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oopsies Jul 21, 2017 1:52pm | Post# 1161

Hello, sorry if I'm not supposed to revive old threads but I was lurking from Google and stumbled across this. I'm hoping that people are still answering questions.

Earlier in the thread, Vogon asked this question (https://www.forexfactory.com/showthr...30#post7492630) and Skenobi replied with this answer (https://www.forexfactory.com/showthr...rs#post7501705). When he said that he "loves those pinbars", was he being sarcastic and making a comment on how pinbars near S/R levels don't really work? That as a former IT, it's his "clue" to where to run stops, etc.? Or did he mean it as in it works pretty well? The reason for my question is because a few pages earlier, there was some talk about running stops, how jr traders are stupid with all their technicals and philosophies, etc. So I wasn't sure where the context led. Was hoping someone could clarify!

I am having difficulty deciding where to place my stop losses and when to decide that my trade was the wrong trade idea. I'm trying to figure out how Skenobi (and other IT) handled their exits. From what I gathered, Skenobi has a hard stop at least one S/R away from his entry but he relies more on his mental stop and is usually out before price reaches his mental stop. But he never explained how (and no one ever asked) he determines where to place the mental stop. I guess I'm trying to get a bit of understanding into how he and others "know" when a trade idea isn't going to work. Is it because his mental stop is really far away from the entry so by the time the price gets there, he "knows" because it's now almost impossible to recover from the loss? Or is it really close to the entry point and it's just "intuition" from years of tape reading? Or is it somewhere in between - rules that he had to follow when he worked as an IT and it sort of got trained into him to get out right away when he sees a certain pattern/movement?

As a summary from what I gleaned after reading 58 pages:
- simple candlestick charts, none of the fancy schmancy indicators and the like
- draw your S/R lines using a line chart based on obvious highs and lows. Then can switch back to candlestick and adjust where necessary. Order clusters are around these S/R lines that you draw.
- S/R lines are not true lines but view them as "areas". They are different from person to person so the line itself is not gospel.
- the market has "memory"
- S/R lines with repeatable history are more reliable
- understanding behaviour around S/Rs (order clusters) is one solid key to profitability (comes from screentime)
- use all timeframes - don't discount any of it. Whatever brings in the money.
- don't trade against the trend
- the old adage of buy low, sell high is really how it all works in the end. Many retail traders do the opposite despite best intentions.
- don't wait for confirmation of breakout. Trade and then if it breaks out, great. If not, have the discipline to get out.
- candlesticks help but are not be all and end all. It's understanding the price action around S/R that's more important. Can use candlesticks on higher timeframes to "summarize" what's going on in the lower timeframes.
- most retail traders trade far too large sizes - trade smaller to control losses
- cannot control upside and therefore, while risk-reward ratio is in the back of the mind, it is not really that important. Rather, you can only control when you cut losses so that is much more important to focus on.
- ignore all the "strategies" that various people have - develop your own based on your own comfort levels with risk.
- keep it simple. If it seems "complex" then it's probably wrong.
- don't worry about the "why's" of whether something works - if it works, use it.
- news is mostly useless and clutters your analysis
- the rest is price action reading which can only be learned from screentime and paying "market tuition"
- IT don't trade that much more differently from retail traders. Retail trading volumes aren't even a "blip" on anyone's radar. The markets are what they are and whether they are rigged or not is irrelevant. This is the playing field - you only need to figure out how to play to make money.
- a true "edge" is something that is pretty much guaranteed to work. Otherwise, it's not an edge.

A good insight into what ITs mean whey they say "understand price action" starting from this post: https://www.forexfactory.com/showthr...10#post8614910

skenobi Sep 15, 2017 12:02am | Post# 1162

Hello, sorry if I'm not supposed to revive old threads but I was lurking from Google and stumbled across this. I'm hoping that people are still answering questions. Earlier in the thread, Vogon asked this question (https://www.forexfactory.com/showthr...30#post7492630) and Skenobi replied with this answer (https://www.forexfactory.com/showthr...rs#post7501705). When he said that he "loves those pinbars", was he being sarcastic and making a comment on how pinbars near S/R levels don't...
I only look out for pinbars and engulfing patterns for my own trading, not for clues to where to run stops. Stop running (from a retail trader's perspective) is a separate issue. for example, possible stop runs ahead of key economic data helps a retail trader determine how many S/R levels away he wants to move his stop to.

I am having difficulty deciding where to place my stop losses and when to decide that my trade was the wrong trade idea. I'm trying to figure out how Skenobi (and other IT) handled their exits. From what I gathered, Skenobi has a hard stop at least one S/R away from his entry but he relies more on his mental stop and is usually out before price reaches his mental stop. But he never explained how (and no one ever asked) he determines where to place the mental stop.
I can't put it down in words. After you've lost enough, you just "know". If you've ever played online backgammon against a "crooked" computer player, you'll know what I mean.

