Tick Volume v Real Volume (SB Forex)

Nowler

Established member
959 76
Hey folks,

I was looking for the volume indicator on my platform but all I see is tick volume...what's the difference?

I spreadbet forex and commodities
 

timsk

Legendary member
7,076 1,866
Hey folks,

I was looking for the volume indicator on my platform but all I see is tick volume...what's the difference?

I spreadbet forex and commodities
Hi Nowler,
Be wary of volume in Forex - it's rather misleading. Actually, some would say that all volume (in any market) is misleading! Check out this fxStreet article: Volume in the Forex markets - useful or not? Additionally, here's a T2W post by Jason Rogers (always a reliable source of information on things like this) regarding volume on MT4 - if that's the platform you're using.
Tim.
 

Nowler

Established member
959 76
Hi Nowler,
Be wary of volume in Forex - it's rather misleading. Actually, some would say that all volume (in any market) is misleading! Check out this fxStreet article: Volume in the Forex markets - useful or not? Additionally, here's a T2W post by Jason Rogers (always a reliable source of information on things like this) regarding volume on MT4 - if that's the platform you're using.
Tim.
I read this earlier today and what an interesting quick read!
This has jolted my perception/understanding of trading quite a lot!

When I got to the 3rd/4th paragraph I was thinking "burn the volume indicators", but as I read on...interesting...

Honestly, I am not 100% sure what way to use this, but even at a quick glance I can use what I just read, to some degree... I'm just not sure how beneficial that will be.

Just my luck, I actually use Oanda! So the examples they used are actually my broker! :clap: You can't get much more relevant than that :)

But what matters most?
Volume based on:

-The number of times a price changes
- The amount of purchases/sells/contracts (please help me with better terminology here)
 

timsk

Legendary member
7,076 1,866
. . .But what matters most?
Volume based on:

-The number of times a price changes
- The amount of purchases/sells/contracts (please help me with better terminology here)
Hi Nowler,
I don't trade Forex and I don't use volume - so take anything I say on the subject with a bucket load of salt! Perhaps someone who does understand and use volume will add a comment.

The number of times that prices change is not the same as volume. Volume records the number of contracts / shares etc. that are traded. But even this definition can vary according to the market traded. For example, the NYSE and Nasdaq measure volume differently. For every buyer, there is a seller: 100 shares bought = 100 shares sold. The NYSE would count this as one trade and as 100 shares of volume. However, the Nasdaq would count each side of the trade and as 200 shares volume.

IMO, the number of times a price changes is unlikely to be of much help to you as price can move up or down just one point but the recorded volume could be in the many thousands. On top of that, there are various ways that volume can be displayed - assuming you're using charts rather than reading a Level 2 screen. Vertical bars beneath price on a time based chart is the most common. But there are others such as: Candle Volume, Equi Volume and Volume by Price. And then there's indicators such as VWAP - very fashionable among equities traders a few years ago.

IMO, volume is something of a minefield and using it to enhance your edge is an advanced technique best left to experienced traders with detailed knowledge and understanding of their market. Clearly, for these traders, volume can be very useful. For traders who are not in this category, volume is more likely to muddy the waters than it is to add clarity. This is especially true for Forex as it's not an exchange based market. Therefore, knowing exactly what Oanda (or whoever) are showing you with regard to volume and making use of it is likely to be very challenging. Having said that, don't let me put you off!
;)
Tim.

PS. I forgot to say that if you want to pursue volume further then the resident forum expert on the topic is dbphoenix. Here's an old thread of his which is more about price than volume - but it'll give you an idea of how he approaches it: Price, (Volume), Support, Resistance, Demand, Supply . . . (Abridged)
 
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Nowler

Established member
959 76
Hi Nowler,
I don't trade Forex and I don't use volume - so take anything I say on the subject with a bucket load of salt! Perhaps someone who does understand and use volume will add a comment.

The number of times that prices change is not the same as volume. Volume records the number of contracts / shares etc. that are traded. But even this definition can vary according to the market traded. For example, the NYSE and Nasdaq measure volume differently. For every buyer, there is a seller: 100 shares bought = 100 shares sold. The NYSE would count this as one trade and as 100 shares of volume. However, the Nasdaq would count each side of the trade and as 200 shares volume.

IMO, the number of times a price changes is unlikely to be of much help to you as price can move up or down just one point but the recorded volume could be in the many thousands. On top of that, there are various ways that volume can be displayed - assuming you're using charts rather than reading a Level 2 screen. Vertical bars beneath price on a time based chart is the most common. But there are others such as: Candle Volume, Equi Volume and Volume by Price. And then there's indicators such as VWAP - very fashionable among equities traders a few years ago.

IMO, volume is something of a minefield and using it to enhance your edge is an advanced technique best left to experienced traders with detailed knowledge and understanding of their market. Clearly, for these traders, volume can be very useful. For traders who are not in this category, volume is more likely to muddy the waters than it is to add clarity. This is especially true for Forex as it's not an exchange based market. Therefore, knowing exactly what Oanda (or whoever) are showing you with regard to volume and making use of it is likely to be very challenging. Having said that, don't let me put you off!
;)
Tim.

PS. I forgot to say that if you want to pursue volume further then the resident forum expert on the topic is dbphoenix. Here's an old thread of his which is more about price than volume - but it'll give you an idea of how he approaches it: Price, (Volume), Support, Resistance, Demand, Supply . . . (Abridged)
Thanks for the help mate.

I will read and see what I come up with.
 

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