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foobar Mar 4, 2018 9:13am | Post# 1241

{quote} Snowflake, perhaps? Oh well... Note to the rest: Feel free to set me on your Ignore list. Of course, y'all don't need anybody's permission for that.
Hi Skenobi and other experienced traders,

I can see opportunities in USDJPY and EURUSD of 7 pips sometimes. However my cost of execution for round trip is around 1pip. This makes me reluctant to trade these opportunities as the risk reward isn't that favorable after costs. How can I lower my cost of execution to less than 1 pip if that is possible at all? I do not have direct access to interbank quotes or EBS or Reuters. Are their costs lower than 1 pip for round trip?

On ECN network, the spread for EURUSD is typically .2 pips and USDJPY .3 pips. When I use limit orders I find that I experience more adverse selection since my broker only crosses it internally. Does it make sense to just use market orders all the time?

skenobi Mar 4, 2018 10:36am | Post# 1242

{quote} Hi Skenobi and other experienced traders, I can see opportunities in USDJPY and EURUSD of 7 pips sometimes. However my cost of execution for round trip is around 1pip. This makes me reluctant to trade these opportunities as the risk reward isn't that favorable after costs. How can I lower my cost of execution to less than 1 pip if that is possible at all?
Wow... you can make 7 but you won't give up a lousy 1? Or am I understanding you wrong?

I do not have direct access to interbank quotes or EBS or Reuters. Are their costs lower than 1 pip for round trip?
For USD crosses, half the time, sure, why not? For non-USD crosses like EURGBP not always but still more reliable than retail.

On ECN network, the spread for EURUSD is typically .2 pips and USDJPY .3 pips.
If you say so.

When I use limit orders I find that I experience more adverse selection since my broker only crosses it internally.
I can't speak for other former institutionals now trading retail, but I always start my day having a low opinion of my broker's execution (ECN or no ECN).

By the way, my methods don't depend on pin-point execution. I just need to be on the right side of the S/R zones I'm looking at. Perhaps your system/methodology is a little rigid?

Does it make sense to just use market orders all the time?
The execution only has to make sense to you and your edge.

skenobi Mar 5, 2018 11:46am | Post# 1243

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Another lazy rookie added to my Ignore list.

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Redeflect Mar 5, 2018 1:25pm | Post# 1244

Another lazy rookie added to my Ignore list. {image}
Sounds like he's still in the dark about the pools. Hint hint.

foobar Mar 6, 2018 1:58am | Post# 1245

{quote} Wow... you can make 7 but you won't give up a lousy 1? Or am I understanding you wrong? {quote} For USD crosses, half the time, sure, why not? For non-USD crosses like EURGBP not always but still more reliable than retail. {quote} If you say so. {quote} I can't speak for other former institutionals now trading retail, but I always start my day having a low opinion of my broker's execution (ECN or no ECN). By the way, my methods don't depend on pin-point execution. I just need to be on the right side of the S/R zones I'm looking at. Perhaps...
Sorry I wasn't clear. When I see opportunities of 7 pips it isn't with 100% probability but say a lot more likely to make 7 pips than lose 7 pips. However with transactions costs (spread + execution) of 1 pip, what is profitable for me might become loss making. I'm trying to find out how to lower my costs so that I can generate more trades so as to smoothen my equity curve more.

Do you think that it's worth the effort to trade for 7 to 10 pips or focus more on those 30 to 100 pips opportunities?

skenobi Mar 6, 2018 2:56am | Post# 1246

{quote} Sorry I wasn't clear. When I see opportunities of 7 pips it isn't with 100% probability but say a lot more likely to make 7 pips than lose 7 pips. However with transactions costs (spread + execution) of 1 pip, what is profitable for me might become loss making.
If the probability difference between making 7 and losing 7 is basically a crap shoot for you, it sounds to me like you need to find another edge. Tighter spreads (i.e. minutely-lower costs) will not save you there. Not sure how else anyone can give you a better observation. Maybe someone here can give you a second opinion?

