I been at the forex for a while although in the last 2 months didn’t traded because of my last year study and exams .
But it gave me time to analyze and read and talk with other smart people from stock world (they hate the forex ).
The candlesticks are great at the stock markets , it was invented by japanese trader who was trading goods on the markets. also there a re tons of books that also use the candles but the majority of this was written to the stock world in different conditions and different rules .
So what it really give us without volume information . we see a big move or some pattern , but we don’t really know why it there it can be because huge amount of traders , or just one one big speculative . it can be because there only buyers and no sellers but it can be millions of buyers but 1 big seller that oversold them all and they lost their money but we don’t know this !!! We don’t see the reason for the move so why we do trust them ? how we really can rely on those patterns ?
more then this , i used the free time to learn how to right build support and resistant lines . it looks great with the candlestick , but it looks much better and much easier with the line graph , just pure price move without the speculations and without the crowd moves . maybe i wrong and people will fix me .
I learning the price action slowly but for now i more going towards the s/r moves with some combination of oscillator . and less to the candle pattern which is popular though . i hope can post some results in couple of months .
Candlestick price patterns usually incorporate volume information, as it shows whether buyers or sellers are pushing price strongly in a particular direction or hesitating. With majority of traders watching candlestick patterns, these tend to be self-fulfilling trade signals so they can be effective ways of predicting price action.
thats my dilemma , om one side candles do tell us the situation on the market , on the other they can mislead us as we don’t know who behind the moves , if prise moves up by 30 pips , was it because a bank bought 10M because the crowd selling 5M or because bank buy 5 M but no one sell it . As i start realize the volume info is very critical in this kind of trade .
is there a way to calculate it lets say if we know how much it moved is there a way to know how much money was at the markets at particular day ?
Forex is decentralized, there is no way to calculate the true volume for any day.
I originally did this with Heiken Ashi candles, Support, Resistance Line and simple volume indicator. I don’t think it makes much difference, candles, bars, or line. You would probably find it’s more on trader preference if you gave them truth serum I road this up and down for most of London, NY overlap not based on some candle pattern which everybody has a different take on what makes up a particular pattern. just Support, Resistance and volume. Even caught the short break out down and up
Do some reading regarding volume spread analysis, supply and demand and volume price analysis. There some excellent video’s on all of them, so you can see how it’s done
As miliardo mentioned, the decentralized nature of forex makes it difficult to gauge the exact trading volumes for the day, although you might want to look into order flow or Level II quotes.