Unlike the stock and exchange markets, currency markets deal with trillions of dollars every day. Someone can think of the huge chains of data that is produced each day from each of the currency pairs. If you are a scalper, for example, you may want to look into hourly data or even that for every 15 minutes or lower. On being asked what is Forex volume data, it refers to technical price fluctuation data for every unit time. It helps in determining the gradual growth or fall in relative prices which traders utilize for understanding potential trading prospects.
Obtaining volume data Forex:
Most of the forex brokers offer chunks of data stream which report the proportion of world market volume. What is important is the meaningfulness and measure of total volume. The Volume indicator is an indication that sellers and buyers can utilize the currency fluctuation dynamics and that might be your turning point.
In short, it is impossible to predict the entirety of currency volume all at one go. The volume of currency trading enterprise will help you further in determining a precise approximate. Speculation on the range of volume of currencies also plays a major role.
Tick volume indicator:
Markets do not always move in a specific pathway. Market activity does not remain stagnant all throughout. As a matter of fact, tick volume indicator almost matches the real volume. Experts sometimes despise following buy/sell with fluctuations in volume.
However, volume data Fx indicator measures the volume of currencies of their clients as a sample out of the entire trading population.
When a newbie faces the question, what is forex volume data, he/she probably means to ask the strategies that he/she can put to use. Volume indicator aids trading in sizing the market and understanding its range. To put more focus on market volume, traders often use pivot points from where trade takes a turn.
Understanding relevance of tick volume indicator:
For this one needs to know the exact functioning of volume strategies and indicators. Firstly one should identify a pivot point and analyses its volume using certain tools. It is succeeded by comparing the volume at two or more pivot points. Then you can analyze the price action on each of the pivot points within a certain time period.
After making an estimate of price and volume data, one can successfully enter a trade. With experience, one learns how to successfully make an approximation. Although usage of this data hardly satisfies your needs of identifying market movements, it surely provides a fairly good estimate. It resembles a sample out of the whole volume data. Often brokers use data from hedge funds and brokers.
Does volume confirm price?
Currency price movements help determine market movements but not detect its significance. Unless there are market actions which aid in market reversals, volume trading helps traders understand liquidity, transaction costs and portfolio risk. In short, other methods to detect strategies are rather complex. Next time your fellow traders ask you what is forex volume data, make sure your solution touches currency futures and transaction limits.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.