Indicator Volume

[Doge]

First we begin with some theoretical stuff: there are two kinds of Volume we can put on our charts - Real or Tick Volume.
Real volume shows the actuall currency/stock/metal exchanged for the period of a particular bar, Tick Volume shows the number of price changes for the period, which is approximately the number of trades made. Some platforms take in account two consecutive ticks at the same price as one and that is where the 'aproximate' part comes from. In Forex of CFD markets real volume is not available, at least for us poor retail traders. Real and Tick volume are not the same, but there is a connection between them - the more trades made the more volume exchanged. In most cases that is more than enough for technical analysis.

[Doge]

How to find the reports?
go to cftc.gov and check the 'Commitment of Traders' (that is what COT stands for) under 'market reports'.
The currency futures are under Current Legacy Reports/Chicago Board of Trade and Current Traders in Financial Futures. There is historical data available also.

[Doge]

'Asset manager' and 'Leveraged funds' from the 'Financial futures' report are probably the most important category from currency futures, as these are practically the big speculators. A real fundamental analysis can be done based on this, as the actual fundaments of the market are the reasons for supply and demand and these are best noted in the actual behaviour of the market contragents.

[Doge]

It is important to know that this reports come a few days after the week is over - meaning they can't be really used for basing trades on them, but more like making our long term sentiment about the market.
There are some indicators around available that can plot those values on a mt4 chart where we can compare them with price action and real or tick volume. It possible (and recomended) to follow up the change of open interest over the week and look at which points exactly it is most probable those changes have occured.

[Doge]

The downside of ready-for-download COT-report indicators is that most of them plot the number of contracts, and for our need it is better to have the change from last time - both in numbers and in percentage, probably some benchmark for a 'normal change' - a moving average or something, and the 'change in the change' - the relative value of the last change to the previous one and/or the benchmark.

[nkhan2810]

I am very happy that you have presented this thread nicely about indicator volume. I once thought writing about it. Whatever I have a question regarding this indicator. We know volume indicator show us how much volume it has been traded. But I think the value we are seeing is only for the trades from the broker whose software we are using. If it is true then it may give you some idea of the volume traded but it is far away from real volume. Can you please clarify the matter?

[Doge]

I am very happy that you have presented this thread nicely about indicator volume. I once thought writing about it. Whatever I have a question regarding this indicator. We know volume indicator show us how much volume it has been traded. But I think the value we are seeing is only for the trades from the broker whose software we are using. If it is true then it may give you some idea of the volume traded but it is far away from real volume. Can you please clarify the matter?

I know contest is over still hope you see my reply.
Yes, if we have a currency market and real volume it will only show the broker liquidity pool's only. Also if it is tick volume - it will only show the number of trades made here. We can't have the actual number of any volumes in currency markets, but it doesn't matter - we need the comparative only - to near bars or to bars from same hours of trading session.
Liquidity pools are connected - mostly by arbitragers. If, for example, there is big volume of buy orders in one part of the market some HFT traders will detect the opportunity and buy from another parts (another liquidity pools) and sell to those initial buyers (their orders will push the price up - and there is the opportunity for arbitrage between different pools). So this initial volume will be shown on all poopls, not just the one it is executed. This is how currency quotes are approximately the same in all parts of the world also, and how the currency futures market is matching the forex (currency swap) market we trade. Brent and WTI oil (and all others also) have similar connection also. This big time arbitrage goes for 'liquidity providing' in legal terms, no matter it is not actually the same.

[nkhan2810]

Thanks for your nice reply. Now I got it. That is why I say we can learn from anybody. No matter I am a pro member here I can still learn from a good member like you. And this contest was the among the best I participated. I think we shared our knowledge and it really helped hundreds around the world. So I say it a successful contest from forum roboforex.

[impexo27]

Volume indicator is one of the best ways to make money. Money making was never an easy thing in the world of financial intabiity but with proper way we can make good money and we can make huge returns in the forex as well as in the stock market also.

[layigold]

Thanks for sharing something on volume but I can even trade price action successfully without making use of volume and something whose absence on the platform does not affect my ability to analyze market correctly is considered irrelevant to me because another man's food is another man's poison, though I stand to be corrected. I will prefer to trade without using volume so as to avoid confusion

[sameeh]

it is good to find an explanation to this indicator and know how it works because i was not understand how we can trade with it but after reading this explanation i will start to understand its nature and how it works, i saw many traders talk about it and its efficiency of trading but i was not know how they trade with it and make money.