Charting software usually offers an option known as “candle volume”, a topic we haven’t discussed so far. You can see a histogram appear with the keyboard shortcuts CTRL+L in the software MT4. The popup will usually come at the bottom of the screen.
I have already told you about the two types of markets – centralized and decentralized. As you may know by now, the stock market is centralized in nature. This means that the market volume can be easily measured with precision.
In centralized markets, trade volume data comprises of two things – bull volume and bear volume.
However, when it comes to decentralized markets such a the Forex Market, precise measurement of volume is not possible due to the massive amount of transactions that place all over the world across various networks.
By now, you must be wondering that how is the volume data appearing on your charting platform.
The volume that is displayed on your charting software is known as “tick volume”. Suppose, when the market price of a currency changes value, it is known as the “tick”. We say a transaction has occurred if the price has gone up or down.
However, the system is not full-proof. The tick volume does not reveal the actual size of the transaction that took place. We have no way of knowing how big the transaction or if more than one transaction took place close to each other to make the market price tick.
Thus you can see that the tick volume although a useful technology, cannot be compared to the precise information that is revealed by stock market volume data.
To sum up, for Forex volume, we look for how many times the candle ticked during the span of time it was open. However, I do not use Forex volume with our technical Bank Manipulation analysis.
Why Should You Consider Switching to Japanese candlesticks?
- The fundamental data revealed by Japanese candlesticks and bar chart are basically the same. However, the Japanese candlesticks display the data is more attractive and readable format.
- They make the interpretation of the data a lot more convenient.
- The signals that you get in bar charts can easily be applied to Japanese charts directly.
- Japanese Candlesticks have an upper hand for the fact that they can show the supply and demand for the currency or commodity in each candle body.
In the next chapter I will tell you how you can use some of the classic Japanese candlestick patterns with the Bank Manipulation Technique to expect some profitable returns.