I guess I'm trying to get a bit of understanding into how he and others "know" when a trade idea isn't going to work. Is it because his mental stop is really far away from the entry so by the time the price gets there, he "knows" because it's now almost impossible to recover from the loss? Or is it really close to the entry point and it's just "intuition" from years of tape reading? Or is it somewhere in between - rules that he had to follow when he worked as an IT and it sort of got trained into him to get out right away when he sees a certain...
Maybe all the of the above?

- S/R lines are not true lines but view them as "areas". They are different from person to person so the line itself is not gospel.
The lines may be different from person to person, but the areas or zones are not.

- use all timeframes - don't discount any of it. Whatever brings in the money.
Don't forget NOT to discount the more uncommon odd pairs e.g. GBPAUD, EURNZD etc etc

- don't trade against the trend
Or if you must, have a solid reason for doing it.

- don't wait for confirmation of breakout. Trade and then if it breaks out, great. If not, have the discipline to get out.
Waiting for confirmation depends on the trader. Some have a talent and patience for it, so I personally don't discount it.

- most retail traders trade far too large sizes - trade smaller to control losses
Don't trade too small, that you don't feel the sting of the loss.

- news is mostly useless and clutters your analysis
The TIME of the news can be useful, however.

- a true "edge" is something that is pretty much guaranteed to work. Otherwise, it's not an edge.
An edge also only works in the eye of the beholder.

genghistar Sep 15, 2017 12:45am | Post# 1163

{quote} I only look out for pinbars and engulfing patterns for my own trading, not for clues to where to run stops. Stop running (from a retail trader's perspective) is a separate issue. for example, possible stop runs ahead of key economic data helps a retail trader determine how many S/R levels away he wants to move his stop to. {quote} I can't put it down in words. After you've lost enough, you just "know". If you've ever played online backgammon against a "crooked" computer player, you'll know what I mean. {quote} Maybe all the of the above?...
Mr/Mrs Skenobi,

May I humbly ask if you are part of an institutional traders group? You seem knowledgeable and I am impressed.

GS

staurum Sep 15, 2017 12:59am | Post# 1164

{quote} I only look out for pinbars and engulfing patterns for my own trading, not for clues to where to run stops. Stop running (from a retail trader's perspective) is a separate issue. for example, possible stop runs ahead of key economic data helps a retail trader determine how many S/R levels away he wants to move his stop to. {quote} I can't put it down in words. After you've lost enough, you just "know". If you've ever played online backgammon against a "crooked" computer player, you'll know what I mean. {quote} Maybe all the of the above?...

Hi Skenobi, thank you for sharing. i found the last three to be more important than others. Hope everyone can figure it out for themselves.

genghistar Sep 15, 2017 1:32am | Post# 1165

An innocent question can elicit an innocent answer with an unintended and unknowing CONsequences.......hehehe j/k

GS.

skenobi Sep 15, 2017 3:21am | Post# 1166

{quote} Hi Skenobi you post in here a lot is all im saying
Not lately.

how big is your average stop loss just out of interst
The exact dollar quantum of the stops is private to me. There is no average. It pretty much depends on my mood. Also, the figure is subject to how many S/R levels back I want to place the stops near.

and what do you trade most
Any pair in the top 20 with the highest 15-day ADR (i.e. whatever that's moved a lot) and with a discernible trend in any timeframe.

skenobi Sep 15, 2017 3:34am | Post# 1167

{quote} Mr/Mrs Skenobi, May I humbly ask if you are part of an institutional traders group?
"group"? Maybe there are many groups... I don't think I'm one of them, tho.

You seem knowledgeable and I am impressed. GS
I only have my own limited experience to draw upon. You can get a variety of institutional flavors from other former/current bank traders here.

genghistar Sep 15, 2017 3:46am | Post# 1168

{quote} "group"? Maybe there are many groups... I don't think I'm one of them, tho. {quote} I only have my own limited experience to draw upon. You can get a variety of institutional flavors from other former/current bank traders here.
Tks for your kind reply so my question is are you a institutional currency trader or were you one before?

GS

skenobi Sep 15, 2017 4:09am | Post# 1169

{quote} Tks for your kind reply so my question is are you a institutional currency trader or were you one before? GS
I was.

If you have any more questions or have a point to make, do read this thread from the beginning (it's only been 50plus pages) before continuing.

