I had a question come in overnight regarding volume data and how it can be used for forex in terms of the price distribution methodology I use and teach. The question was:
In connection with your price distribution course, how do you find the volume figures needed for this type of analysis in forex?
I hear some use the futures as proxy but dont COT reports only come once a week?
Of course in forex trading volume is always an issue since there is no one aggregate source for spot trading figures. Futures volume can be employed as a proxy so long as you understand the limitations and can make the price level adjustments to make sure you’ve got the correct reference points. That volume will be available in any commonly available futures price feed service just as it would be for the S&P futures or gold or oil.
As for COT (Commitment of Traders), that won’t help you at all in this regard. As I’ve written before (Commitment of Traders – A Weekly Report Worth Viewing and Do you use the Commitment of Traders report to trade?), it’s got some potentially useful info for the wider perspective, but it won’t help you on a day-to-day basis.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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- Do you use the Commitment of Traders report to trade?
I have access to forex volume data!
