Volume in the forex market

Haank you may find it interesting to check out Oanda’s Open Position Charts and histories. Nothing to do with volume but I think it’s a great indictor of how the retail market is positioned in general, think I read Oanda holds about 200m$ in reatailers funds.

The fact is the retailer seems to be on the wrong side of the market frequently but unfortunately not to the degree where we can look at what there doing and do the opposite and count the pips:)

Tick volume with my rather small broker correlates nicely with the larger brokers but again this is only retail and as you stated not true volume.

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No. It’s not like insider trading or anything. Which isn’t to say what goes around the inter-bank dealing desks is always quality info, mind you.

Are the CME currency futures the most liquid currency futures available?

For US timeframe traders certainly.

Careful with that assumption. I saw a study not too long ago (it was not made public, so I cannot provide specifics) that indicated 60% of trades done by a large group of retail traders were winners. That would not tend to support the “retail is wrong” argument, but it definitely supports the “retail has poor risk management” one since the group collectively lost money.

Please give me one reason not to do so then.

http://forums.babypips.com/free-forex-trading-systems/21453-1-500-pips-per-month-method-vsa-sr-fibb-etc.html

What means retail traders? I have to ask since I’m not able to find a likely translation into swedish.

Basically home traders that trade over the internet, as opposed to merchant trading.

Traders who trade for their personal account(s).

It is a reason - just have a look at this particular post, and just so I’m not accused of cherry picking it’s the very last one - http://forums.babypips.com/free-forex-trading-systems/21453-1-500-pips-per-month-method-vsa-sr-fibb-etc.html#post246106

Now you can’t tell me that entry was not after an upthrust? We’ve had the discussion about true volumes and broker volumes and all that, to be honest I’m not exactly sure what the Volume Indicator in MT4 actually shows from broker to broker, but what I do know is that these setups appear time and time again and behave very much in the same way that you expect volumes in any market to.

This seems to be false. It’s unlikely that the correlation in retail forex volume would be accurate since it so widely spread out among different brookers. FXCM is one of the bigger, and their volume represents only 0.5% av total market volume.

Like I said, I don’t know, I don’t care, what I know is that it works for me, you draw your own conclusions.

Thanks. What you say seems to be the only logical answer to my question, since there still is no centralized exchange.

But how come that credible FX-brookers like FXCM are advertising their “Active Trader” account with the access to this funciton (they call it market depth)?

I’ve read your message a few times and I believe in what you’re saying. I’ve earlier thought about using the volume of the CME currency futures for trading the underlying FX-pair, BUT I think I’m now going to leave that idea.

Will you send him over when I fancy a day off?

Sorry Haank off topic for just a second. Thanks Rhody, I can’t believe I used the term “the fact is it seems” LOL. It’s nothing like a fact it’s just me, correlating over about a WHOLE two weeks worth of data, so I apologise for my silly assertion. I find the whole retail vs. commercials difficult to get my head round, like if 60% of retail are on the right side of the trade and presumably commercials are right more than they’re wrong, but when retailers are wrong it costs them more etc., can of worms but I’d love to understand more about this side of FX. Now volume you say…

OK I admit I was lazy not to explain, but sometimes you go to the effort of making valid points in a post thinking you are contributing to the start of an interesting discussion and then it dies, here we might disagree fiercely but it’s still a good debate.

I did do one heck of a lot of research on this and found no real answer to my questions, I loaded numerous MT4 terminals and I drew my conclusions from research and observations of Forex in comparison to the writings on the subject about stocks, and in my view it compares and my trading is more profitable.

I’ll give you that (placebo effect), honestly I have been looking out for it, it’s kind of like I still have a 21ma on all my charts, I know it doesn’t mean anything of significance, but I’ve grown to like it, it’s like an old friend, I could trade around it all day long, it’s a marker.

So as long as my volume indicator works as my marker I’ll keep it, that is until you send your German Sheppard over to trade for me! :slight_smile:

It seems that you cannot in any way justify the use of retail forex volume for trading. The only thing you do is to contend it makes alot of profit for you. [B]Doubtful[/B].

This site you seem to be controling Purple Patch Forex Training Course doesn’t increase your credibility, really.

It’s a FXCM retail trader sentiment indicator packaged with marketing jargon to give them (FXCM retail trader) another toy to play with.

I take note of it but that’s it. In the past there have been some serious questions asked about the reliability of this information.

Intention of order book (money-flows) WITHOUT single centralised exchange moves price in FOREX.

A lot of former stock trader I know of needed time to adjust to that fact because stock trading strategies inc. volume didn’t work for them in FOREX.

Do you mean that you do use volume in your forex-trading? “You take note of it”

Well lets say you see a pin bar reversal at a swing high point and this is accompained by a high volume spike or increasing volume upto this point, I would give the reversal a higher probability of continuing than if volume was flat or decreasing. You only need to scroll back the chart and this [I]seems[/I] to be the case, no?