₦airaland Forum

Good evening everyone, let me take out time to explain what I mean when I say that the volume data your broker gives is not readily usable because it has both buy and sell volume.

Imagine that you are a Skrill EXCHANGER people come to sell their Skrill to you while some others come to buy Skrill from you. The FX market or stock market is also an EXCHANGE(R).

Now, see the following transactions done by a particular Skrill EXCHANGER for February 17, 2023.
(1) Client SOLD $1,000 worth of Skrill to the exchanger.
(2) Client bought $2000 worth of Skrill from the exchanger.
(3) Client bought $1,500 worth of Skrill from exchanger
(4) Client sold $500 worth if Skrill to the exchanger.
End of business for that day.

Now tell me the volume (in $) of transactions done for that day.

tenpipsperday:
Please house how do I fund my mff? Chipper cash is rejecting my NIN. Who can help me with idea? Fluterwave is off

Pay through Binance

meshpips:
Let me give a simple (but extreme) example of the importance of volume (or quantity traded).

I bought 100 units of share XYZ at $30 per unit

Then added an extra 1,000 units at $100 per share.

How much is the AVERAGE cost per unit ?

Now see the same question if I discard volume (quantity).

I bought share XYZ at $30 then again at $100. How much is my average cost per share?

Work out the answer and let's talk a bit more.

So we had 100 shares at $30 per share
This will cost 100 * $30 = $3,000

The second purchase was 1,000 shares at $100 per share.

This will cost 1,000 * $100 = $100,000

Total cost = $3,000 + $100,000 = $103,000

While total units = 100 + 1,000 = 1,100

So we bought 1,1000 unit (shares) with $103,000

Therefore the cost per unit is $103,000/1,100

= $93.636 per share

Approximately $93.64 per share as correctly written by @piptocoin.


For the average cost without volume,

It is simply ($30 + $100)/2

= $130/2

= $65 per share

I hope we can see the difference in result just because we added volume (quantity traded).

Everything you do on your chart is usually price and time. Once you introduce volume, there is a greater level of precision.

Since the larger quantity was bought around $100, it is only logical for us to expect the average price to be closer to $100 than it will be to $30.

This is kinda similar to the VPOC (volume point of control ) used by market profile analysts

Piptocoin:
[color=indigo]Yes, you are absolutely right. I miscalculated (in my haste) and used 10,000 units rather than 100,000 units. The average figure is $93.64¢. An error on my part for the first question.[/color]

Thanks for this. I think you now have the correct answer but let's go through it line by line so that everyone can understand how you arrived at your answer

BrightFuture48:
Answer #1 = $99.86
Answer #2 = $65

The difference is occasionned however to more data provided in question #1. As in any form problem, the more data you have, the better the outcome, It not necessarily have to be volume.

The volume of any security is more accurately use in equity/ stock trading than forex because you easily get aggregate volume of buyers and sellers at the exchange. But in case of fx is a bit difficult because volume you're checking is only reflecting the broker you're using.

Commitment of Traders report COT is closet thing to get a glimpse of volumes being traded in fx mkt, but then this can only be used for long term trading not otherwise.

Thanks so much for participating sir!
Your answer seems to be the most accurate of the 3 people that responded.
Thanks for going into extra detail.

Piptocoin:
[color=indigo]The average cost per unit is $11.81¢ or approximately $12.

The average cost per unit for the second one is $65.[/color]

First let me thank you for attempting to answer the question.

Kindly notice that the upper and lower extremes are $100 and $30 respectively. The average will not be higher than $100 neither will it be lower than $30.

Of necessity, it will reside between the values that bound it.

EASYLIFE4US:
X1=30÷100
=0.3
X2=100÷1000
= 0.1
Av=( 0.3 + 0.1)÷2
= 0.2

It is 100 units at $30 per unit.
The calculation you put up is not quite correct sir.
Also note that there are 2 scenarios.
So I expect to see the answer for the first part that includes the quantity traded and a different answer for the second part that only told us the price at which he bought without including quantity.

Thanks for making an attempt.
You rock!

meshpips:
Let me give a simple (but extreme) example of the importance of volume (or quantity traded).

I bought 100 units of share XYZ at $30 per unit

Then added an extra 1,000 units at $100 per share.

