Peronally i am trying to follow and understand when in fact i should be sleeping at this hour. Not about belief. I’m off to bed.
[QUOTE=“WinPsych;620443”] Peronally i am trying to follow and understand when in fact i should be sleeping at this hour. Not about belief. I’m off to bed.[/QUOTE]
I’m not upset at you man lol. Sleep well, tomorrow is open.
Okay, please explain how you calculate the real volume, I’m confused?
Clearly you didn’t read my pg 14. Nonetheless I will still explain.
Money directly moves price. Correct? Let’s use EU as an example. As more money is taken out of the EU pair, ie Euro’s are traded for US dollars… The exchange rate itself goes up. Why is that? Supply and demand you could say. The less Euro’s in the market, the more valuable Euro’s become in respect to dollars (assuming their is a cap to how many Euro’s are actually inside the market, now their are less Euro’s to Exchange for dollars therefore it costs more dollars to buy euros…). Makes sense so far yes? Now what causes the Euro to go down in price? Same thing visa verse… More people come to the market with Euro’s and exchange them for dollars. Therefore the market now has an excess of Euro’s and dollars are deemed more valuable to future investors so to speak.
Now keep all that in mind while I continue. If you do not believe the money put in and taken out of the market directly moves price from point A to point B, then you reading on is a waste of your time. Now what does this have to do with volume… Volume = the actual amount of money invested/withdrawn from the market during the given time frame it is being quoted for. There is nothing wrong with the volume the broker gives us. Since so much money is traded in the foreign exchange per second, its nearly impossible for the broker to give you the exact amount of money (quoted to us in integer form) per the time frame requested. So for the most part, brokers round the integer values given to us. Rounding the money isn’t even that big a deal… Brokers do not directionalize the volume they give us. Price goes up and down yes? Money IS directional, it goes in AND out of the market via the actual exchange itself. Since they do not directionalize the volume when they quote it, its like absolute valuing the negative money (money coming out) and adding it to the positive money (money going in) for the Total volume as i call it, the volume they quote and you see on your screen. I’m not interested in the volume the broker gives me. I wanted to know exactly how much volume it took to move price from point A to point B, not the excess volume as well, I wanted to know the EXACT volume. Through much studying and “scientific” testing i suppose you could say, I figured out exactly how to calculate the real volume as I call it. I determined volume is price dependent, and that movement was the direct result of the “real” or as i call it “net” volume. I could go into much more detail on exactly how i found it etc, but I should probably just save that for my book…
The thesis for my masters degree if I ever decided to get one: inverse of price multiplied by the movement of price (in pips) equals net volume. So for example, lets assume you wanted to know the volume for a candle, but only from open to close… the equation looks like this. V = (1/Opening Price)*[(Close-Open)*10000].
Almost forgot. I just showed you how to calculate the volume. NOT the money. the volume is quoted in integer form, not monetary form. I am under the impression one Unit/integer of volume being quoted is actually represents 1 Lot in the FX market that has been exchanged. 1 Lot = $100,000 therefore I multiply the Volume by 100k to determine the money.
Are you satisfied? Now do you want to completely disregard my concept which goes way more into depth than that simple equation i just explained to you? Maybe you should go back and actually read what I am doing before you disregard me as some stupid kid. Thanks.
I’ve just carefully read this explanation and over the last month I’ve actually read your pg 14 explanation at least 8 times. I do understand what you’re attempting to do, sorry to say the core theory of your trading method is incorrect.
What you’re doing might make sense if you were trading in a centralized exchange, NYSE, NASDAQ, NIKKEI, NYMEX, etc. but not in retail FX.
The overwhelming majority (80%-90%) of the daily FX trading volume takes place at the interbank level. The trading volume at the interbank level is never passed down to the retail market via market makers or ECN brokers.
For example, a 50-million dollar or 1-billion sell EUR/USD order could be executed at the interbank level and you wouldn’t have any clues it happen at the retail level.
Where did you learn this stuff, maybe from someone trading stocks?
PS again 1 unit of volume does not unit equal 1 lot exchanged. No, no, no, 
Then if I am able to figure out what 1 unit of volume does represent then I will have the correct answer in monetary form. That’s the beauty if all this, I do not need to know all the bank information. I can reverse engineer the real volume (bank volume is present/determined in the integer value). I could divide upper-Lower volume/open to close volume and probably get a similar result… The money is what makes It more precise.
I didn’t learn any of this anywhere my dude. I figured it out on my own. If I am unable to determine exactly what 1 integer value of volume represents in monetary value, then you really got me thinking that maybe I shouldn’t even convert it.
Let me try to explain it in a different way. If the EU opening price was 1.3750 and the closing price was 1.3790 there is no way to know how much money it took to move the price the 40 pips. The FX market is not a centralized market, there is no central exchange, there is no centralized measurement of volume.
If we were talking about a 40 point increase of the price of a stock traded on a centralized exchange, we could figure out how much money was needed for the 40 point move.
Again, on a retail FX platform, 1 unit of volume does not equal 1 lot traded, does not equal 1 trade executed, does not equal anything but a change in price.
