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sharehunter

Tick Volume in Currency and Commondities Market

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Dear Friends!

 

My main method is VSA so when I join to currency and commondities market , I feel so difficult. Now I am study about to tick volume to use this like a real volume in stock market. But I am still don’t understand about Tick Volume, please kindly help me about some part of tick volume as bellow:

 

- What is tick volume? How to calculate tick volume and please give me an example

- Please introduce to me some brokers have MT4 platform and providing good tick volume

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Dear Friends!

 

My main method is VSA so when I join to currency and commondities market , I feel so difficult. Now I am study about to tick volume to use this like a real volume in stock market. But I am still don’t understand about Tick Volume, please kindly help me about some part of tick volume as bellow:

 

- What is tick volume? How to calculate tick volume and please give me an example

- Please introduce to me some brokers have MT4 platform and providing good tick volume

 

one tick = one trade

 

each trade can be in any volume

 

some trades are larger

some trades are smaller

 

in stocks, a minimum volume is 100 shares,

in futures, a minimum volume is 1 contract,

 

in forex... volume can be in any size, and is not usually reported.

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I have had to use ticks/trades as a proxy for volume. I abandoned it as it doesn't perform the same.

 

My next course of action was to access futures data where volume is reported. Ie. Use futures data to make trade decisions, then execute on the forex platform.

 

I never followed through as my research took me in a different direction. But if volume is your thing, that's the way to go.

 

Good Luck!

 

CJForex

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one tick = one trade

 

each trade can be in any volume

 

some trades are larger

some trades are smaller

 

in stocks, a minimum volume is 100 shares,

in futures, a minimum volume is 1 contract,

 

in forex... volume can be in any size, and is not usually reported.

 

In currency futures you can of course see the volume unlike the interbank market, as Tams says. This is where most traders that use Price and volume would ply their trade IMO.

 

If you have a 200 tick chart and it is showing 380 volume for the last bar, and 250 for the previous you can see that the average contract size traded has increased, handy info.

 

Cheers,

 

 

XS

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In currency futures you can of course see the volume unlike the interbank market, as Tams says. This is where most traders that use Price and volume would ply their trade IMO.

 

If you have a 200 tick chart and it is showing 380 volume for the last bar, and 250 for the previous you can see that the average contract size traded has increased, handy info.

 

Cheers,

 

 

XS

 

If you want to get an estimate of volume in the currencies or in any instrument that does not report volume, then learn how to use Market Profile.The original use for MP was to estimate volume on futures when volume was not reported. The MP equation is Time x Price = Volume. If you know 2, then you know the third.

 

Futures volume on currencies is just a sliver of the volume traded. I do not trust that it is a good representation of total volume.

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Futures volume on currencies is just a sliver of the volume traded.

 

Of course it is, its 8 hours out of 24hr market for starters. To boot, its contact volume.

 

Still, its the closest thing to true volume in the currency markets.

 

XS

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i know a little bit about MP but still do a research on it. right now I use tick volume of FXCM to for trading on wyckoff method. it lead to a good performance.

 

but i still dont completely understand what is tick volume and what is high tick volume mean, what is low tick volume mean. how does it stand for low and high activity, why it can be the same meaning with real volume

 

thanks

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but i still dont completely understand what is tick volume and what is high tick volume mean, what is low tick volume mean. how does it stand for low and high activity,

 

Tick Volume is simply a count of how many trades were recorded during that bar with no accounting for the size of those transactions. Real volume includes the size of trades in the recording.

Across large samples, tick volume correlates pretty well with real volume(especially with spikes) - but there are certain conditions when real volume is the only way to utilize 'volume' measures ...

 

re

why it can be the same meaning with real volume

At its simplest, high and low tick and real volumes both show levels of participation and urgency, etc

 

Oanda now has MT4 and I would 'trust' their tick count more than I would FXCM's - but who knows they may be the same... I have never had an FXCM account... any broker using Gain feed (if it's still called that) would also do in a pinch... ultimately you want to get to at least currenex level feed and if you're going to be really dependent on volume measures (ala Wycoff) get to futures and / or out of FX altogether...hth

Edited by zdo

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Tick Volume is simply a count of how many trades were recorded during that bar with no accounting for the size of those transactions. Real volume includes the size of trades in the recording.

