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