<<I guess that’s the problem with volume, depends what broker your with…>> according to Jason Rogers of FXCM that is not supposed to be so. Minor variations, yes, but not too much. Pl see his post #110 in http://forums.babypips.com/fxcm/38711-fxcm-announcements-11.html.
no worries always here to help.
Good to see you back dude. How’s the trading going, still on a winning streak?
Darth
interesting, I guess the best answer here is to only trade the stupidly big volume bars that way the odds are more in your favor.
Darth
Going great thanks man, just don’t get too much time for lil’ old Babypips, work’s been hectic lately.
Glad to see you are keeping the fort and posting like a machine, good man!
Well you know how it is, helps others which inadvertantly helps yourself.
Darth
Hey guys anyone else seen all the IB’S on the 4hr chart on the gold? looks ready for a break and I’m guessing that it will be up.
Darth
I would have to somewhat disagree on your analysis. Your are correct that their is a long term bullish bias, but a long at this point would be extremely risky, let me point out why. You had mentioned the weekly pin bar. That is the pin bar I pointed out a few weeks back and ended up making about 4% profit going on long it. I would say at this point that pin bar has ran it’s course as we have now reached a major resistance area. The second thing to mention is that in the chart you posted, there is a bearish hammer which has formed off of the AHT(All Time High). The other big thing to look at is correlation. The SP correlates strong to the Dow Jones which is flirting with the possibility of a 1-2-3 reversal pattern right now. Every day that closes below the 16300(key trend-line resistance) increases the chance of that reversal playing out. Right now the market is at a point of inflection which means the market isn’t giving us clear direction either way, but whatever direction is does break out in, it will most likely be a huge breakout. Which may come with some major volatility and whipsawing. When you have a long term bull trend bumping into a major resistance and showing signs of weakness, it’s almost certainly best to let the direction shake out, wait for the pullback to jump in.
This is GU H4
Interesting analysis, I was shorting this from the beeb that formed last week but got stopped out yesterday, The only down fall of my trade was that the beeb didn’t form close enough to the S/R level. But I agree this pair looks indecisive. Congrats on that win my DJ30 PB w1 trade never got triggered but thats the draw back of retracement entires I guess.
Looking forward to seeing some chart analysis whenever you get the chance.
Darth
I’m not sure I understand how you really can know what kind of volume is moving the markets in forex. At the end of the day, if there is a wide bar during the London and NY session combined, you know that there had to be significant volume to move say, the EURUSD. I suppose if you always watch volume your broker provides, you can get a relative feel for what big volume is on a certain pair - is this what you are trying to achieve?
To me, if you really are looking at volume to make a trading decision, wouldn’t you trade futures?
I am trying to learn more about volume myself in the forex markets, so I appreciate any feedback.
I’ve also heard from credible sources that you can trade up to 150 standard lots without moving the market, does anyone have any thoughts on position size?
Gold has reached a very major resistance area in the 1340-1350 range. As I mentioned in my post to Adam, going long right below a resistance line is very dangerous. What makes the type of price action trading we do here so successful is that we go long at support, and go short at resistance. And we make those trades from price action setups that give us even more of an edge. There are 2 types of inside bar trades, as a continuation or as a reversal. You trade the continuation when you are trading with the trend and you aren’t trading directly into resistance. When an inside bar forms right below a key resistance, it is usually traded as a reversal signal, not as a continuation. If you do think price will continue, you want to wait for price to break through resistance and then pull back before you jump in line.
This is one of the big reasons I wanted to wait to highlight IBs here because they are themselves a neutral candle pattern, and they only supply true trading edges in certain types of setups. IBs have a high rate of false breaks which makes them difficult to trade profitably. As you drop below daily time frame, IBs become even more random with higher failure rates. I don’t mind IB discussion here but I want to make sure we are still trading with an edge, and not trading into resistances.
