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gabroo_munda
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Are you guys suggesting that a price to be displayed on a chart has to have a transaction? If this is the case my initial example of price moving without volume stands to be incorrect.
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Thanks once again for your replies. I have started to understand the volume dynamics but now am confused at another aspect....The price. Why does the price move up and down when everyone only reacts to the current price and no one actually sets it? in simpler words....a futures contract is for $100. Person A sells one contract and person B buys it. Everyone else just notices a volume of 1. This transaction should have no effect on the price. Now how does the price rise or fall from here? Buyers/sellers are sitting in from of their computers and waiting for price to go down/up...but these buyers/sellers dn't tell anyone that they want to buy/sell the future contract. They are just sitting in front of their computers in a reactionary mode. So how does the exchange move the price when buyers/sellers dn't make their intent public until they hit the button? Is there an pit angle to all this where real bidding and asking happens?
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Thanks for all your replies. It makes sense... My next question will be....why do people get excited with volume spikes. If there is huge volume at a price bar....then all it means is sellers believe they cannot get a higher price....and buyers believe they cannot get a lower price. So as such high volume is meaningless as prices can either direction after this volume spike.
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Hi Everyone, I am new to this stuff so please excuse this dumb question. As I understand.....volume is the number of completed transactions (buy and sell). So can price go from one point to another without volume? To clear my point...lets say there are only 2 participants. I want to buy commodity A. I tell the seller that I'll pay $200. he rejects...and i up my offer to #300. he does not agree and finally i make an offer of $400. So now the price has moved from $200 to $400...without any volume as we did not do any transaction. Is my understanding correct? Thanks
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I like the liquidity of Forex.
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me is hooked :cinema:
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Introduce Yourself Here - Don't Be Shy!!
gabroo_munda replied to trading4life's topic in Beginners Forum
Hi, I am from India too. Not living there but that does not make me any less Indian. Good to see fellow traders here.