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Volume Indicator
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Volume Indicator

  #1 (permalink)
Trading for Fun
The Netherlands
 
Futures Experience: Beginner
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Volume Indicator

Volume Indicator

I trade CFD's and when you use a volume indicator from your CFD broker this does NOT reflect the 'real' volume being traded at that specific market? (Am I right? I believe so!)

Hence the question remains, where can I find a volume indicator for the DAX in this case on the 'real' market or future market?

This 'real' volume indicator is a must for trading. And correct me if I am wrong, but having a volume indicator at a CFD broker is utter pointless if it's not from the underlying real market...

Save my day! I'll be looking forward to yar addition!

Regards, fielD of Force!

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  #2 (permalink)
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  #3 (permalink)
Elite Member
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When you trade CFDs via MetaTrader, you probably do not have access to the volume for FDAX, as the volume information supplied does not relate to the underlying market.

You cannot create that volume information, in case that your broker does not supply it.


Possible Workaround

For cumulated volume indicators there is a way of approximating volume via the square of the range. For example, I have used that method to calculate a VWAP and standard deviation bands without knowing the actual volume.

The chart below shows actual VWAP and SD bands (green/orange) and approximation via squared range (blue/red). The values are not 100% identical, but the approximation is fit for the purpose for which it was designed.


VWAP and SD bands are cumulated values. The quality of the approximation is not good if you are looking for moving window type indicators.

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  #4 (permalink)
Trading for Fun
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To understand it more clearly.

When someone trades in futures on the FDAX, does he has an a volume indicator which is representative for 'all' volume being processed by the FDAX? Or is a future trader too only has a volume indicator showing his broker's volume, not 'all/total' volume in the FDAX?

I won't go into your alternative because it's either going to be a 100% or, I won't use it at all. But a good trader told me without a volume indicator you can't trade, well since I trade CFD's I wish to use such, but only if it reflect the 'entire' market not just that of my broker, obviously...

Thanks for replying! And I hope you can provide me with a follow up!

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  #5 (permalink)
Market Wizard
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ForcefielD View Post
To understand it more clearly.

When someone trades in futures on the FDAX, does he has an a volume indicator which is representative for 'all' volume being processed by the FDAX? Or is a future trader too only has a volume indicator showing his broker's volume, not 'all/total' volume in the FDAX?

I won't go into your alternative because it's either going to be a 100% or, I won't use it at all. But a good trader told me without a volume indicator you can't trade, well since I trade CFD's I wish to use such, but only if it reflect the 'entire' market not just that of my broker, obviously...

Thanks for replying! And I hope you can provide me with a follow up!

I you trade an index or a commodity or a currency via futures you get a volume indicator which is representative for all volume being procecessed at the respective exchange (and not only by your broker). Some commodities are traded at more than one exchange, eg. wheat es traded at CBOT and MATIF (and probably somewhere else). In this case you get the volume for the exchange, but not the world-wide wheat volume. (I never traded FDAX, and I do not know, if FDAX is traded at more than one exchange.)

I hope I could make it clear.

Best regards, Myrrdin

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  #6 (permalink)
Trading for Fun
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Then the question still remains open,

where can I find a volume indicator for the DAX in this case on the 'real' market or future market?

Maybe someone knows a more specific answer no derivative of one.
If the answer is 'no' everyone using a Volume Indicator would be rather 'stupid' to trust it!
This reasoning make me believe there is one general all including volume indicator for the FDAX and where can I find it?
Then I can use this indicator next to my CFD trading... when I know what happens in the 'real' market, I can trade with alternatives on derivatives like CFD's, right?

I hope you two can maybe clarify this, again? Thanks for yar effort so far!

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  #7 (permalink)
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ForcefielD View Post
Then the question still remains open,

where can I find a volume indicator for the DAX in this case on the 'real' market or future market?