How much is the AVERAGE cost per unit ?

Now see the same question if I discard volume (quantity).

I bought share XYZ at $30 then again at $100. How much is my average cost per share?

Work out the answer and let's talk a bit more.

Here is the question. Let's get the answer in the two scenarios and then we will see whether they are same (which will make volume useless).

If they are different, why is it so?

HumbleTrader:
I made use of volume when I initially started trading, I don't need it anymore.

Let's just agree to disagree.

Kindly answer the question I posted about the average cost of the hypothetical XYZ shares

You will be further enlightened after you do.

Anyone else can answer the question so that we all can learn on this thread.

Or someone might be able to correct me if I am wrong with the things that I am saying.

Let's just answer that question first and then see the difference then we will discuss further.

It is weekend that is why I have time on my hands. I can't guarantee responding once the market opens.

Let's take advantage of this opportunity to have an intelligent exchange of ideas.

Thanks everyone!

Eagba:
No vex o, is us30 an index of an American stock exchange like the sp does? And if one will have to trade it, does show volume traded or trading?

There are 3 major indices in the US:

US30 is same as the DJIA (Dow Jones Industrial Average)
S&P500
and
NASDAQ (USTech)

Any instrument traded on any exchange shows volume (quantity traded). You can use any Broker's volume data and obtain exactly the same result. The only thing you need to know is that the volume given contains both buy and sell volume. You need to be able to know where the NET volume is before you can do any actual work with the volume data.

dmahn:
VOLUME: THE NEGLECTED ESSENTIALS. Volume is the only reason I add more to losing trade, when you use it and knows how to use it well, it's give a Very Objective view of the market. When I see divergence in volume, Over confidence comes, Price might run ur stop, but finally you ll see the market in the direction its shows you

Don't Stop Learning

Thanks for sharing this article.

I am amazed at the difference in the way of reporting between the NYSE and the LSE (New York Stock Exchange and London Stock Exchange respectively). On the Nigeria Stock Exchange, they record volume traded and number of deals.

Nice article. Thanks again for sharing!

HumbleTrader:
If must use volume, use OBV available on meta trader 5.

But don't rely on volume alone, volume is like heavy breeze blowing that rain wants to fall, but at the end it may not fall.

Let me ask you, do you use volume to make your own trading decisions? If no, you cannot in anyway tell others to use it.

I use volume everyday and have been making the strategy even more robust for the past 6 years out of the 16 years that I have been trading.

Throughout those 16 years I have worked (a 9-5 job) for less than 4 years put together.

You still think I do not know what I am saying?

Note: I put up a question yesterday about the average cost per unit of hypothetical shares bought.

You (or anyone else) have not answered it yet you prefer to keep arguing about what you are completely ignorant about.

Proverbs 25:2

It is the glory of God to conceal a thing: but the honour of kings is to search out a matter.

In the FX market, a lot of things are concealed (veiled or hidden).

Do you believe that you can reign as Kings do? If yes, get to work and start searching until you find the truth.

When searching for a lost bunch of keys, you turn the whole apartment right upside abi? Do the same to everything you have been told and refuse to give up until you find!!!

greatcheer:
please sir mesh can you help me with the link for the mff of 89 dollar

thanks in advance

It is not mff.

Kindly send me a DM

Let me give a simple (but extreme) example of the importance of volume (or quantity traded).

I bought 100 units of share XYZ at $30 per unit

Then added an extra 1,000 units at $100 per share.

How much is the AVERAGE cost per unit ?

Now see the same question if I discard volume (quantity).

I bought share XYZ at $30 then again at $100. How much is my average cost per share?

Work out the answer and let's talk a bit more.

HumbleTrader:
It's not a competition, I have nothing to gain from your success or failure, I'm just trying to help.

1. Stock Exchange market is different from Foreign Exchange.

2. Volume is useless in Foreign Exchange because the volume is based on your broker, different broker, different volume, expect you can gain access to the volume of all the traders on earth you're decieving yourself with that thing on your phone.

4. You do not need a volume Indicators to know the overall direction of the market and that's because.

3. Volume isn't everything, market makers might make you think there's a lot of buy power only for you to buy, and they cancel their order and enter a sell trade, hitting your stop loss as they profit from your bias.

