What units is volume measured in?

I have been trying to find an answer to this question (in 2 parts) for quite some time now.

The most reasonable, understandable definition of volume that I can find is that it is the number of units of a currency pair traded for a given candle.

So, for example, if we are looking at the 1D EUR/USD chart, and the volume for a candle reads 5,000, that means “volume(1D) = 5,000 EUR/USD” (or could it mean “volume(1D) = 5,000 USD”?).

The first question I have: is the above an accurate definition?

The second, related, question I have is this:

If someone buys one hundred thousand (100,000) units (1 lot) of EUR/USD, will the Volume of the EUR/USD chart increase by one hundred thousand (100,000) or ten (10.0000), because in the latter case 1 USD pip = 0.0001?

If we look at yesterday’s 1D candle on TradingView for EUR/USD on OANDA, the volume was 150,741.56057. If we consider the average daily volume for all Forex is 6.6 trillion, I hope you can see why this second question also gets raised: because even if the volume on that particular chart is just for that particular broker, 150,741 and some change is a whole lot less than 6,600,000,000,000. And even if we factor in 1 pip = 0.0001, that’s still 660,000,000.0000 (660 million).

The only way I can see to rationalize this is to say that the average daily volume for all Forex is 6.6 trillion USD but I am only considering the 1D volume for EUR/USD in my comparison, and those 2 units are incompatible, which is the reason why they are wildly different. That’s just a guess but it seems reasonable enough.

Actually it looks this question is in three parts:

  1. Is “the number of units of a currency pair traded for a given candle” an accurate definition of volume?
  2. If so, which units?
  3. “If someone buys …”

I’m going to take a stab at answering question #2, assuming the answer to question #1 is “yes”. I think volume would be measured in EUR/USD, because, well, for one thing, we’re looking at the EUR/USD chart (not the USD chart, whatever that would be; DXY?).

But also recall that volume is actually an absolute value. It is the number of units traded not just buys and not just sells. It’s both! So if just buys were measured in USD, one would think that just sells might be measured in EUR (the amount of EUR sold). But since it’s both buys AND sells, it only makes sense that it would be in units of EUR/USD!

Blame my physics and chemistry teachers for drilling the importance of units into my head for thinking this way. :wink:

But also blame the fact that I have found TradingView indicators which calculate the “Quoted Volume” (which is the same as the default volume indicator) and “Base Volume” (which multiplies the quoted volume by price and gives the volume in units of the base currency, or so it seems).

“Units of EUR/USD” seems to make the most sense to me, but if anyone knows where to find a definitive definition from a reputable sourrce, I’d love to nail this down because nobody ever seems to get really specific about it. (A textbook, a research paper, or something similar would be ideal but even just a few people saying "such-and-such makes sense and here’s why" would be enough.)

The other 2 questions also remain open. :wink: