Building an ATS - Logbook

Discussion in 'Automated Trading' started by tiagor, Dec 5, 2012.

  1. Do you use volume in FOREX trading?
     
    #101     Dec 18, 2012
  2. What is volume in forex trading?
     
    #102     Dec 18, 2012
  3. Bid, ask, or execution volume.
     
    #103     Dec 18, 2012
  4. probably not seeing the whole market.
     
    #104     Dec 18, 2012
  5. Definitely not seeing the whole market, hence is volume useful at all to gauge where the market is going?
     
    #105     Dec 18, 2012
  6. I think you've answered your own question, but maybe backtest it.
     
    #106     Dec 18, 2012
  7. Right about backtest, thanks for contributing.
     
    #107     Dec 18, 2012
  8. tiagor

    tiagor

    I do use tick volume in FOREX. You will definitely not be seeing the whole market but I find it useful nonetheless to work out patterns of distribution/accumulation through relative volume analysis.
    Some might disagree so just work with what’s useful to you.
     
    #108     Dec 19, 2012
  9. Have you thought of subscribing to tick data from another broker (maybe a prime broker) that shows the volume traded by big banks/market makers? That would be a better estimate of where the whole market is going than getting volume from MBT. I am considering of going that route. There is website www.truefx.com by Integral (Integral is a large ECN) that provides free bid/ask real time quotes but, unfortunately, not last traded price/volume.
     
    #109     Dec 19, 2012
  10. tiagor

    tiagor

    From their site, "MB Trading FX receives quotes from multiple banks, partners, and pools of liquidity". That being said, volume in Forex is not a transaction count. There is no time and sales data, just tick movement, which in MBT comes from their ECN connections.
    I remember reading somewhere that there is a positive correlation between tick volume to real volume, which was verified on instruments where both data can be collected. Since I am only interested in relative volume over time, it is of no real consequence that I'm using tick movement instead of real transaction volume (which would be impossible to have in FX anyway).
    In summary, you'll get slightly different tick volume from different providers but high tick volume and low tick volume should be clearly identifiable and reasonably correlated on any ECN broker.
     
    #110     Dec 19, 2012