Is using MT4’s volume in trading FX a bad idea? Since it’s based on Tick Volume instead of the amount of contracts. I am aware the only true volume available comes from the Futures contracts traded at CME. But I’m wondering if the difference between tick volume and the “normal” volume are substantial enough to totally discredit the former. (Useless and irrelevant?) What do the pros think?
Good morning,
Well here’s my ‘two cents’:
As you’ve noted: you’re not seeing the same volume figures as you would on a futures contract i.e. you’re only seeing the volume of trades on a particular pair at your broker. Now given that a large percentage of retail traders are wrong: logically speaking if price is falling (for example) and volume is increasing then who is to say that this large percentage of retail traders are selling in large volumes at your broker but they’re wrong??? Does that make sense??? Put it this way: if you could have a retail trading account with Goldman Sachs, for example, and you were able to see THEIR volume being traded in isolation: then I’d say that would mean something.
Admittedly: I don’t look at volume (and I don’t trade forex as a rule either) so I’m really just giving you my opinion based on my own personal logic.
Regards,
Dale.
Edit:
Then again if MT4’s volume is indeed based on ‘tick volume’ then it just occurred to me that MAYBE you’d be better off fading the move i.e. it’s a valid method to fade the REAL tick volume when trading stocks (when the tick volume starts to reach a ‘climax’ or ‘frenzy’ it’s time to get ready to fade the move so why should this not apply to YOUR ‘tick volume’)??? Just a thought.