative bid and offer are made available at the same or lower/higher price level.

However, there are Institutions using order flow for trading, latency arbitrage, high frequency trading etc.etc. in my opinion, retail traders should stick to what they know best, and that is not trying to make head and tale out of a manipulated ' level II ' FX data feed. (as they say; just my 2 cents).
  • #4
  • Aug 26, 2009 5:05am Aug 26, 2009 5:05am
Do you think fx volumes are more reliable than market depth info? Many traders use volumes in forex trading, though this is also controversial subject.
  • #5
  • Aug 27, 2009 12:14am Aug 27, 2009 12:14am
Unless you're trading currency futures and looking at IMM positioning, there is no *reliable* FX Volume data. As one of the previous posters mentioned, FX is OTC (decentralized) so you're not going to get all encompassing volume data, especially on the shorter time frames. Hope this helps and good luck in developing your edge.

Kris Matthews
  • #6
  • Aug 27, 2009 12:40am Aug 27, 2009 12:40am
Quoting kristdm
Unless you're trading currency futures and looking at IMM positioning, there is no *reliable* FX Volume data. As one of the previous posters mentioned, FX is OTC (decentralized) so you're not going to get all encompassing volume data, especially on the shorter time frames. Hope this helps and good luck in developing your edge.

Kris Matthews
I have to disagree here.

Volume is a measure of activity and as such tic volume works as a good substitute to actual volume.

Esignal offers tic volume which is aggregated over many different sources.
Many brokers offer tic volume as well. Whist some are better than others, the overall reliability of said volume as a gauge of activity is certain to many.

I do not like Trade Guider and would never indorse it, but if you want to see live fx charts with volume and signals being taken based on that you should check them out. There is also a VSA thread on this forum with many charts and examples of analysis being done using volume.

Many exchanges do not release volume information until the next day. There is a reason: if a trader can read volume correctly, he/she can track the Smart Money. Forex is no different. The fact that there is no central exchange only helps to perpetuate the idea that volume is not available and useless. The big boys would rather you spend time trying to figure out how to trade using stochastics than learn how to analyze volume. Tic or other wise.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #7
  • Aug 27, 2009 3:22am Aug 27, 2009 3:22am
Ok, so in your opinion trading with market depth info is useless, right? Anyway I'm gona test it with 1m scalping.
  • #8
  • Last Post: Jun 7, 2012 3:55pm Jun 7, 2012 3:55pm
Quoting HiddenGap
I have to disagree here.

Volume is a measure of activity and as such tic volume works as a good substitute to actual volume.

Esignal offers tic volume which is aggregated over many different sources.
Many brokers offer tic volume as well. Whist some are better than others, the overall reliability of said volume as a gauge of activity is certain to many.

I do not like Trade Guider and would never indorse it, but if you want to see live fx charts with volume and signals being taken based on that you should check them out. There is also a VSA...
I know old thread sorry but wanted to ask if you were to trade a financial instrument based on offical volume figures released for that day is that possible with any market outwith fx?
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