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Forex: Using volume ticks charts. Expert question
Started:February 13th, 2013 (09:26 AM) by arjfca Views / Replies:2,624 / 9
Last Reply:February 14th, 2015 (10:25 PM) Attachments:1

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Forex: Using volume ticks charts. Expert question

Old February 13th, 2013, 09:26 AM   #1 (permalink)
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Forex: Using volume ticks charts. Expert question

Hello

In regular volume charts, it is possible to evaluate the health of a trend. Usually, in an uptrend, Volume will increase while the price go up and decrease when price retaliate.
At the end of a trend, Volume may increase, but price may be stalled.

Now, using ticks charts, how can I evaluate that? For sure I could evaluate the time took a bar to be created, The lowest time may mean and increase in volume velocity, but the difficulty is to determine what is a fast period. It all depend on your ticks bar resolution. A 250 ticks will be faster than a 2500 ticks chats to create a bar.

So my question is, how can I evaluate the heath of a trend using ticks charts

Any idea or opinion appreciated

Martin

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Old February 13th, 2013, 09:26 AM   #2 (permalink)
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Old February 13th, 2013, 11:35 AM   #3 (permalink)
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It is worth noting that tick volume in spot forex is a measure of the number of times price quotes change, where each change is one tick. In instruments like the ES futures a tick has another meaning, which is one trade regardless of the volume done on the trade.

So volume plotted on a 150 tick chart on spot forex would be 150 for every bar, if the software is configured to treat ticks as volume. For this reason, it is not possible to use volume in the usual way with tick charts of spot forex.

If a futures contract was being studied, which does have data for trades and volume, then the volume on each bar of a tick chart would vary and that would allow volume spread analysis (VSA) to be applied. A suitable example would the 6E contract.

To use VSA on the spot market, it is necessary to use time based charts, kagi or point and figure (P&F) charts to see changes in the activity on each bar.

With a P&F chart, you can look at the volume to see if the move is loosing strength or if a climactic event may have occurred. I prefer to have real volume rather than tick volume for VSA, but you can study the Dollar Index (DX) on the ICE exchange or the 6E contract along side spot forex with the EUR/USD pair.

In the P&F chart from NinjaTrader of the EUR/USD spot market, look at the high tick volume on the selling at (A) with a spread lower than the previous bar. There is supply, but the selling is being absorbed to some extent.

At (B) the selling and buying is not strong. If the market was weak then the selling should be stronger. It is also possible to read that the market is weak at that point, since the buying is not strong either, but we are in an uptrend, so the onus is on the bears to change the trend.

At (C) the buying is strong, but going down on the up bars, which indicates that the market is becoming exhausted of buyers.



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Old February 17th, 2013, 08:47 PM   #4 (permalink)
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In addition to what @pawnbroker said I'm finding cumulative delta helpful for using volume to trade spot Forex tick charts that have an associated active future (e.g., EUR.USD and 6e).

@FulcrumTrader contributed a couple of amazing videos to BMT on cumulative delta here and here

A (cumulative) volume divergence influenced spot FX trade I made recently is shown here

I've also resorted to a "seconds-per-bar" indicator for tick charts in the past


Last edited by bnichols; February 17th, 2013 at 08:58 PM. Reason: Acknowledge PB
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Old February 17th, 2013, 09:05 PM   #5 (permalink)
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Hi, interesting question for FX. Thnx for the question...would love to get additional insight. "In regular volume charts, it is possible to evaluate the health of a trend. Usually, in an uptrend, Volume will increase while the price go up and decrease when price retaliate. At the end of a trend, Volume may increase, but price may be stalled.".

Following are my thoughts. I do not trade Forex...but co-relating to FX since I do use some co-relations. Yes generally there is a conception Volume precedes PA. On ES I do not think...we can say that with certainty that always Volume Increases reflect Price going up or down from a trend standpoint. From an exhaustion standpoint there can be some effects of Volume increase/decrease. Price can move with very less volume. Major trends in 2012 started with very less volume in OVN sessions.
Having said that if it is short-term trends which are being looked at...indicators such as keltner/bollinger alongwith vwap can be used for FX & i think they work fine. There may be other ways to get a Volume trend done on FX but not aware. For ES there are other ways of gauging volume trends.

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Old February 18th, 2013, 06:21 AM   #6 (permalink)
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bnichols View Post
In addition to what @pawnbroker said I'm finding cumulative delta helpful for using volume to trade spot Forex tick charts that have an associated active future (e.g., EUR.USD and 6e).

@FulcrumTrader contributed a couple of amazing videos to BMT on cumulative delta here and here

A (cumulative) volume divergence influenced spot FX trade I made recently is shown here

I've also resorted to a "seconds-per-bar" indicator for tick charts in the past

Thanks

I agree about using the future volume related to a pair like 6E. My problem is, for the moment, getting future quote will cost me extra money for that data. My broker is IB and they don't give it for free. For sure, as soon as my trading business could pay for it, I will get it, but for now, I need to learn to work with the basis

Thanks for the links

Martin

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Old February 18th, 2013, 07:01 AM   #7 (permalink)
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I have a real time EUR/USD feed from IQ Feed, which comes with a "free" delayed 6E and Dollar Index (DX) feed and the same can be had from Kinetic for NinjaTrader for a cheaper price (with no DX delayed feed).

When looking at longer term charts, it is useful to have a delayed feed even in live day trading, but the EOD data is free, which is great for swing trading.

For example, the delayed 30 min chart of the DX is good to show when large volume comes in. A retest of the same level is a good place to look for a trend change.


The delayed feed is also useful if you want to sim trade or to compare ideas against real data.

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Old October 29th, 2013, 09:08 PM   #8 (permalink)
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IQ Feed Forex data


pawnbroker View Post
I have a real time EUR/USD feed from IQ Feed, which comes with a "free" delayed 6E and Dollar Index (DX) feed and the same can be had from Kinetic for NinjaTrader for a cheaper price (with no DX delayed feed).

When looking at longer term charts, it is useful to have a delayed feed even in live day trading, but the EOD data is free, which is great for swing trading.

For example, the delayed 30 min chart of the DX is good to show when large volume comes in. A retest of the same level is a good place to look for a trend change.


The delayed feed is also useful if you want to sim trade or to compare ideas against real data.


Hi Pawnbroker

Is the Forex Volume on time based charts with IQ Feed is not the same as tick volume per minute bar. Is it however just as effective for wykoff/vsa methods?

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Old February 11th, 2015, 02:53 AM   #9 (permalink)
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Forex: How do different brokers reconcile their prices?

My understanding is that you can't really know the volume in a forex market because there is no one central clearing house. BUT in that case, how does price change. If I buy thru one forex company and you sell thru another company, who is keeping track? Is it possible that my (small) forex broker can become out of sync with the rest of the market? How are the brokers connecting with one another?

Hope this makes sense.

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Old February 14th, 2015, 10:25 PM   #10 (permalink)
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Fx volumes are also available


The most liquid currency futures are not mapping real forex volumes. Compare volumes from multiple forex ECN (for example Dukascopy provided some volumes, Saxobank, Oanda if I'm not mistake) to CME volumes.... The nature of forex market and futures market is not the same!

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