Hey f, do you fully understand Wyckoff’s theories on volume? I am not talking about a Guru’s interpretation, I am talking about what he actually developed, and the data he used to develop this system?
The Ever Wondering VIPER
TEWV: Definitely not.
Do you ask based on my potetial TPs and the current PA on my positions?
“Hey f, do you fully understand Wyckoff’s theories on volume?”
I’ve read a few articles on the history of the development of his system and how some traders will interpret it.
In my last post I was refering to a description of price action, and if I recall correctly a low volume test on the following candle, that begins around that time stamp. This, inconjunction with my recollection of reading a similar approach in Anna Couling’s book forex for beginners struck a chord with me.
I have found chart reading to be so nuanced that I have to make notes to myself.
Am I off track or misinterpreting something?
KC
BTW @TradeViper - Thanks for checking my thread!
@TradeViper , piqued my curiosity with his question and I did a quick read on investopedia.
I am sure that this only scratches the surface of Elliott Wave Theory. Certainly something to follow-up with.
Here is some of my reading for the next few days
https://forums.babypips.com/search?q=elliott%20wave%20theory
KC
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Current positions are off recent highs. I have to continue to improve profit taking as a pip is a pip. Take them while I have them and can re-enter on the pull back.
Trading the daily I will still use the 1H and 4H for entries. I have to remember to continually check all time frames. What appears to be a concerning down turn on the 1H and will tempt me to sell, can look very different on a D. My patience is being tested.
Hey f. The subject of Volume can be a minefield, especially when it comes to Spot Currency, and Futures.
First we have to understand the context and circumstances Wyckoff was trading in. There were no automated charts when he was trading, they literally read the “tape” as it came out of the “ticker”, (which Thomas Edison had a hand in improving), anywho, remember that this “data” came from a central exchange and it was the only place in the universe where these stocks were traded. So Mr. W. looked at the Volume as a kind of sentiment indicator, (now remember this word sentiment), if there were large directional blocks going off, well the sentiment was in the direction of the move, whether up or down. Now if the move was up on “light” volume, you would be looking for a reversal, because sentiment was tentative at best. Also a lot of volume at a particular price would indicate a level.
So, big blocks buying would show an absolute bullish sentiment, because the only way GE could be traded would be on the NYSE, there were no other places to buy and sell, and again people were buying for no other reason than value appreciation.
Now on to FOREX. Please remember that each “Broker” is the market maker, exchange, and broker rolled into one, so no VALID volume can be found. Each Broker/Dealer has its own numbers, so in reality, no one can ever know the exact total amount of EUR/USD traded at one moment in time, because the systems are not interconnected. When you look at an institutional feed you might see retail and 3 Primes, that’s it, and on their DOM, you can see the size going off. BUT, this only shows the size on on your hub, and not the whole world. So on to tick volume…
TICK Volume. This is the volume that is provided with all retail feeds, and it is as its name suggests, it is based on an up, down, or same tick. So a trade goes off, that is higher than the last, it shows one tick higher, but it does not show the size of the trade. So basically, tick volume shows the same thing as a candle, ohlc, or whatever. So it shows you nothing new.
I am not going to elaborate on futures here, but, because of hedging actuals, options arbitrage, etc. you cannot get a sense of the market sentiment by looking at the volume either.
Anyway, bottom line, Volume in Spot Currency is useless, it doesn’t show you anything you cannot see with a regular candle chart. Now if you really want to get something useful, look into hedging a long term Spot C trade with Options.
The Ever Educating VIPER
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@TradeViper , thanks for your reply!
I’m familiar with tick volume but never thought of it in that context. Very interesting!
Thanks for pointing that out,
KC
Hey f, I have published several posts on this subject. This was part of the issue with Lexys “Tmothy Nagley”. He was talking about things he had no idea about, and obviously could not explain. So when questioned the response was, “Whaaa moderators VIPER hurt my feelings”. I continue to call out the concept of Volume studies in Spot Currency, it does not and cannot work.
