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
May I humbly ask if you are part of an institutional traders group? You seem knowledgeable and I am impressed.
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.
An innocent question can elicit an innocent answer with an unintended and unknowing CONsequences.......hehehe j/k
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.
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!
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.
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?
For prop/market making, you'll need to already have been doing all that in another bank.
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?
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?
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
But to answer your hypothetical question: Yes, I suppose your hypothetical "large order" will probably prevent the market from where it "might go".
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.
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?
Interesting thread, as a retail Forex trader I am also interested to know the trading style of institutional Forex traders!
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