Price Action That Matters

[krugman25]

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!

Depends on the pair! The exotics are thinly traded so not as much, but the majors do huge volume. Forex is a 5 trillion dollar market so on the majors probably hundreds of millions of dollars to go a movement, and on the exotics probably a few million.

[Henry9986]

Perhaps Jason Rogers of FXCM can help out?

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.

[Henry9986]

Owing to time difference, saw your post hours late.

As far as I know we don’t need & are not after the [I]actual[/I] volumes in FX. [I]Relative [/I]volumes at different time suffice, as in stock trdg. We shd not compare trdg volumes of BAC with, say, SLB. But it makes sense to compare trdg volume of BAC today with its volume yesterday, last week… etc.

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?

[krugman25]

[QUOTE=“Henry9986;607039”]Owing to time difference, saw your post hours late. As far as I know we don’t need & are not after the actual volumes in FX. Relative volumes at different time suffice, as in stock trdg. We shd not compare trdg volumes of BAC with, say, SLB. But it makes sense to compare trdg volume of BAC today with its volume yesterday, last week… etc. [/QUOTE]

Great explanation Henry! Your exactly right, we just want to to see how volume is changing, not what the actual volume is. I know Forex volume method isn’t nearly as accurate as it is in the New York stock exchange but it does seem to give us the volume info we need to make educated decisions.

[krugman25]

I hope nobody here was trading crypto currency on Mt Gox! Been reading lots of stories of people losing everything, retirement funds and college tuitions.

[jwilldunk]

[QUOTE=“krugman25;607085”]I hope nobody here was trading crypto currency on Mt Gox! Been reading lots of stories of people losing everything, retirement funds and college tuitions.[/QUOTE]

I saw that too. Very sad.

[cyanidez]

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.

Aaron, it’s not said enough: thank you for staying rooted in honesty and always keeping it real for the rest of us that might start seeing $$$ signs way too much. I always appreciate these posts a ton as it refocuses me to trade responsibility and reminds me that is how I have achieved my success, not by being a trading cowboy! \

Take care man

[kayvon77]

Great explanation Henry! Your exactly right, we just want to to see how volume is changing, not what the actual volume is. I know Forex volume method isn’t nearly as accurate as it is in the New York stock exchange but it does seem to give us the volume info we need to make educated decisions.

Hi Aaron, I’m a fairly new trader here and have been following your discussions and lessons on here for some time now and I must say you have one of the more genuine and comprehensible threads in the forums. So besides the flattery :), I wanted to ask your opinion about using the On Balance Volume indicator as to gauge change in the volume. I think it may provide a good visual representation of the underlying volume compared to price action. You can use divergence and trend line analysis to see whether volume is in sync with price and asses the momentum behind it. What are your thoughts? Thank you again for an awesome thread.

Fellow “lurker”

[darthfrancis]

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

Dude let me get this right, on my broker 0.1= £1 a pip so 100.00= £1000 a pip (depending on the pair obviously) so your telling me your trading £1000 (roughly) a pip on 5 pairs/trades?

Why aren’t your retired and on Aaron’s $100 mil yacht and living the american dream? :42:

Darth

[darthfrancis]

I hope nobody here was trading crypto currency on Mt Gox! Been reading lots of stories of people losing everything, retirement funds and college tuitions.

Damn that sucks, but lesson learned here, 1 don’t put all your eggs in one basket (diversify your portfolio) and with big risk (bitcoin) comes big rewards/losses.

On another note, I’m sure bitcoin will be hit hard by this news… time to buy?.. KIDDING!!!

Darth

[cyanidez]

Dude let me get this right, on my broker 0.1= £1 a pip so 100.00= £1000 a pip (depending on the pair obviously) so your telling me your trading £1000 (roughly) a pip on 5 pairs/trades?

Why aren’t your retired and on Aaron’s $100 mil yacht and living the american dream?

Darth

Dude, interestingly on my broker (FXCM) it’s set up with microlots despite having a standard account.

So in my account, 100.00 lots = $10 a pip… I am hoping that is the case here, otherwise… :o

[darthfrancis]

Dude, interestingly on my broker (FXCM) it’s set up with microlots despite having a standard account.

So in my account, 100.00 lots = $10 a pip… I am hoping that is the case here, otherwise… :o

Must be down to the broker, I’m with Vantagefx UK, which one account for all, and with them a microlot is 0.01 which is roughly 10p and the smallest they do, 0.1 lot = £1, 1 lot = £10, etc…

so you can see why I’m like you trade a 100.00 lot size?! lol

Jedi

[Jason_Rogers]

But FXCM chart shows a very different pic on volume!

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.

Hi guys, here’s a link to my posts about this in another: 301 Moved Permanently

Henry, our techs are still looking into your follow up question, but I’ll post my response in that other thread when I hear back from them: 301 Moved Permanently

[Panupat]

It’s pretty amazing when these things just work… Gold H1 pin bar with RSI divergence.

[Henry9986]

Ascending triangle with double tops + bearish pin bar + bearish divergence Chart GBPCAD, D1, 2014.02.26 14:25 UTC, FxPro Financial Services Ltd, MetaTrader 4, Demo - MetaTrader Trading Platform Screenshots. Will see if it breaks up or down.

[Henry9986]

Thanks for your efforts.

Hi guys, here’s a link to my posts about this in another: 301 Moved Permanently

Henry, our techs are still looking into your follow up question, but I’ll post my response in that other thread when I hear back from them: 301 Moved Permanently

[Henry9986]

A good catch!

@Panupat

It’s pretty amazing when these things just work… Gold H1 pin bar with RSI divergence.

[adamjn]

Dude let me get this right, on my broker 0.1= £1 a pip so 100.00= £1000 a pip (depending on the pair obviously) so your telling me your trading £1000 (roughly) a pip on 5 pairs/trades?

Why aren’t your retired and on Aaron’s $100 mil yacht and living the american dream? :42:

Darth

Roughly $900-$1000 per pip.
If I was retired, I wouldn’t be making money, 2nd, I’m not American, so no dream, and thirdly, I do live a nice life style

[Bertacci]

Roughly $900-$1000 per pip.
If I was retired, I wouldn’t be making money, 2nd, I’m not American, so no dream, and thirdly, I do live a nice life style

Wouldn’t it be great if we had 100 lot traders contributing to the forums? For all I know they are out there! The beauty of forex is the liquidity is much much higher.

If your goal is to trade 100 lots, you need to really love trading, and not looking for a quick buck so you can “retire”. Traders I know that trade at this level got there through passion for the process of trading.

[Panupat]

I wish I’d get there one day adam! Right now I’m only risking $200 per trade. That’s about 0.5 lot for H1-H4 and sometimes only 0.1 lot on daily set up.

Yes I’m poor just like that lol. But we all have our dream to break free from this aren’t we?