Maybe someone knows a more specific answer no derivative of one.
If the answer is 'no' everyone using a Volume Indicator would be rather 'stupid' to trust it!
This reasoning make me believe there is one general all including volume indicator for the FDAX and where can I find it?
Then I can use this indicator next to my CFD trading... when I know what happens in the 'real' market, I can trade with alternatives on derivatives like CFD's, right?

I hope you two can maybe clarify this, again? Thanks for yar effort so far!


Unlike FOREX and stocks, index futures are only traded at a single exchange. This means that accurate volume information is available for all futures contracts. You can subscribe to a datafeed to get this accurate volume information. For example Kinetick, DTN/IQ or eSignal would provide you with accurate price and volume information for the FDAX. This price and volume information is needed if you wish to trade the instrument at the exchange that offers the contract. For example EUREX offers the FDAX contract (25 € per point) and since a few weeks a second contract the FDXM (5 € per point).

A CFD broker basically is a reseller of the FDAX contract. His quotes are based on the official FDAX prices quoted on the EUREX trading platform. The reseller offers short and long positions to you and other small traders. Partially these positions cancel out, and the remaining part is probably hedged with EUREX.

The problem with a CFD contract is that it is a private contract. You trade against the broker X and it is also X who dictates the quotes. You also have a considerable counter party risk, because your money will be lost, if the broker X files for bankruptcy. Consider this as a soccer game, where you play against an a team and an arbitre which are both run by the FIFA.

If you trade at a futures exchange, the exchange does not trade against you. Futures exchanges are regulated by the state. The exchange is the arbitre. Your opponents are other traders. Back in 1748 Montesquieu published "the Spirit of Laws", where he described the separation of powers (legislature, executive, judiciary). Both economic models and sport events often fail, if this principle is not applied.

CFDs are a major fail, as conctract specs, pricing and trading is all in the hands of your opponent. This is a bit like Russian or Turkish democracy. I believe that CFDs - which are private contracts and governed by next to nothing - should be banned. They have just been designed to take the money out of your pockets.

Why don't you simply set up a regular broker account and trade the small FDAX contract FDXM with EUREX?

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  #8 (permalink)
Trading for Fun
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Thanks for yar reply!

I don't trade in futures because of the fact you can only trade in those two amounts you described 5/25 euro.
I like to change contract sizes when opportunity present itself and often use different amounts.
Besides those 2 amounts are a lot of money! And, while I know a lot, I consider myself still an amateur unless I get an annual income from the profits I make.

I understand your answer and am thankful for it! BUT, does something like you described exist for free?
Because the suppliers you mentioned only offer paid services. If you are a member of Esignal, I have a separate question for you, I will PM it to you if you are indeed a member.

Yes, the contracts in CFD's are different, but since its a derivative to the underlying future market they are both moving the same direction. Which means if you could use a volume indicator of the future market you can trade better and increase your certainty when trading in CFD's.

Also, you forgot to mention that most big CFD parties hedge their positions like IG or not like FXCM, but then again they fall under safety protocols up to 50.000. So there's really no risk involved with issues as long as you trade below this amount.
Which I most certainly do not have!

I could have set up at a broker and trade in futures, but... like most people say trading has an expensive 'learning curve', mine does at least! I lost for my age a lot of money!


Last edited by ForcefielD; December 5th, 2015 at 09:22 AM.
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  #9 (permalink)
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Answer
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If you trade via infinity futures, you get the Eurex data for free. You only pay for the Sierra charts, it's $20 per month.

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  #10 (permalink)
Trading for Fun
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Futures Experience: Beginner
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Favorite Futures: CfD-Ger30
 
Posts: 103 since Aug 2015
Thanks: 5 given, 99 received


This was not the answer I was expecting, but if it's the ONLY way, this is awkward still!
I mean why isn't the information available for free?
Volume from a future market to use for yar CFD trading, ... sounds like pretty basic to me!
Again... people probably want earn money of those who fail to make money...

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