I'm fairly confident most of your concerns will be answered.

genghistar Sep 15, 2017 4:27am | Post# 1170

{quote} I was. If you have any more questions or have a point to make, do read this thread from the beginning (it's only been 50plus pages) before continuing. I'm fairly confident most of your concerns will be answered.
Ofc I will read them when I have the time and tks again.

GS

oopsies Sep 15, 2017 1:09pm | Post# 1171

{quote} I only look out for pinbars and engulfing patterns for my own trading, not for clues to where to run stops. Stop running (from a retail trader's perspective) is a separate issue. for example, possible stop runs ahead of key economic data helps a retail trader determine how many S/R levels away he wants to move his stop to. {quote} I can't put it down in words. After you've lost enough, you just "know". If you've ever played online backgammon against a "crooked" computer player, you'll know what I mean. {quote} Maybe all the of the above?...
Hi Skenobi,

Thanks for your response! I've had a few months since I last posted to put into practice a lot of those things. I am still having difficulty determining when I should get out of a bad trade. What ends up happening is I wait and then I give up and leave. But then shortly after that, the bad trade corrects itself. But the next time I hold on and wait it out and the trade gets even worse! So I can't figure out how long to hold on to a bad trade. Also, sometimes I leave because I'm starting to feel the "sting" or I'm worried that I can't hold onto the loss any longer due to capital constraints. I guess this is part of the "market experience" that I lack.

I was just hoping for some additional tips/clues on how to determine that a bad trade should be cut or how to approach the next bad trade differently? It can be very frustrating... I make money with other trades and then I lose it because I can't figure out how to exit bad trades. At least my capital is protected... haven't had a net loss yet. Though it would be nice to make more!

On the bright side, my entries are getting much better. It's just the exits that I have a problem with. Whoever is reading these pages to learn, just know that it's very personalised. They aren't joking when they say there's no real way to "show" you how to make money - you really need the market time and your strategy needs to fit your personality and your fears. There's no one-size fits all!

GodfatherSam Sep 18, 2017 1:24am | Post# 1172

It's nice to see that there are so much experienced trader in here who are sharing their experience. Thanks for sharing your experience here.

GoldenFinger Sep 24, 2017 9:41pm | Post# 1173

{quote} I was. If you have any more questions or have a point to make, do read this thread from the beginning (it's only been 50plus pages) before continuing. I'm fairly confident most of your concerns will be answered.
Hi skenobi,

From your experience, what kind of quality does a typical bank look for in malaysia when hiring new recruits working in the back office, mainly prop trading, market making?

I don't have any industry experience nor any relation, is it hard to even land a job on the basic level (juniour analyst etc, not CSP working in front office)

If I can provide a track record of consistent profit ranging from several months on my retail forex account, will any bank consider giving me an apportunity to trade for them?

I am a malaysian graduated from australia, thinking of going back. If the opportunity is slim back in Malaysia, do you have any suggestions?

Is Professional recognition like CFA a door opener for tresury role?

Many thanks!!!


Regards

skenobi Sep 24, 2017 10:03pm | Post# 1174

what kind of quality does a typical bank look for in malaysia when hiring new recruits working in the back office, mainly prop trading, market making?
For back office, basic degree, but banks nowadays prefer to hire in-house or experienced pros from other banks.
For prop/market making, you'll need to already have been doing all that in another bank.

I don't have any industry experience nor any relation, is it hard to even land a job on the basic level (juniour analyst etc, not CSP working in front office)
Dunno. I've never had to hire juniors in recent years.

If I can provide a track record of consistent profit ranging from several months on my retail forex account, will any bank consider giving me an apportunity to trade for them?
No.

I am a malaysian graduated from australia, thinking of going back. If the opportunity is slim back in Malaysia, do you have any suggestions?
I have nothing to suggest, to be honest. Working for a bank is not something I recommend anymore. If you had read this thread from the beginning, you would know.

Is Professional recognition like CFA a door opener for tresury role?
It's not a door opener on the prop desks. A CFA is not an indication of a trading profitability. Like a degree, a CFA is just a piece of paper. You can try your luck at other desks.

tashkent Oct 18, 2017 9:55am | Post# 1175

{quote} I was. If you have any more questions or have a point to make, do read this thread from the beginning (it's only been 50plus pages) before continuing. I'm fairly confident most of your concerns will be answered.
Hi Skenobi,
I have read some people claiming that price also can be moved by just placing big orders. if true, can you please explain the mechanism of such market behavior?

skenobi Oct 19, 2017 1:01am | Post# 1176

{quote} Hi Skenobi, I have read some people claiming that price also can be moved by just placing big orders. if true, can you please explain the mechanism of such market behavior?
Price moves to the next best bid/offer.

If someone pays better than the current bid, then price goes up.
If someone offers better than the current offer, then price goes down.