Across large samples, tick volume correlates pretty well with real volume(especially with spikes) - but there are certain conditions when real volume is the only way to utilize 'volume' measures ...

 

re

 

At its simplest, high and low tick and real volumes both show levels of participation and urgency, etc

 

Oanda now has MT4 and I would 'trust' their tick count more than I would FXCM's - but who knows they may be the same... I have never had an FXCM account... any broker using Gain feed (if it's still called that) would also do in a pinch... ultimately you want to get to at least currenex level feed and if you're going to be really dependent on volume measures (ala Wycoff) get to futures and / or out of FX altogether...hth

 

Hi Zdo!

 

you helps me that "Tick Volume is simply a count of how many trades were recorded during that bar with no accounting for the size of those transactions". Please kindly tell me what is "trade"?

 

thanks a lot

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Hi Zdo!

 

you helps me that "Tick Volume is simply a count of how many trades were recorded during that bar with no accounting for the size of those transactions". Please kindly tell me what is "trade"?

 

thanks a lot

 

a "trade" is a transaction.

 

e.g.

 

I entered an order and bought 100 shares of IBM.... that's one trade. (ie. one tick)

 

Zdo can also enter an order to buy IBM, but he bought 200 shares.... that is also ONE trade. (ie. also one tick)

(assuming the order is consummated in one transaction.)

 

 

Hope this makes sense to you.

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a "trade" is a transaction.

 

e.g.

 

I entered an order and bought 100 shares of IBM.... that's one trade. (ie. one tick)

 

Zdo can also enter an order to buy IBM, but he bought 200 shares.... that is also ONE trade. (ie. also one tick)

(assuming the order is consummated in one transaction.)

 

 

Hope this makes sense to you.

 

thanks Tams!

 

if tick volume calculate like that the meaning of tick volume will be deffirent from real volume

 

for example: I make one trade with lot size is 0.01, you make one trade but the lot size is 1000 lot

 

the tick volume is same (one tick) but the meaning is so different. I hear so many guy, special Tom Wiliam company (tradeguider) said that tick volume in forex market is same meaning with real volume in stock market but i still dont understand why they can assume like that.

 

please kindly helps me

 

thanks a lot

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thanks Tams!

 

if tick volume calculate like that the meaning of tick volume will be deffirent from real volume

 

for example: I make one trade with lot size is 0.01, you make one trade but the lot size is 1000 lot

 

the tick volume is same (one tick) but the meaning is so different. I hear so many guy, special Tom Wiliam company (tradeguider) said that tick volume in forex market is same meaning with real volume in stock market but i still dont understand why they can assume like that.

 

please kindly helps me

 

thanks a lot

 

that's one of the reason why forex volume are seldom reported.

 

read CJForex's post above, forex traders use tick as a proxy.

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Some other friends told me that, number of ticks also depend on how many pips in price change.

 

for example: one trade make price change 20 pip have more than tick another trade only make price change 2 pip

 

i dont know this is right or wrong, please kindly helps

 

thanks

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There are some good posts here on tick volume, particularly zdo's one.

 

I'm not sure that two points are clear enough:

- tick "volume" is from a source and if the source is a broker then the it represents people in their market place so not only is it a subset of the total but it is likely to be skewed to their customers (losers?)

- the futures markets are very small compared with the total of forex trading so they may also be unrepresentative of what is really happening and may be distorted by manipulation to drag the currency market.

 

So basically its the old issues of garbage in garbage out ... and understand the limitations of your tools. I'd be very careful to qualify the extra edge tick volume offered - our eyes frequently deceive us.

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I have not researched, quantified, or applied this but I concluded that tick volume of retail FX is just that – an isolated indicator of retail activity with unsufficient consistent correlation with what the ‘banks’ ,etc are doing.

(and, btw, this thinking isn’t really based on a ‘smart money’ / ‘dumb money’ polarity. )

Based solely on the roots of VSA principles, I would be very hesitant to apply VSA ( or methods akin to VSA) to that data stream of ‘volume’. There are probably long periods of high correlation between the retail and ‘bank’ volume… but it’s when, at important times, those individual setups from the retail stream aren’t reflective at all of what really happening ‘at size’ that would keep me from using retail FX tick volume in those ways.