The best way to trade is to trade one pair, and get to know what it does, see the repetitions of patterns, and then trade your premise within this context, use levels to help set the context, use MAs as continually updating levels as a further refinement. You can also plug in a momentum indicator, which may help in setting the premise. ATR can help in setting TP and Stop sizes. But you can use whatever, even a nekkid chart, as long as you understand what the price is telling you.
The Ever Interested VIPER
Frandlost, this is great post. I congratulate you on your progress. Hope that many new traders will go through your writing and learn something useful for them. Good job
Good luck, bros
Do you ever venture can to the weekly charts at all?
Also, does using 1H charts for entries really make that much difference? I mean, lots can happen in 1H when trading the daily.
Good article by Nial Fuller
@TradeViper , I’ve been using levels and 9 & 20 MAs. I am using the ADX, without the -/+ as a momentum indicator. Is there a specific momentum indicator that you would suggest exploring?
I still have to incorporate ATR. Usually I’ll “eyeball” the daily/weekly candles; probably not a good habit to get into.
KC
You are correct in stating that tick volume does not show the size of the trades.
You are also correct in defining what tick volume is.
It shows the number of price changes in a given time interval but those price changes are not the same from one interval to the next. You could put two identical candles side by side and one could have been formed by fewer price changes than the other.
If volume creates volatility, you have an approximation through the number of ticks.
Many believe that tick volume is useless in FX, but others have found it useful.
Each to their own.
Lets say there are a huge amount of ticks and the tick volume indictor for the time period - say a 4H - is like a telephone pole towering over the vol bars to the left; couldn’t we extrapolate/interpolate and draw some conclusions using this information in conjunction with OHLC?
I’ll have to ponder this. I don’t believe it’s as straight forward as it appears and yet, perhaps it is as simple as @TradeViper says, that it’s all in the OHLC? Again, It’s one thing for a successful person to tell me how to succeed it’s another to understand, own and apply that knowledge.
The forex principle is so simple but practical application and success not so much! 
KC
Hello f, so here is something to ponder. On OANDA each tick is .00001, so each minimum move in price is the same. So you can’t go from 1.12375 to 1.12385 in one tick, it would take 10 ticks, so you would see price move up by 10 ticks on the candle, and of course this shows up on the “volume” indicator as ten ticks green. Now as far as the ratio of ticks per bar is concerned, the bar or candle moves in harmony with the “Volume” indicator, no matter how many ticks, it still moves at .00001 per.
You can do the math, but assuming 50 ticks, it is still 50 ticks. So you can’t have a candle that moves 35 pips with 3 ticks, or 3 pips with a billion (a yard of) ticks, it just cannot happen. The key to volume analysis is your ability to see the price change, look at the volume, or the amount of shares traded, and make a sentiment evaluation based on this.
In other words it is not the amount of trades made that is the focus, but the total amount of shares moved. Obviously this can be broken down further by dividing the shares moved by the number of trades, and who is on the “Bid”.
The Ever Setting The Record Straight VIPER
Picked this one as I remember it whilst it unfolded.
I know it’s not FX but there are ETF’s out there that are.
Anyways - XLE - see the volume right at the end of last year:
As price went down so the daily volume rose, seemed to almost reach down with all that volume.
See the level on WTI same time:
Thanks @TradeViper and @peterma for your input! It’s always helpful when members in your strata chime in!
USDMXN and the EURUSD are rising and I have been taking money off the table. DD continues to shrink and profits continue to rise.
As I have said before… I started my demo account with $1K which is what I plan to open a live account with. I have demo’d in a way that I plan on trading live. Small lots, pyramiding in, being patient and letting the trade develop. I am sure it will be a completely different story with real $$ on the line. 
Continue to work on my chart reading and refine my strategy/process through daily process of checking positions and spinning charts back, then using the step by step button and make buy/sell “trades” to see how they unfold using my strategy.
I was considering going with Turnkey for my broker. However, It’s my understanding that they only except bitcoin now and I have enough to continue to learn about than adding a whole new currency process into the mix.
Currently I am considering Oanda as I am a US res. or LMFX.
KC