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In addition, there are discrepancies 'in the direction' of the bar and its tick volume.
There is a built-in standard Volumes indicator. I did not know much about it, but my understanding is that if it is green, on the corresponding formed bar the amount of ticks up exceeds the amount of ticks down, and if it is red, on the formed bar the amount of ticks down exceeds the amount of ticks up. Correct me if I am wrong.
For example, yesterday 06.04.11 on GU at 11-30 (GMT) we could see the situation, when a fully bearish bar (marked with a red arrow) "diverged" from its tick volume. That is, when the pound fell at 11-30 in 1 minute by 60 old pips, its tick volume was "bullish".
Each new column has a different colour, relative to the previous column - if the volume is higher than on the previous one, then one colour, if lower, then another.
That is, the sign of the candle and the colour are unrelated. So there is no discrepancy
Each new column has a different colour, relative to the previous column - if the volume is higher than on the previous one, then one colour, if lower, then another.
That is, candlestick sign and colour are not related. So, there are no discrepancies
Yes, then I agree. There is no discrepancy.
The tick volum is an indicator of volatility, not the volume of trades made.
Price volatility? Not necessarily.
Rather, it is an indicator of the activity of market participants.
Price volatility? Not necessarily.
Rather, it is an indicator of the activity of market participants.
It also does not have to be)))))) It is the amount of price changes by a forex broker or liquidity provider. Of course, it is also related to the activity of its clients, such as the number of trades they make per unit time or volume. But this dependency is not necessarily always the same and linear. It depends on the strategy of quotes provider, when and how often the prices should be changed. Every provider has an algorithm of how to form its prices and how often it changes prices. It depends on the supplier - or more precisely on his algorithm.
Price volatility? Not necessarily.
Rather, it is an indicator of the activity of market participants.
Or the activity of the DC tick generator...
It depends on the quotation provider's strategy of when and how often to change prices. Each supplier has an algorithm for forming their prices and how often. It depends on the supplier - or rather on his algorithm.
Can you elaborate on that?
I thought that the supplier (a bank, for example) simply broadcasts his deals, perhaps only the prices without the actual volumes. And here it turns out that the provider can "create his own prices based on his algorithm". Please explain.
Can you be more specific about that?
I thought that the supplier (bank for example), just broadcasts their executed transactions, maybe only prices without real volumes. And here it turns out that the supplier can "form their prices based on their algorithm". Please explain.
The liquidity provider holds the spread, i.e. both buy and sell - roughly like a DC. During one tick his clients pour in both buy and sell (although on some platforms clients or other banks can place their orders within his spread), which causes his aggregate position on that instrument to change. He is fed up with buying or selling at these prices, so he changes them. And a lot of deals could have happened during this time, on the interbank market, as well as on other exchanges. Therefore, he is not translating his deals, but his quotations from one market to another. Although no one is stopping them from keeping different bids and asks on different venues. It's just like in normal exchanges.
P.S. Even if market maker receives more clients selling than buying, he may increase his quotes - no one forbids it. I.e. there is no such pricing as on the exchange for example. If he is the most influential, then smaller banks (or those not specialising in that currency) are more likely to change their quotations behind him than to compete. But then again that's their own business :)
The liquidity provider holds the spread, i.e. buying and selling at the same time - roughly like a DC.
The DCs may "hold" the spread, as 95% of the DCs are not linked to the real market. But it is very questionable to "hold the spread" for Currenax or EBS.
... Tired of buying or selling at these prices, he changes them.
Changing prices? :) By himself? Why would he do that? And the arbitrageurs for what? More like a fairy tale. :)
I see the only real way to "change prices" to the liquidity provider as taking part in the buy-sell yourself. That's how a specialist on the NYSE works on every stock, for example.
... . Although no one prevents to keep different Bids and Asks on different sites. Everything is like in usual exchangers.
That is what arbitrageurs do.
By the way, in exchangers (where clients are not market makers, by the way), it is also extremely rare situation where you can make a profit by speculating on exchange rates.
P.S. Even if market makers have clients who sell more than they buy, they can increase their quotes - no one forbids that.
It follows that the price is not determined by supply and demand and the basic law of the market does not work in forex.
Geez. :)
It is possible for a DC to "hold" the spread, as 95% of the DCs are not linked to the real market. But it is highly doubtful that Currenax or EBS will "hold the spread".
Of course they cannot keep the spread - it is formed there like on the stock. But each of them has a number of banks - liquidity providers through which a significant part of turnover passes. Although clients may not see them, become providers themselves, etc.
Changing prices? :) By himself? Why on earth? What do arbitrageurs do? More like a fairy tale. :)
of course there are arbitrators. The only question is who to arbitrage with)))) If for example Deutsche Bank will increase its quotations for eur on all platforms and other banks will see it and play against (give lower quotations), then as a result of arbitrage between banks either DB will decrease its quotations to Bank of Moscow))), or the latter will increase quotations to the level of DB. So it is a question of who has more liquidity. It's not that DB wants to cheat everyone, but a simple need to buy a large volume of eu against the quid, for example.
It follows that the price is not determined by supply and demand and the basic law of the market does not work in forex.
Hilarious. :)
of course there are arbitrators. The only question is who to arbitrage with)))) If, for example, Deutsche Bank will increase its quotations for eur on all platforms and other banks will see it and play against it (give lower quotations), then as a result of arbitrage between banks either DB will reduce its quotations to Bank of Moscow))), or the latter will increase quotations to the level of DB. So it is a question of who has more liquidity. It's not that DB wants to cheat everyone, it's a simple necessity to buy a large volume of eur against the quid for example.
What do quotes have to do with it? The quotes (price) are secondary. Bids (limit and stop orders) are primary in the market. They are the ones that move the market. And it requires considerable material resources in times of high liquidity. In a thin market, it is cheaper to move the price. As proof of the high costs of price shifts, I can find the volumes that the BOJ (Central Bank of Japan) trawls during currency interventions. And you say "someone wanted to change the price". In order to do that, a huge number of REAL bids from market participants standing in the way of a shift must be executed.
So it's a question of who has more liquidity. It's not that DB wants to cheat everyone, but in a simple necessity to buy a large volume of Euroland against the quid, for example.
Banks are not fighting each other, why should they? :) A bank must (by order of its client) conduct a currency exchange operation, and they do it. They carry it out with the one who is more profitable at the moment. Why do they have to fight and find out who has more liquidity? Their goals and objectives are different.
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OK, this is all theory and has little to do with our work.