Ah…yes…
although the biggest volume
came in today at 10am-11am
around 300m units:
Quite right, the largest volume was that day.
I sighted the previous days because I was watching this coming into the inflation report an that tall candle that formed on that BoE inflation report, I saw it go up all the volume came in at 10.30am exactly the first minute price rose . These days I look to get a good position before the event because that smart buyers with better info drop their cash earlier to get a better fill.
What I did not know before and this is just another thing you learn… Tick volume is based on number of time price changed at the bid and ask price. Take a look at this minute chart, I have been a lot of work lately on understanding high frequency trading from a market maker perspective. FxPro GBPUSD m1 D68wn | cTrader Above is a screen shot from 1m chart between 10.30am - 10.31am, the tick was 259, the more ticks, the more active HFT algos are with that broker, eventually price always settles at relatively the same place across brokers but the faster your brokers price changes the more the HFT firm rips you off in terms of entering the market.
This gave me a better understanding of how tick volume actually is of benefit (note it is still a theory as none of us have insight to the technology these guys use). So essentially the more price changes the more orders are being filled as the HFTs scalp and make more money of the demand or supply without actually being in the market at any point longer than a micro or millisecond meaning they have no exposure explaining why they can go for 5 years and never have a losing day, this is why volatility has increased in all markets as we go down time frames as volatility is important to these guys to make money. Just imagine how much was made on Euro swiss… So I look for volume movements ahead of big events as clue to direction as the smart guys always drop a lot more cash at times when the algos are quiet and they can get fills in a quiet market. Prior to my understanding of HFT algos the narrative has been, volume is about being in active buying and selling market infact the market is quieter than we think until HFT steps in fills orders coming from delayed price quotes, in a nut shell the markets we see on our screen doesn’t exist we are all looking at history as these guys have a 3-5 second head start.
Anyway back to Sterling… FxPro GBPUSD h1 268wn | cTrader
The green volume bar that formed on the 9/02 13:00 NY start suggested the market had found a bottom on the 1H followed by some buying climaxes.
On the 10/02 9:00 London Start we saw a volume bar turn white close to the previous day support halting at the 200MA suggesting another bottom. At 15:00 the same day into NY we see a buying Climax on that volume bar turn red. That for me was the smart money.
A good time to get long stops below the 200MA and previous trough (1.5190/87). The volume on the 12/02 10:00/10.30 leaves everyone with a poorer fill. The market on the 13/02 at 15:00 NY has now seen a white volume bar form at a top suggesting a possible down move, the green bar that formed before suggests a top for now. FxPro GBPUSD h1 Z68wn | cTrader
Any reversal may be temporary but there is the pain of seeing profits roll back.
Happy trading guys. Volume is the heart of trading. I have played with other strategies but I am always true to volume intraday.