My brother, lower the microphone or just kuku off am.

Sincerely, you are simply ignorant of the truth. I know that you have good intent but you are ignorant.

Please try to learn in silence.

Think am, no insult intended . . .

If a fool keeps mute, he may be considered to be wise but once he speaks, we don confirm say na fool.

Just try to learn in silence okay?

I talked about traders being highly cerebral people (very intelligent people).

1Corinthians 8
[1] Now as touching things offered unto idols, we know that we all have knowledge. Knowledge puffeth up, but charity edifieth.
[2] And if any man think that he knoweth anything, he knoweth nothing yet as he ought to know.

Now see the same verses in the amplified translation

Now about food sacrificed to idols, we know that we all have knowledge [concerning this]. Knowledge [alone] makes [people self-righteously] arrogant, but love [that unselfishly seeks the best for others] builds up and encourages others to grow [in wisdom]. 2 If anyone imagines that he knows and understands anything [of divine matters, without love], he has not yet known as he ought to know.

Once I see a proud trader, I have seen one with whom the market still needs to process even further. Pride needs to leave before you will start achieving anything in this market.

See how humble boss @infofirst is? That is a man that has graduated from the school of hard knocks. A very well refined gentleman.

Real Talk With meshpips part 3

I was privileged to get sponsored to take SMB capital's course in stocks some 10 years ago. A course that was worth about $6,000 as at that time. We learnt a lot. I had been hearing about the "tape" but never really knew what it was. Well after taking the course and in the process of being trained I saw it first hand on the DAS trader (our execution software). Charting was done on TC2000 by Worden brothers.

A part of the DAS trader always showed the VWAP (Volume Weighted Average Price) for the stock being traded at any time. I got curious about VWAP and started studying about it. I broke it down and studied it from first principles like we do in Engineering. I noticed a big error they were making (not exactly an error but something that will greatly reduce the accuracy of VWAP values). They used the typical price (HLC/3) as the average price point for each candle. I could tell that this was a very big mistake. So I went on a journey into using other method to get something which in my opinion will be more accurate. This was how I started my journey into my mathematical technique called VAP (Volume Adjusted Price).

I will be honest with you guys, the logic behind VAP were God-given instructions. Only my wife knows this first hand because she was with me that first night as God (by His Spirit) gave me the instructions on what to do.

Volume as given on metatrader is useless EXCEPT you can distinguish between buy and sell volume in any given period. Every candlestick has buyers and sellers in it. Some are 100% buy or sell. If you don't know how to sort out buy from sell volume in a candle, you won't get proper result when using volume.

Sorting out this buy/sell volume will let you know what the NET (or effective) volume is and aggregating this value as each period passes is the building block of my VAP method. It has been six years since I have been working on the VAP technique and it keeps getting better and more robust with each passing day.

In closing I will say, there exists three (3) variables on the price chart:

1. Price
2. Time
and
3. Volume (or quantity traded)

Price is nothing without volume!!!!

I rest my case.

Alright, let's continue this "real" talk with meshpips.

I tried my hands on just about anything and everything you can think of in this market (maybe with the exception of a very few things). I never studied too much about Elliot Wave, Point and Figure and Renko but just about any other method of technical analysis that you can think of, I have very well grounded and deep knowledge yet the market was still using my white designers shirt to wipe yansh!

One day, I thought to myself 'what if volume is where the answer to the market lies" what if they told us that it is useless because they don't want us to know the truth? My people, professional traders the world over use VWAP (Volume Weighted Average Price). See the bolded? Volume abi? So @humbletrader never even sabi anything yet. He posted a message with good intention but he is very ignorant of the truth.

What about market profile? There is volume profile used by professional traders and it is one of the subject to study in the CME scheme of work. Volume Spread Analysis (VSA) is another method used by many professional traders. Tom William's book "Master The Market" dwells on this extensively. Other volume studies like Ord volume exist.

I was particularly intrigued by VSA (Volume Spread Analysis) because the approach was something I could relate with - a cause and effect relationship. They looked at volume and then the spread or (range = high - low) of the candle. When big volume is seen but a small range/spread they know something is happening just like the converse where there is little volume but the candle's spread/range is wide. May God bless Tom Williams of blessed memory for his work in writing that book.

