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  1. #1
    Active Member victrader's Avatar

    Volume - What am I not seeing? !!!

    Hi guys. Would someone explain about the volume indicator on this chart please. It's set to show 'value up' in green, and 'value down' in red.

    I went OTM on a trade because I saw a large green line on a candle that was having trouble going up or down - bulls and bears were fighting it out. But it remained down.

    For example look at volume 26 december - green with the arrows. With that amount of 'up' (bull?)dominating why didn't that candle ascend?

    I know I am seeing something in the wrong way, but I'm not sure what that something is.

    Would appreciate your help.

    Click image for larger version. 

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    Last edited by victrader; 12-29-2016 at 05:43 PM. Reason: removed 2 attached images.

  2. #2
    Moderator Kolyo's Avatar
    Hi victrader,

    You probably know that volume indicator on Forex instruments indicates not real traded volume, because it is unknown, but the tick volume which is the number of ticks counted on the inter-bank market. We believe that the number of this ticks is proportional to the real volume, but this is only approximate. The tick volume mean the number of ticks up or ticks down on the given instrument. I am not 100% sure but I think the red color is for bars which include more down ticks than up ticks, and the green color in opposite to more upticks than down ticks inside the given bar. That's what I believe is the reason you see a green volume on down bars, it is just because there are less down ticks and more upticks, despite the down ticks are larger in size.
    "The goal of a successful trader is to make the best trades. Money is secondary." - Alexander Elder

  3. #3
    Legendry Member Okane's Avatar
    Hey.

    First, the indicators don't show you the future. This is unfortunately what most newbies think;
    "it's overbought so it should go down", "it's below the EMA so it must be bearish now"... you get the point.

    Second, you are/were trading during a holiday period when there is pretty much no volatility in the market
    and the market also behaves in unusual ways due to it.

    Third: you can see that EURUSD at the time of your trade was moving sideways and indecisive (at least on the H4).
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  4. #4
    Moderator Kolyo's Avatar
    Quote Originally Posted by Kolyo View Post
    Hi victrader,

    You probably know that volume indicator on Forex instruments indicates not real traded volume, because it is unknown, but the tick volume which is the number of ticks counted on the inter-bank market. We believe that the number of this ticks is proportional to the real volume, but this is only approximate. The tick volume mean the number of ticks up or ticks down on the given instrument. I am not 100% sure but I think the red color is for bars which include more down ticks than up ticks, and the green color in opposite to more upticks than down ticks inside the given bar. That's what I believe is the reason you see a green volume on down bars, it is just because there are less down ticks and more upticks, despite the down ticks are larger in size.

    It was my mistake with the interpretation. Here is the correct one from mt5 community - Bars of the indicator have two colors. The green color means that the volume of the current bar is larger than that of the previous one. The red color means that the volume of the current bar is smaller than the volume of the previous bar.
    "The goal of a successful trader is to make the best trades. Money is secondary." - Alexander Elder

  5. #5
    Legendry Member milos's Avatar
    I'm not sure does it reliable trading indicator? The green line means value up while the red means value down.

    Click image for larger version. 

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  6. #6
    Active Member victrader's Avatar
    That will teach me for not being clear, Okane. I didn't trade that - I just used that as a good example of my volume query. I was trading on the M5 chart and it looked much better for a trade on there..

    Good point about the volume not showing the future though. I had in mind that the volume, or ticks, showed orders as they came in. I know better now. I know indicators are lagging, and I wasn't even looking at the RSI. Thought I would use the Stochastic for a bit of confirmation. But in reality what confirmation can it give?

    I won't be using indicators. Many of you talk about naked charting - that's how I am starting off. No wasting time with indicators. I know, in my bones, that everything is in the PA. And I am slowly but surely finding it. I am spending on average three hours a day looking at PA - candles dancing, price jumping up and down. Madness - but there's method in it. Cycles.

    Even though the market's not normal right now I'm learning price action, and the market's the market whatever mood it's in. I'm making £1 trades and I'm breaking even. I have read a massive amount on the BOTS forum, and many things resonate with me as an individual. One of them is that trading with real money is different to trading demo. While I'm breaking even I can keep trading money - until I start to make profit.

    Thanks for taking time to help me out. Hope you'll keep doing that
    Last edited by victrader; 12-30-2016 at 06:31 PM. Reason: Added something about indicators

  7. #7
    Active Member victrader's Avatar
    Thanks, Kolyo, that makes complete sense now. I had that completely wrong. Thanks again

  8. #8
    Legendry Member Okane's Avatar
    Quote Originally Posted by victrader View Post
    That will teach me for not being clear, Okane. I didn't trade that - I just used that as a good example of my volume query. I was trading on the M5 chart and it looked much better for a trade on there..

    Good point about the volume not showing the future though. I had in mind that the volume, or ticks, showed orders as they came in. I know better now. I know indicators are lagging, and I wasn't even looking at the RSI. Thought I would use the Stochastic for a bit of confirmation. But in reality what confirmation can it give?

    I won't be using indicators. Many of you talk about naked charting - that's how I am starting off. No wasting time with indicators. I know, in my bones, that everything is in the PA. And I am slowly but surely finding it. I am spending on average three hours a day looking at PA - candles dancing, price jumping up and down. Madness - but there's method in it. Cycles.

    Even though the market's not normal right now I'm learning price action, and the market's the market whatever mood it's in. I'm making £1 trades and I'm breaking even. I have read a massive amount on the BOTS forum, and many things resonate with me as an individual. One of them is that trading with real money is different to trading demo. While I'm breaking even I can keep trading money - until I start to make profit.

    Thanks for taking time to help me out. Hope you'll keep doing that
    Don't get me wrong, the indicators are usually not the problem. The problem is that people use them with no knowledge.
    I have mentioned this in some other thread probably but you have to remember that these indicators
    were oftentimes created by extremely bright and educated people and it took them many years to create the tool - (as you can find out in our indicator/tool reviews)
    Then comes a newbie, picks up 3 indicators and expects to hit 80% win rate with no market knowledge and that's when things don't work out.
    Then people usually blame the indicator instead of their own lack of knowledge. I usually say: First learn how to read the price without indicators!
    Second, learn how the indicator works. Third: put it all together
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  9. #9
    Active Member victrader's Avatar
    Totally understood, Okane. I proved your first point by using the tick/volume indie to make a trade with no idea what it actually represented. So a good lesson learned.

    Great advice - learn price - learn indicators - put them together.

    Thanks.

  10. #10
    Legendry Member willyw's Avatar
    As Okane mention learn how the indicators work, find out the weakness and strength and backtest it. Every indicator has their usages

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