"Big" orders only give the bidder or offerer the bullets to stand his ground or (as you say) "move the market". But really, it isn't the SIZE that moves price. It's who can pay or offer better than the current bid/offer. You can "hear" of rumors of "big orders" but such sentiments can turn on a dime as sometimes "big orders" are filled privately for whatever private reason.

Some uppity retail trader will take issue with what I'm gonna say next, but I don't really care: Big orders doesn't have anything to do with anything.

Another example: Say EURUSD is dealing 1.1810/20.

1.1820 keeps getting taken many times for a long time but the offerer keeps offering at 1.1820, i.e. price doesn't go up.

Does that mean the offerer has a "big order"? Not necessarily.

It can mean he has more "bullets" for reasons that are known only to him. Or maybe he has a vested interest to keep the level there (due to barrier option expiries, for example).

Or maybe, just maybe, no one else gives a shit enough to pay higher than the current offer, and at the same doesn't give a shit enough to hit the bid enough times to drive price lower instead. Believe it or not, this is quite common.

Can you see by now that it's not about the size?

GoldenFinger Oct 19, 2017 3:11am | Post# 1177

{quote} Price moves to the next best bid/offer. If someone pays better than the current bid, then price goes up. If someone offers better than the current offer, then price goes down. "Big" orders only give the bidder or offerer the bullets to stand his ground or (as you say) "move the market".
Hi skenobi,

What happened when there is large order placed to the order book which its main intent was to confuse MM and manipulate the market instead of genuinely wanted to get filled?

Surely it won't move the market now, but it also prevent the market from going where it might go?
For example, a large buy limit below the market price, which MM will not have the capacity to fill cause of lack of sell order below that limit price, so MM that make market based on all the standing orders will most likely not trade at that price if they can't offload their inventory. If that's the case, price will most likely go up instead of going down?


From your previous post, you mentioned before market making session start, bank dealers will hunt for stops around current price, from my understanding, this can be done only on the pair that the bank has the most order flow info, for example MYR/USD for a malaysian bank, and it can't be done on EUR/USD where most flow info are not available to the malaysian bank, is my understanding correct?

Thank you for you enlightment

skenobi Oct 19, 2017 4:11am | Post# 1178

{quote} Hi skenobi, What happened when there is large order placed to the order book which its main intent was to confuse MM and manipulate the market instead of genuinely wanted to get filled?
One large order won't do it. In any First World bank order book, there are hundreds (if not thousands) of orders with opposing intents. You can't look at individual orders in isolation. Intent is very fluid and tends to move in flocks.

Surely it won't move the market now, but it also prevent the market from going where it might go?
Where it "might go"? I suspect you subconsciously meant to say "where I WANT it to go". If you think I'm wrong, I hope you won't think badly of me when I say I don't believe you. ;-)

But to answer your hypothetical question: Yes, I suppose your hypothetical "large order" will probably prevent the market from where it "might go".

For example, a large buy limit below the market price, which MM will not have the capacity to fill cause of lack of sell order below that limit price,
"not have the capacity"? "lack of sell order"? Not true. Market makers make the market. It's all about having the will and/or the interest. If there are no sell orders below the limit price, NO PROBLEM. THEY can create new offers on their own and can keep selling until someone buys.

so MM that make market based on all the standing orders will most likely not trade at that price if they can't offload their inventory.
What "inventory"?

To follow on from my last paragraph, if they want to keep selling beyond their so-called "inventory" all they have to do is do an overnight buy/sell FX swap in order to keep their short positions. Again... NO PROBLEM.

If that's the case, price will most likely go up instead of going down?
If the MM doesn't have any interest in hitting that limit buy (for their own reasons), then yes, price will likely go higher. Do note that MMs are not scared of that limit buy order. In your hypothetical case, maybe they just don't give a shit.

From your previous post, you mentioned before market making session start, bank dealers will hunt for stops around current price, from my understanding, this can be done only on the pair that the bank has the most order flow info, for example MYR/USD for a malaysian bank, and it can't be done on EUR/USD where most flow info are not available to the malaysian bank, is my understanding correct?
While Malaysian Banks might not participate in EURUSD stop hunts, that's not to say they don't have enough information from their contacts to position themselves accordingly.

limprobable Oct 19, 2017 5:33am | Post# 1179

Hello,

An old trader (he is no more trading), says that on CAC40 future, he manipulate the market at the close, how it can be done?
He says that he was trading "arbitrage": what does that mean?

Thanks

NeilWagner Oct 19, 2017 5:58am | Post# 1180

Interesting thread, as a retail Forex trader I am also interested to know the trading style of institutional Forex traders!


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