Volume on FX

#1

for todays trade “buy USD/CAD” on ninjatrader the volume was 2 at around close, does that mean there was only 2 contracts open on nadex or the actual underlying. i ask because the us500 always shows a huge number for volume around the open. i always read that its better to trade with a good amount of volume but is it different with binaries? thx

#2

Excellent Questions

binaries are totally different (derivatives in general are different)

the number you see is not volume - it is the best bid/offer and # of contracts available at that price that means people where trying to buy/sell 2 contracts at that price if you open the ticket you will see up to 3 levels of volume (i.e. you may see another level of 20 or 200 etc… below it at a lower price on bid side higher price on ask side) i.e. if you put in a limit order for 1 contract inside the bid/ask spread you will see it show only 1 (on sell side if you put in a buy) - but if you open it you will see the volume at the market maker price below it you an do the same thing on US500

also on markets you need volume as you need the market to move without being choppy and need ability to get out - this is a derivative - so it will move on no volume as its price is dervied from the markets price - but either way - that is a level 2 dom quote showing best bid/offer quantity not volume availble to trade -

***test it - open demo - put in a order to buy us500 at say 3 ticks better than the offer price - watch the bid go to 1 contract (as someone has to sell it to you at that price so it will display [note it has to be within bid/ask to see this] - but then click on that binary ticket and see the volume on 2nd level at lower price

rule is fill or reveal - so the market maker has to fill your order or reveal your order to other trades (they don’t know its you if getting in out winning losing they just see order and have to fill it or reveal it to the market)

on nj the volume was 2 at around close, does that mean there was only 2 contracts open on nadex or the actual underlying. i ask because the us500 always shows a huge number for volume around the open. i always read that its better to trade with a good amount of volume but is it different with binaries? thx