Hey man, sorry I been really busy and lazy about posting. On the bright side I took 130 pips last week. Caught all of that beautiful sell in EU and got a nice short on Friday in AJ.
To address your questions… My entire system is built off a few simple formulas I use to calculate various (what i think is important) information about the market not found elsewhere.
It all starts with volume. According to Investopedia, Volume= The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller, then the volume for that period increases by 100 shares based on that transaction.
We can all agree with this when it comes to the stock market am I right? The belief in the currency market is that there is no centralized exchange and volume is measured in ticks. I decided I wanted to figure out what the real volume was mathematically so I did a few studies on 5 second charts and developed an equation based of my research. I guess you could say I have as close to what mathematicians call proofs as I could to prove the legitimacy of my equation. Long story short that’s how I came up with 1/price x movement in pips = real net volume equation… (1 unit of volume = 100,000 units transacted in the currency market I believe… or 1 standard lot) I have no proof for the previous statement, I simply used logic and a smart scientific guess because their is nothing on the internet on such a topic.
So using my volume equation First I found the real net volume between open and close on a 1 minute candle… then I multiplied that volume by $100,000 to get the net amount of money invested in that 1 minute. After collecting each minute and the amount of money invested I averaged the results from each minute and thats how i got that $44,000 average net invested per minute the other day. The average amount of money it took to move the market 1 pip during that day is roughly around $78,000 in the EU. I use these figures and some other ones to get a good judgment on volatility.
As far as buying and selling transactions canceling each other out more evenly etc… I do have those calculations as well all because of that volume equation. I figured out how much money longed each minute, and how much money sold each minute, what the net was, at what rate the money canceled out etc.Those where a little more difficult to calculate but I got them. Maybe sometime you would like to see my spreadsheet, It would blow your mind exactly how much information I was able to derive from just open close high low and volume that oanda gives me. I still like where I am from page 14 on this journal, that sumb and sums calcs are definitely legit. I also added average buy and sell 1 minute pip averages this past week to my sheet. I think it also has some volatility implications as well.
Anyhow feel free to private message me blue and i can go into more depth and send you the sheet if you are curious. I can pull any currency including gold, silver, and any yen pair you like.
Ok onto today. I longed EU going into the weekend. I got nervous and got in at a terrible price, but I should still be fine. 1.3523 was my entry with a stop at 1.3490 (almost got hit by .4 pips). Be back at open with an update.