DislikedSeems like a pretty important implication to me. Why so quick to disqualify that answer?Ignored
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DislikedSeems like a pretty important implication to me. Why so quick to disqualify that answer?Ignored
DislikedA function of orders and time? The further way a given price is from the market, the more time for orders to be added there. Close to the market that potential is smaller, though some of it has turned into actual orders placed.Ignored
Quoting The BookDislikedLatent order interest is simply an accounting of participants who can/will trade if price were to move to a specific price level, but due to the costs associated with managing orders, remain on the sidelines until it does so.
To give you an example of how this manifests itself in the real world; imagine that you are a fundamental trader with an analysis which shows security A to be with 1.000. If price is currently hovering around 1.000, you likely have very little interest in participating in the market. However, if price suddenly moves down to .500 without a change in the underlying fundamentals, you’re going to have a great deal of interest in buying. In this example your desire to trade at .500 would be latent interest.
Latent order interest is predominantly comprised of fundamental traders so it tends to remain constant as long as the information related to fundamental value remains unchanged. When new information becomes available, this curve will shift up or down to reflect the aggregate opinion of what that new information means for fundamental value.
As a general rule however, the opinions formed by fundamental traders are slow to materialize. It may take a number of hours or even days for this new information to become properly digested. In the interim, the latent demand will curve will become somewhat wider and flatter due to the variability of interpretations regarding the data.
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Dislikedhmmm.. sorta... since you've all been very helpful, i'll give you some insight.Ignored
DislikedImportant it is. I didn't say its not important, I said it's nothing new, I always fade (thanks to your valuable posts btw . The trick is that fading alone is not a strategy, you need to know when and where to fade. Fading the stops is a good way to trade, which again brings back the subject of the post.Ignored
DislikedAll things in due time my friend.
Look, I know you guys are trying to figure this stuff out and I have to say, I'm really impressed with how far you have gotten. I'm sure it would make an untold number of people happy if I would just come out and give you all the answers, but I don't know that I could even if I wanted to.
[color=black][font=Verdana]To be honest, I "finished" my book like a month ago. After something like 8 months of diligent work, I managed...Ignored
DislikedYou can't imagine how many people here wish they were your girlfriend.Ignored
DislikedNo, in all seriousness, when my girlfriend can sit down and read me book, understand how what she read can be used to earn a profit, and explain to me why…. That’s when it will be done.Ignored
DislikedA change in fundermental factors will casue a shift OF the entire curve (supply or demand or both) meaning that as fundemental factors change it will actually change the size of the number of willing buyers or number of willing sellers in any given market. This is representeted by the latent supply and demand. Ceteris Paribis chuckle chuckle
So.. using DS example of the move down in price this will of course casue the quantity demanded to increase as is dislayed by the latent bars increasing away from price... If a change in price happens...Ignored
DislikedMaybe. What fun is a contest of knowledge if everyone knows? Makes the game tougher for those who knew first.Ignored
DislikedLets take this example: Market was at equilibrium. Now, lets say there is a shift in fundamental values to being more bullish.
What are the implications for the market and order flow and liquidity?
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DislikedNow I hope you guys get the idea. I can probably add another 100 things to that list, but it is up to you to make sense of it and harmonize it with your personality. I can't do that. I can just stimulate thought.
Now the other question is how do you determine change in fundamental value? Or how do you determine when fundamental values will quickly reverse? Or have been falsely interpreted? Or grossly misinterpreted?
That is for you to figure out. It will make you a far superior trader if you figure it out yourself.Ignored
DislikedNow all we have to do is find the fundamental value of the pair (which we don't even need to discuss since everyone can do it) and just fade any disbalances of price and fundamental value into the direction of the value (ok, I'm kidding, it's the perceived value)Ignored
DislikedInsipiring thread and inspiring post thank you. I agree figuring it out my/our selves would be far more worthwhile than having it spoon fed.Ignored