Understanding Definition of Volume

To add comments, please log in or register
Nesimeye Oswald
104543
Nesimeye Oswald  
Was trying to work on something and I was stuck because I couldn't really understand what volume on Mt4 platform truly represent . Don't get me wrong, I know volume represents the average trade activities for a particular period of time . But my question, does volume simply represent the number of investors for that period or does it represent the number of investments/trades. To expansiate more, sometimes big players move the market in a direction and inexperienced trades jump into the move thinking it's a new trend , so if volume represents just the number of investors , then it will be easier to spot the divergence between volume and price when the number of investors is not on par with the price spike . But in this scenario if the volume is representing number of investments or trades opened  then it will be harder to spot the false moves by big players  from volume divergence . I hope I made sense with the explanation, would appreciate any help on this .
Sergey Golubev
Moderator
106680
Sergey Golubev  

I found the video but it is volume in general  - 

----------------

Volume and Open Interest

This module is about Volume and Open Interest. When we're trading we look at the price action but we also look at the volume of trading and the open interest which is something we come across in futures and options.


Nesimeye Oswald
104543
Nesimeye Oswald  
Sergey Golubev:

I found the video but it is volume in general  - 

----------------

Volume and Open Interest


OK thanks 
Enrique Dangeroux
433
Enrique Dangeroux  
Nesimeye Oswald:
Was trying to work on something and I was stuck because I couldn't really understand what volume on Mt4 platform truly represent . Don't get me wrong, I know volume represents the average trade activities for a particular period of time . But my question, does volume simply represent the number of investors for that period or does it represent the number of investments/trades. To expansiate more, sometimes big players move the market in a direction and inexperienced trades jump into the move thinking it's a new trend , so if volume represents just the number of investors , then it will be easier to spot the divergence between volume and price when the number of investors is not on par with the price spike . But in this scenario if the volume is representing number of investments or trades opened  then it will be harder to spot the false moves by big players  from volume divergence . I hope I made sense with the explanation, would appreciate any help on this .

Not sure what is not to be understood. In MT4, volume represents tick volume https://docs.mql4.com/predefined/volume .

IMO pretty useless. The only useful thing i can think of to use tick volume is to measure the difference between brokers, because it shows the tick volume only from broker, not the market as whole (impossible, decentralized market). 

In MT5 it also represents tick volumes for forex. It can show traded volume on other non-forex assets.

Alain Verleyen
36570
Alain Verleyen  
Sergey Golubev:

I found the video but it is volume in general  - 

----------------

Volume and Open Interest


Off-topic answer, as the question is about MT4 volume, which is only tick volume (number of ticks or change in price in a given period). It's not related to (trading) volume and open interest.
Nesimeye Oswald
104543
Nesimeye Oswald  
Enrique Dangeroux:

Not sure what is not to be understood. In MT4, volume represents tick volume https://docs.mql4.com/predefined/volume .

IMO pretty useless. The only useful thing i can think of to use tick volume is to measure the difference between brokers, because it shows the tick volume only from broker, not the market as whole (impossible, decentralized market). 

In MT5 it also represents tick volumes for forex. It can show traded volume on other non-forex assets.


Thank you very much , that was totally helpful
Anthony Garot
1942
Anthony Garot  

Enrique Dangeroux:

The only useful thing i can think of to use tick volume is to measure the difference between brokers

That's an interesting thought.
Marco vd Heijden
Moderator
8413
Marco vd Heijden  
Anthony Garot:
That's an interesting thought.

You can also identify the hottest instruments.

Who wants to trade a dead instrument that is barely ticking at all ?

The factors involved are quite large.

But i also agree it could be used to analyze data between brokers.

Nesimeye Oswald
104543
Nesimeye Oswald  
But one question I haven't figured out is, ' What is a tick ?' . Does a tick represent a new transaction ?
Anthony Garot
1942
Anthony Garot  
Nesimeye Oswald:
But one question I haven't figured out is, ' What is a tick ?' . Does a tick represent a new transaction ?

A tick in spot ForEx is just a single price change.

When you think in terms of matching a buyer with a seller, transactions, contracts, etc. — that's related to futures.

Supposedly you can trade futures with MT, but I haven't tried that.

Anthony Garot
1942
Anthony Garot  
Marco vd Heijden:

You can also identify the hottest instruments.

Who wants to trade a dead instrument that is barely ticking at all ?

This is the best use for tick volume I have seen thus far. I will give this further consideration. Thanks for the tip.

12
To add comments, please log in or register