Thread by @ininvestor

Why Volume Matters when Trading FX?
There is a myth out there that suggests that volume in fx markets does not exist and furthermore if it did, it cannot be calculated. The reason for this explanation is as below:

#forex #fx #forextrader #forexmoney
independentinvestor.com/forex/how-curr…

Stocks and Futures are traded on a centralized exchange, therefore each trade that goes through is recorded and therefore is readily available, making it very easy for a trader to view the volumes on any given day.

independentinvestor.com/forex/strategi…

In fx however, there is no actual centralized exchange, rather fx is traded through an inter bank system, thus making it very difficult to see what the volume is and where it may be coming from.

What people do not tell you is that, put very simply, volume can give you an edge, and an edge is what you need when trading against the professionals.

In fact without going into much detail, it can be proven that through the study of some useful charts, it can be clearly shown that there is a correlation between tick volume, used in the fx spot markets versus actual traded volume in the fx futures markets.

FX markets are trending ones, which means the probability of a market continuing in a certain direction are higher than those of ranging markets. This means if you apply certain indicators in conjunction with high volume, you increase your chances of trading with the flow.

There are plenty of volume oscillators to choose from and there are many articles that cover the topic online. Always bear in mind the time of day you are trading. The simple rule has always been that the highest volume occurs on the open and close of most major markets

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