What Platform Is Best For Tracking Volatility & Volume?
There are two tools we use for tracking volume and volatility in the FX market. See what they are in this video...
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We have a quick question from Ashan, who asks whether there is an accurate way of watching volume and volatility for currency pairs on Tradingview? So, this is a great question Ashan, and one that will involve both Tradingview as well as Xenith.
In my opinion, the best way to track something like volume and volatility for specific currencies or currency pairs is by using Xenith, but there are a few instruments that Tradingivew has added which are helpful, but probably not for what you are looking for or what you have seen us use in Xenith.
So, what I’m assuming you are referring to is the FX Volume Heatmap on Xenith that tracks the volume decreases or increases for various currency pairs, very handy tool for keeping track of volume based on various time horizons, so for example, looking at the average volume over the past month, this heatmap, with a sensitivity selection of 40 is showing me whenever volume for a particular 30-minute interval was higher or lower than the average over the past month, so for example if you see a volume number here of 140% is means that volume that particular 30-minute time interval was 40% higher than the average daily volume, which is very useful info to know.
Now, when it comes to Tradingview, I haven’t found something similar to this, but there are other handy tools which can also be very useful and handy in terms of volume. The best one that I can think of is the Volume Profile indicator that they have built. This basically tracks the biggest volume that was traded for the period that you have on your screen at the various price levels. So, if you put this on a chart you can spot where the bulk of volume was traded from, which might or might not act as a magnet depending on where you think the currency pair is going next of course, and also keep in mind this will be limited to the broker which you have selected for that currency pair in Tradingview.
When it comes to volatility, I once again prefer using Xenith for the implied volatility data that you have available. You’ve probably seen these charts that we use in Xenith that gives us both the Implied Volatility as well as the risk reversals for currency pairs, I haven’t seen something like this in Tradingview yet, even going through the indicators there are a couple that tries to mirror this, but I feel most of them fall short of the detail provided by Xenith. Apart from this, the other volatility app in Xenith which is useful is the Volatility Chart, which gives you the option to view various different volatility metrics for various currency pairs, allowing you to view the similar implied vols than the charts, but also allows you to see things like the volatility smile for the pair which is helpful for gauging the way the options market is skewed towards either puts or calls.
Something that I do find more helpful on the Tradingview side, is the way that you can setup a cross asset class volatility tracker, we’ve done a video about this previously in the terminal so if you want to see how we incorporate this and set it up in the terminal just look for it in the Video Library section. Now all of these different asset class volatility gauges are also inside Xenith, but I just find this layout so much more user-friendly for this specific vol tracking.
So, to summarize, for me there isn’t really enough on just one of these platforms to give me everything that I want or need, I use both of them, but if I had to choose one over the other I would opt for Xenith in terms of volatility and volume tracking, so hope that helps with the question Ashan, any other questions don’t hesitate to let us know.
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If you find this content helpful, you’ll love Financial Source.
There’s a link below were you can learn more about it
https://financialsource.co
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
We have a quick question from Ashan, who asks whether there is an accurate way of watching volume and volatility for currency pairs on Tradingview? So, this is a great question Ashan, and one that will involve both Tradingview as well as Xenith.
In my opinion, the best way to track something like volume and volatility for specific currencies or currency pairs is by using Xenith, but there are a few instruments that Tradingivew has added which are helpful, but probably not for what you are looking for or what you have seen us use in Xenith.
So, what I’m assuming you are referring to is the FX Volume Heatmap on Xenith that tracks the volume decreases or increases for various currency pairs, very handy tool for keeping track of volume based on various time horizons, so for example, looking at the average volume over the past month, this heatmap, with a sensitivity selection of 40 is showing me whenever volume for a particular 30-minute interval was higher or lower than the average over the past month, so for example if you see a volume number here of 140% is means that volume that particular 30-minute time interval was 40% higher than the average daily volume, which is very useful info to know.
Now, when it comes to Tradingview, I haven’t found something similar to this, but there are other handy tools which can also be very useful and handy in terms of volume. The best one that I can think of is the Volume Profile indicator that they have built. This basically tracks the biggest volume that was traded for the period that you have on your screen at the various price levels. So, if you put this on a chart you can spot where the bulk of volume was traded from, which might or might not act as a magnet depending on where you think the currency pair is going next of course, and also keep in mind this will be limited to the broker which you have selected for that currency pair in Tradingview.
When it comes to volatility, I once again prefer using Xenith for the implied volatility data that you have available. You’ve probably seen these charts that we use in Xenith that gives us both the Implied Volatility as well as the risk reversals for currency pairs, I haven’t seen something like this in Tradingview yet, even going through the indicators there are a couple that tries to mirror this, but I feel most of them fall short of the detail provided by Xenith. Apart from this, the other volatility app in Xenith which is useful is the Volatility Chart, which gives you the option to view various different volatility metrics for various currency pairs, allowing you to view the similar implied vols than the charts, but also allows you to see things like the volatility smile for the pair which is helpful for gauging the way the options market is skewed towards either puts or calls.
Something that I do find more helpful on the Tradingview side, is the way that you can setup a cross asset class volatility tracker, we’ve done a video about this previously in the terminal so if you want to see how we incorporate this and set it up in the terminal just look for it in the Video Library section. Now all of these different asset class volatility gauges are also inside Xenith, but I just find this layout so much more user-friendly for this specific vol tracking.
So, to summarize, for me there isn’t really enough on just one of these platforms to give me everything that I want or need, I use both of them, but if I had to choose one over the other I would opt for Xenith in terms of volatility and volume tracking, so hope that helps with the question Ashan, any other questions don’t hesitate to let us know.
-----
If you find this content helpful, you’ll love Financial Source.
There’s a link below were you can learn more about it
https://financialsource.co
