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Volume on forex chart,fx trade news,foreign rate exchange converter - Tips For You>

FXCM, parent company of DailyFX, has made it possible for users to see live FX volume figures on their currency charts.
Put simply, the ability to study volume adds an extra dimension of insight into trading crowd psychology and allows us to see detail which was previously invisible to the trader.
Unlike in centrally-traded and cleared markets such as Equities and Futures, forex trading does not trade in any single exchange. Source: FXCM Trading Station Desktop, FXCM Real Volume and Transactions Indicator, Prepared by David Rodriguez. The past several times we’ve seen Euro volume spike above $5 billion in one day have coincided with important Euro turnarounds, and indeed the indicator helped confirm a recent EURUSD reversal following the post-ECB tumble. If Real Volume is very high while Transactions are relatively low, it suggests that larger traders are the most active participants in a big move. Watching Volume and Transactions data can prove an invaluable resource—particularly as these indicators are available on even 1-minute FX trading charts. This is by no means an exhaustive look at using the Real Volume and Transactions data on our charts but is designed to show instances in which using the figures could have helped us in our trading decisions.
Volume and Transactions data add color to our charts—both literally and figuratively.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM. The Forex, short for Foreign Exchange (forex market) is the market where currencies from all over the world are traded against each other in the form of pairs. The Forex, or Foreign exchange market, is i said before the market where currencies are quoted againt other currencies. Volume is a measure of how much of a given financial asset has been traded in a given period of time. For every buyer there needs to be someone who sold them the shares they bought, just as there must be a buyer in order for a seller to get rid of his or her shares. Basic Guidelines for Using VolumeWhen analyzing volume, there are guidelines we can use to determine the strength or weakness of a move. Volume and Price ReversalsAfter a long price move higher or lower, if price begins to range with little price movement and heavy volume, often it indicates a reversal. Volume IndicatorsVolume indicators are mathematical formulas that are visually represented in most commonly used charting platforms. Chaikin Money FlowRising prices should be accompanied by rising volume, so this formula focuses on expanding volume when prices finish in their upper or lower portion of their daily range and then provides value for the corresponding strength. Chaikin money flow can be used as a short term indicator because it oscillates, but it is more commonly used for seeing divergence. Klinger Volume OscillatorFluctuation above and below the zero line can be used to aid other trading signals. That means that there is likewise no single place for volume data, and as such we have historically been unable to use important volume indicators on our FX charts.


This battle between buyers and sellers for the best price on all different timeframes creates movement while longer term technical and fundamental factors play out. As traders, we are more inclined to join strong moves and take no part in moves that show weakness - or we may even watch for an entry in the opposite direction of a weak move. These are generally sharp moves in price combined with a sharp increase in volume, which signal the potential end of a trend.
For example, imagine volume increases on a price decline and then price moves higher, followed by a move back lower.
False BreakoutsOn the initial breakout from a range or other chart pattern, a rise in volume indicates strength in the move. Each indicator uses a slightly different formula and, therefore, a trader should find the indicator that works best for their particular market approach. Starting from an arbitrary number, volume is added when the market finishes higher, or volume is subtracted when the market finishes lower. When closes are in the upper portion of the range and volume is expanding, the values will be high; when closes are in the lower portion of the range, values will be negative.
Figure 6 shows how volume was not confirming the continual lower lows (price) in AAPL stock. The Klinger volume oscillator sums the accumulation (buying) and distribution (selling) volumes for a given time period. It reported total customer volume worth $448 billion in May, 2014 and an average of $20.4 billion daily. DailyFX Analysts have posted updates of major volume spikes at potentially significant market turning points, and indeed we feel this is one of the most effective ways to use this important technical indicator. And though a sharp spike in volume hardly guarantees that price will reverse, it does suggest that traders find price has hit an important turning point. I invite you to consult advices on How to suceed on FOREX in order not to make as the majority of the particular who come to the Forex believing they know everything, being sure to  make money, and finally to get it wrong.
Volume information can be found just about anywhere, but few traders or investors know how to use it to increase their profits and minimize risk. Using volume to analyze stocks (or any financial asset) can bolster profits and also reduce risk. Increasing price and decreasing volume show lack of interest and this is a warning of a potential reversal.
If price on the move back lower stays higher than the previous low, and volume is diminished on second decline, then this is usually interpreted as a bullish sign. Little change in volume or declining volume on a breakout indicates lack of interest and a higher probability for a false breakout. And though this represents a tiny fraction of the $5.3 trillion in daily FX turnover reported by the Bank of International Settlements as of October, 2013, it captures a non-negligible share of both retail and institutional FX volume.
The Forex is open since few years to individuals, single investors wishing to diversify their investments or pure speculators.


This can be hard to wrap your mind around, but the simple fact is that a price drop (or rise) on little volume is not a strong signal.
At a market bottom, falling prices eventually force out large numbers of traders, resulting in volatility and increased volume. There are many volume indicators; the following will provide a sampling of how several can be used.
It can also show divergences, such as when a price rises but volume is increasing at a slower rate or even beginning to fall.
The exchange rate thus changes constantly based on supply and demand of a particular currency. Indeed, when no news comes out, the market will most likely follow his trend (this is why the Forex is also known as market trend), forming very often beautiful charts patterns. A price drop (or rise) on large volume is a stronger signal that something in the stock has fundamentally changed. We will see a decrease in volume after the spike in these situations, but how volume continues to play out over the next days, weeks and months can be analyzed by using the other volume guidelines. The most found pattern on the Forex is the channel (bullish or bearish), because there is mostly a trend, marked by corrections. In times of economic crisis, of course, the market loses its trend and it becomes more difficult to trade on the Forex.The Forex is not a really a volatile market. The exchange then moved only if a state decides to devalue or revalue its currency by acting with its foreign exchange reserves.
That's what happened in 1992, which was a major turning point for the foreign exchange market.George Soros, seeing that the price of sterling was too high, decided to shorts it for $ 10 billion. The Bank of England not having enough foreign reserves to maintain its fixed exchange rate was forced to devalue its currency.
Other currencies have also been attacked in the following years prompting the authorities to move on floating exchange rates, system that we know today.The price of a currency on the Forex is now a balance between supply and demand of various stakeholders for a particular currency.
However, brokers do not allow you to trade the weekend (because of the low volatility), while the market remains wide open for central banks, commercial banks or hedge funds that are key investors on the Forex. Thus, many gaps appear at the opening of the market on Sunday evening.The Forex market is highly liquid. The daily volume is today of 3.981 billion dollars, making it the second largest market behind the interest rate (8000 billions).



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29.12.2014 | Author: admin



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