Tutorial Forex

If you are looking for a direct real time market sentiment indicator than you need to look no more. Trading volume of a stock or what that matter any security is a direct real time market sentiment indicator that when combined with technical indicators can give highly profitable trading signals. When the trading volume is high, it means that the current trend in the market will continue.

Volume figures are very important for traders. Stock and futures markets have volume data that helps the traders and investors in knowing how heavy a certain stock or futures contract is being traded. In case of futures market, volume figures are delayed by one trading day. Volume data is not possible for currency markets as the market is unregulated and over the counter due to which this data is unavailable.

As the futures contracts near the delivery month, volume increases. This increase in trading volume is good for traders and hedgers as it means better price discovery.

A Limit Up Day is a sign of strength however, a limit down day is usually followed by trading collars. You should know the Limit Days in futures market. Limit days are those days when a futures contract makes a big move in a very short period of time with heavy volume.

Open interest is the number of open contracts of a security in the market during a given trading period. Open interest is particularly an important tool for futures traders. Volume data alone can be confusing. So as a trader, you need to use volume data in conjunction with technical indicators. This way, you can understand the signficance of trading volume change and the trend change. You should also understand how volume data is reported in the stock and the futures market.

Open interest only applies to futures and options contracts and not to stocks. Open interest is the number of contracts entered into during a specific period of time but have not been liquidated or settled.

Open interest is the total number of contracts of a particular security that is long or short. Open interest rises by one when a new buyer or a new seller enters the market and takes a position in a security. Charting open interest alongwith the price charts can be an important means of tracking a contract.

Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures secret that can make you rich. Read the story of Richard Samuels, a post office mailman with a head injury and how he made a fortune with these Neutrino Forex Signals!