This is getting rather lengthy. Hmmnnnn . . . let me stop again.

Let's try to re-orient the mind of a few traders in this space that are ready to listen and learn.

It is well known that 90% of traders will lose 90% of their trading capital within 90 trading days.

Why do you think there is such a high rate of failure in this industry? Which profession can we call the most difficult? Now check the failure rate of that profession. Let's talk about Medicine . . . the graduation rate in US schools has a lower band of around 81% (meaning less than 20% fail to graduate in Medical Schools in the US). A screenshot is attached to substantiate this fact.

Now compare 20% failure rate to what we see in the financial markets. I hope we all can clearly see that something is very terribly wrong with the FX industry. I am very aware that people that are not cerebral will not want to come anywhere near the FX market. Most traders I have met are very intelligent people.

It is needless to say that I finished with straight "A"s in secondary school. I finished as the Senior Prefect (Head Boy) in my set. i went on to get a degree in Mechanical Engineering yet the market showed me shege for many years. Our dear @gabsonfx also known as @pipsbasketing is a first class graduate of Engineering. He attempted to trade solely for a living and relocated to Nigeria from Canada. The market showed him shege! I can go on and on with stories of very erudite people that the market has shown shege.

Now think about this . . . if they have been telling us the truth about the market from the start why then do so many people fail? So I went on a journey of doing the reverse of what they instruct us. I turned the trend lines in the opposite way, checked the inverse of price quotes and did all sorts of things to see where the truth could be.

Let me not make this post too lengthy. I will post another shortly on how I started using volume.

HumbleTrader:
Stop using volume Indicators.

Okay sir I have heard your recommendation.

Well, I got on the USDJPY and here is what it is looking like right now.

Talk is cheap. I need traders that can show me real trades.

Maybe you think I have been playing these past 16 years that I have been trading.

Edd1e:
Resent. Check your spam folder incase. Thanks

I have seen it. So sorry.

My spam folder wasn't showing that I had messages there.

I will respond right away.

Edd1e:
Check your Yahoomail bro. Sent u a msg, from thew*****@gmail.com

I greet you sir.

I have checked.

No mail from any such email address.

Kindly resend.

Thank you!

meshpips:
GBPUSD

If you were born between 1992 and 1995 just sell GBPUSD when it reaches your year of birth.

Take profit at 1.1940

Trade safely everyone!

Because you people selling are too young you won't be able to handle price until it gets to 1.1940

So anything from 1.1958 begin remove hand from plate. Una don chop reach.

It's Friday!!!!

GBPUSD

If you were born between 1992 and 1995 just sell GBPUSD when it reaches your year of birth.

Take profit at 1.1940

Trade safely everyone!

Chidexthebest:
check your email

I have responded sir.

dmahn:
Boss why not leave this stupid UJ and look for setup on another pair. The idiot has been stressing my Oga

The true price (VAP or Volume Adjusted Price) is far lower than what we have on the chart.

I expect a massive sell off.

Let's see whether this pair will make my day after doing me plenty shakara.

Can we get a 400 - pip drop today on USDJPY?

REFERENCE: December 20, 2022

We had 691 pips sell off on UJ that day.

Price has tagged the VAP supply of that day. I expect the bears to have a party today.

meshpips:
It seems I am wrong on this one.

You are right.

Let me stop trading for the week.

Markets trying to tease me.
You took out the H1 candle low?
Okay, I will trade you.
Sell it is this time.
Target 133.60
Now please stop being naughty and spit out some good money for me.

nzechu:
sir its a long buy

It seems I am wrong on this one.

You are right.

Let me stop trading for the week.

nzechu:
sir its a long buy

I am sorry, it is absolutely not.

I might be brutally wrong though.

Please re-check your method over all time frames and tell me what you find.

All the best sir!

meshpips:
I will wait for a bit of confirmation before buying at 134.45 because there is one last untested demand level at 133.55 which price might like to visit.
Institutional buyers like to get things real cheap. So it is highly probable that they take price down to 133.55 before the northward journey begins.
Let's see how this will play out!
Thank God it's Friday!!!

So I thoroughly scrutinized the VAP values and found out that the 134.45 level will FAIL to hold.
This sell will continue until 133.5X or slightly lower.
Enjoy the bear hug people!