Most traders are familiar with technical and fundamental analysis. There are several ways to use these maths meaning of volume in forex methods to analyse the forex market, but, in general, fundamental analysis examines the mathematical meaning of volume in forex that the market moves and technical analysis tries to find out when the movement will occur.
There is a third approach for analysing stock market prices and forex prices. VSA is an improvement upon the teachings of Richard D. Wyckoff, who began stock trading in 1888 at the age of 15. In the 1910s, Wyckoff published his weekly forecasts which were read by over 200,000 subscribers. His mail-order courses are still available today. Moreover, the Wyckoff method is offered as part of the curriculum at Golden Gate University in San Francisco. Wyckoff was at odds with market analysts whose trading was based on chart formations.
VSA can be used in all markets and with different timeframes, the trader just needs a volume histogram in his price charts. This page has been archived and is no longer updated. Find out more about page archiving. The volume of a shape is a measure of all of its 3d space. Simple formulas can help you find a shape’s volume.
The BBC is not responsible for the content of external sites. Volume is the measure of the amount of space inside of a solid figure, like a cube, ball, cylinder or pyramid. It’s units are always “cubic”, that is, the number of little element cubes that fit inside the figure. This means that it would take 288 little 1-inch cubes to fill the shoe box. You’ve probably come across these terms already during your investigation into currency trading. It is important to get a good grasp of these concepts before we go any further and explore the math associated with them.
These concepts set the stage for knowledgeable Forex analysis and trading. The Pip Exposed As discussed in previous library articles, a pip is the smallest price change a given exchange rate can make. Your profits and losses can be calculated in terms of how many pips you gained or loss. A pip is derived by comparing the starting rate to the ending rate. The difference between the two is how many pips you gained or lost. Pip Examples Each currency has its own value which is usually expressed in relationship to another currency. Let’s take a look at several of the main currencies to gain a better understanding of how a pip is calculated.
We will express these examples where the USD is quoted first in order to express the value of the pip in terms of U. Well, in the following discussions about lots and leverage you will see how pips can add up quickly. Pip Exceptions There’s one little wrinkle in our pip calculations. What happens when the exchange rate of a currency pair is not expressed to four decimal places? While, this doesn’t happen too frequently there is one notable occurrence which is when the Japanese Yen or JPY is part of the currency pair. JPY pair with an exchange rate of 123. That seems like a whole bunch of work to calculate such small value.
How can I ever make any money in Forex trading with these worthless pips? The answer can be explained by discussing the Forex term of a lot. Spot Forex is traded in lots or groups. 10,000 is considered a mini lot size. 100,000 you will be able to purchase a standard lot size from a broker.