One of the FXCM reps posted a link to FXCMs volume discrepency between the two platforms and explained why they look different. You may need to scroll back a few pages to find it. I will also look for it and link to it on our home page as this is a question that pops up a lot.
If your able to trade with 150 lots in 1 go…can we be friends?
Darth
We use volume just to supplement our analysis. The majority of price action trading is trading price reversals. Usually when the market tries to break through a resistance and fails, that tips us off that a reversal is near. When we see a false break, we want to see it on higher than normal volume. This tells us that there was a real push to break through resistance and the major market makers were able to keep price suppressed. This also tells us that there are now a lot of traders who are being squeezed in their positions, which could trigger a very quick and aggressive reversal. When we see those false breaks on light volume we have to question if it was an actual false break or if price is just meandering around. Volume is not necessary for trading but I do believe it gives us just a little clearer look at the price story. Banks trade in 100,000$ chunks, so that much must be traded for price to “tick”. If we see a high tick volume, that means a lot of money was trading hands for that candle. A good example to see how volume changes the story is if in 1 day price only moves 30 pips, on 10,000 volume. The next day price moves 30 pips on 500,000 volume. Without volume, those 2 days look about the same. But when you look at volume you can see that the first day the low pip movement was a result of light volume. Not much speculation going on, just some casual trading. The second day gives us the picture of a huge battle that took place between bulls and bears, and neither of them were able to win the day. This could hint to a huge breakout in the near future.
Glad to have your input Aaron, I haven’t traded them of yet just something I’m monitoring along side volume, whuch cannot hurt as its a way of reading the price action story better. But thanks for the great advice I wasnt’ going to trade them but definitely be watching to see how they turn out.
Darth
on the break of the mother candle, but the low has been taken out instead, though there is a nice bullish engulfing candle formed now.
If you follow a pair for a long time, like I have followed gold for so long, you will just “know”.
Those IB’s are going to take it to the weekly trend line then from there it will come down for the retrace.
As for the S&P, imo, it will be a great setup, even though the low of the IB has given out, I am still convinced it will continue up,just waiting for the right PA to enter.
If you don’t take risks, you won’t bank 
150 lots without moving the market??? Even 1000 lots won’t move the market… or maybe I am stopping loads of scalpers out when my orders get filled haha
I respect your experience with the markets, but you never “know” what the market will do. There is the more probable outcome and the less probable outcome, that’s it, and 95% of the time the outcome is close to random, which is why we sometimes wait days or weeks for the right setup. It’s extremely dangerous to think price will perfectly follow the lines you drawn out on your screen. I’ve been trading for about 10 years now and the markets don’t always do what I think they should, or obey the lines I have marked on my charts. If they did none of us would be chatting in this forum, we would all be cruising the ocean in our 100 million dollar yachts.
"[B]If you don’t take risks, you won’t bank :P[/B]"
We have a casino a few towns over and people there are taking risks all day, although 99% of them walk away broke. Having a trading edge is about reducing risk as much as possible, so I would say the less risky the more you bank and the more you risk the quicker your risk-of-ruin. Also remember that most people here don’t have the the years of experience you do and will lose much more on excessively risky trades.
Again I am not against the IB pattern, that is a pattern I use in my own personal trading plan but we need to stick to the foundation of the trading method here which is trading pullbacks and reversals and also having support underneath us when we go long and resistance above us when we short. That means not every inside bar is tradable, and realistically about 90-95% of IBs won’t fit that criteria and should be avoided.
Thanks for your thoughts. I definitely understand how you analyze volume when you look at the PA in relation to support/resistance.
I’m just curious as to how people view this volume, as well as what kind of volume is moving the market, since the total daily volume is reported to be so large in the forex market. My background includes a stint as a market maker and floor trader at the CBOE and Merc so I’m familiar with watching volume create big market moves.
When I see those big 50 pip bars on the EURUSD I’m always wondering what kind of size is pushing the market around 
Thanks again!