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Dear Friends!

 

My main method is VSA so when I join to currency and commondities market , I feel so difficult. Now I am study about to tick volume to use this like a real volume in stock market. But I am still don’t understand about Tick Volume, please kindly help me about some part of tick volume as bellow:

 

- What is tick volume? How to calculate tick volume and please give me an example

- Please introduce to me some brokers have MT4 platform and providing good tick volume

 

Hi Sharehunter,

You can get an understanding of why volume is so important, whether in stocks, futures or Forex, because it its release is either delayed (except to the Big Boys/Girls) or costs an arm and a leg to buy! In Forex, MT4 shows tick volume, which while it does not tell you just how much was traded, it tells you the RELATIVE amount of traded on that bar compared to volumes on all other bars. And, as 90% of the volume is due to Smart Money, one should pay attention to the volume!

 

If high volume on an upward move does not result in further rises, then it shows that a lot of that volume was selling by Smart Money too, putting a cap on the market and probably indicating a reversal, or at least a pullback to test a previous level before continuing up. Now you know why Smart Money does not want you to know what they are doing and why real volume is an expensive secret :-)

 

 

Regards,

 

 

Mike

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Hi Sharehunter,

You can get an understanding of why volume is so important, whether in stocks, futures or Forex, because it its release is either delayed (except to the Big Boys/Girls) or costs an arm and a leg to buy! In Forex, MT4 shows tick volume, which while it does not tell you just how much was traded, it tells you the RELATIVE amount of traded on that bar compared to volumes on all other bars. And, as 90% of the volume is due to Smart Money, one should pay attention to the volume!

 

If high volume on an upward move does not result in further rises, then it shows that a lot of that volume was selling by Smart Money too, putting a cap on the market and probably indicating a reversal, or at least a pullback to test a previous level before continuing up. Now you know why Smart Money does not want you to know what they are doing and why real volume is an expensive secret :-)

 

 

Regards,

 

 

Mike

 

Hi Blott!

 

In stock market, i do a research on wyckoff method and using it as my main method now. as i know Tom Wiliam said that we can use esignal tick volume with the meaning as real volume in stock market so i would like to know what is tick volume and why is tick volume in forex market same meaning with real volume in stock market. really, until now, i still dont understand clearly

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Tick volume is NOT a proxy to volume in FX markets. Sorry. If you discover something profitable in tick volume,

good for you, but it is not because you can somehow correlate tick activity to volume.

 

When price ticks up or down, it DOES not necessarily mean a transaction was consumed. It might be a change in

bid/ask, certainly change reflected on your chart data feed.

 

Also, the tick activity is a product of who is providing you with chart data feed. Each vendor will report different tick

volume depending where a vendor is sourcing its data. Sources send indicative prices, which will be reflected

in tick activity.

 

I think the the FX market structure is just a bit different, decentralized, but with EBS/Reuters driving

dealable prices and banks providing data feeds and sending indicative prices.

 

Good Luck.

Cable.Trader.

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Hi Cable Traders,

While I can't say I'm an expert on the finer points of what tick volume is, I do believe the clue is in the latter part of the name:)

 

If you care to take a look at the attached eurousd M1 chart, you will see clearly the correlation between volume and Smart Money activity (I am reliably informed that 95% of volume is produced by Smart Money activity, the rest by The Herd).

You will see that a relatively high volume spike, or a relatively low volume bar (i.e. no interest by SM to go in that direction), usually preceedes a change in price.

 

I have drawn in some RSI (4) divergence lines to help with decisions.

 

For other non-believers in the importance of volume to future price direction, may I suggest either buying your volume data from a commercial source (expensive; one wonders why...) or finding Tom Williams' YouTube videos (cheaper) to find out what is really happening in the markets.

 

Trading with volume is not a case of belief, like Religion; this is fact based on what one sees in front of one's eyes.

 

Kind regards,

 

 

blott

5aa710b4b2183_eurm1volume.thumb.gif.8573a873d30519db081f7a9e68dfd512.gif

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