Make sense?
Assuming you are correct… The money is irrelevant. The volume however ( regardless of what it represents) can be determined using that equation I posted in my earlier post. Like I said, I have proof of this, I tested it extensively.
And yes I do agree, I could use this for stocks if I wanted. But I have no interest in stocks right now.
There is no correlation between the volume displayed on your retail platform and the amount of money traded in the FX market.
You can calculate your equation and get an answer, but your answer does not represent the amount of money traded.
The majority of the money is still traded in private behind closed doors at the interbank level.
Guys, is VWAP volume-weighted average price any help here?
[QUOTE=“WinPsych;620483”]Guys, is VWAP volume-weighted average price any help here?[/QUOTE]
Whatever floats your boat xD. I call my equation the Real Net Volume or RNT for short.
So, after some guidance from my team, and after some insight from this article:
I have decided to go back to exactly what I was doing late march early April. I’m going to use the same spreadsheet even though I view it as “flawed” so to speak. The patterns it produces are like none other I have ever seen. With more practice, definitely some discipline, and a tighter stop… I should be be on track to profitable trading once again! It’s hard for me to accept a have a few “flaws” in my sheet, but Mr. Mandelbrot himself says it best, “The lesson, to Mandelbrot, is obvious: Go with the math that matches the problem, even if it seems strange.”
I do not view my system late march/early April sheet as strange, however the math itself matches the problem to me. The days I traded it correctly I had the most success I have ever had in terms of RR, and entry!
So with that in mind, out with the new, back in with the old!
Until the market opens, I’m going to actually do some hw for a change. LiquidGenius knows what I am talking about lol. Time to compare the good trades to say other and review the bad trades. Be back around midnight tonight to place my Monday trade! Hope everyone had a great weekend.
Lets have a good week bro, do what you were doing…
Dunning-Kruger effect is strong with this one.
[B]The Dunning-Kruger effect[/B] is the finding that the poorest performers are the least aware of their own incompetence.
[QUOTE=“MoneyNVRSleeps;620518”]Lets have a good week bro, do what you were doing…[/QUOTE]
Exactly. Will do.
[QUOTE=“TrollTrollington;620519”]Dunning-Kruger effect is strong with this one.[/QUOTE]
Do not post in my journal again please. I’m not going to argue with a 13 year old. If you continue to post I am just going to keep reporting your posts until you get banned.
I need to do some more testing of course, but I’m really think I am getting the hang of this new concept. It’s phenomenal. I wouldn’t base any trades of these “predictions” any time soon, but I am posting this for my own review and to look back at in the future. What my expectations are for the day…
Today these pair should close:
AJ Short (I’m taking this trade)
GN Short
NJ Long
EU Short
AU Buy
EN Short
GU Short
CHFJ Long (going to take this trade too)
GJ Short (Not 100% sure, but most likely… haven’t seen this much spread before)
NU Long (will probably take this too)
I’m pretty surprised. I did pretty well on my “predictions” for yesterday before I even spent a lengthy amount of time back testing. I tested the hell out of EJ today for several hours. Everything looks good. Going to test like crazy tomorrow, hopefully have a few months instead of just 1 month. So much to look forward too.
Since I have two accounts and I already entered CHFJ and NU yesterday… I checked the signals and I got longs for both CHFJ and NU so I’m holding my trades I entered at
CHFJ Long at 115.84
NU Long at .8689
on my Leg0nd account I longed EJ, EJ looks nice.
EJ Long at 140.706
All of my trades will have a 60 pip stop loss now. Hopefully they won’t even get close!
Be back in the morning with an update.
I’m back with an update and a little insight on what I have been so excited about. In short I believe I discovered how to Reverse engineer the Total Volume for the time frame it is being quoted for. Has it ever crossed your mind that brokers round up the volume the quote? Basically lying about it all together? It has crossed my mind a hella lot, which is why I never use it. If you haven’t noticed this discrepancy, try summing up the broker volume for an entire day for the 1m chart, 1hr chart, and 4 hr chart… compare those volumes to the volume on the Day chart. They do not line up. This is not logical, and is an outright atrocity. So with some clever thinking, plus the use of my volume equation and some simple math… I reverse engineering the Broker volume and got what I call the Real Total Volume. Brokers can not be trusted for anything more than Open and Closing prices. That is my firm belief. Anyhow, I compared the results I got compared to the broker and I found a nice little direction indication. Using this new signal in compliance with my spreadsheet I was trading two weeks back leads me to believe I have a much more well rounded system now. Anyhow, this is only the first week, I still need to continue testing which like I said I will be doing a lot today and the rest of the week, but I really think I am onto something now.
Anyways… My trades today look good. NU was obvious it was going to draw down, but since I was already in from Sunday, their wasn’t much I could do other than hope it didn’t hit my stop loss of 60 pips. (It came within a pip of it while I was sleeping). Fortunately NU is gaining like expected, and so are the other pairs.
CHFJ: +1.6 pips
NU: -20 pips
EJ: +2 pips