Do you think that it's worth the effort to trade for 7 to 10 pips or focus more on those 30 to 100 pips opportunities?
It depends on the kind of trader you think you are or the kind of trader you want to be.

For instance, I don't have time to look at markets more than once in a day. So my focus is on making 100-200 pips.

I can scalp and still make money (and institutionals have to know this because their workstations at the Banks are expensive to justify).

Nowadays I just choose not to.

Ill-b-back Mar 6, 2018 7:24am | Post# 1247

Is anyone on this forum an institutional trader?
I trade from an institution.

Does that count...?


RelaxRay Mar 9, 2018 6:12am | Post# 1248

{quote} I am, however, putting you on MY Ignore list, as I feel this is actually the wrong thread for you to address the EURCHF retail traders' cause you bring up.

Note however that I'm not banning you from this thread (it's not my thread anyway); I just won't see your posts anymore.

The best of luck to you in getting your issues resolved elsewhere!

Cheers! ..
lol. very classy reply. (Y) Reminds me of all the time FTI did it in his thread.

Rgds

GoldenFinger Mar 20, 2018 8:19am | Post# 1249

Hi skenobi, I would like to hear your insights on a few questions

1)who make market during off exchange hours, for stock indices? If someone has vested interest in a particular asset, can he push the market during less liquid hours like gbp, eur pair on asian session? or S&P 500 after american session? If the answer is yes, this mean the move can be manipulated and have a chance to be corrected once the most active market for the particular asset open?

2)since most asset are interrelated, do you think our edge is the greatest when we jump into the trend that can be explained by fundamental flow? this means we avoid any trend that doesn't make sense just in case the trend is not backed by real flow and can be short life? ex: all stock market down, but JPY go down without any reason, we avoid the trend in jpy even though thrust is strong? (as jpy is major borrowing currency as should shoot up during risk aversion)

3)likewise, what do you think of ranging market, I find it really challenging as ranging market is very irregular and the central point keep shifting, even with dollar cost averaging it is diificult as our tp might not get hit when we need to stop attend our position, do you avoid ranging market? (movement that are out of sync with historical correlated asset class)

4)Does MM monitor cross chart also when market making in major, the reason being I often observe that when majors chart are zig zaging and historical positive/ negative correlated asset move in opposite direction, I suspect that this is because MM know many trader will monitor cross chart and they use cross chart to hunt stops? ex: MM know today non trending day in majors, they sell eur buy gbp (which are positvely correlated) to trip eur/gbp sell stops and then buy eur sell gbp to trip buy stops? likewise, by observing cross chart we can determine the likely price movement when majors are not trending, ex: EUR/GBP are trending up, and we determine today is non trending day on major, we can guesstimate that eur might go up and gbp will go down which are still contain in a range in majors, and EURGBP will trend up?

many thanks

regards

skenobi Mar 27, 2018 2:16am | Post# 1250

Hi skenobi, I would like to hear your insights on a few questions 1)who make market during off exchange hours, for stock indices?
Dunno. I don't touch exchange-traded stuff. Maybe someone else can answer?

If someone has vested interest in a particular asset, can he push the market during less liquid hours like gbp, eur pair on asian session? or S&P 500 after american session?
Sure.

If the answer is yes, this mean the move can be manipulated and have a chance to be corrected once the most active market for the particular asset open?
You're not going to get a different answer from the last time I answered you back in October. Manipulated or not, price will continue upwards until sellers (not MORE sellers) appear and buyers quit; price will continue lower until buyers (not MORE buyers) appear and sellers quit.

Size doesn't matter.

Whether the initial move appeared manipulated (or even whether it corrects) or not, doesn't matter. The same principle applies.

Let me put it in another way: If price moves as a result of only ONE player in low volume conditions in a no-capital-control currency pair, would you still consider it "manipulated"?

If the answer to the above matters to you (it doesn't bother me and many others at all), you're going to be disappointed many, many times in the markets, and just wasting time besides.

2)since most asset are interrelated, do you think our edge is the greatest when we jump into the trend that can be explained by fundamental flow?
If looking for "explanations" makes you money, then that "edge" works for you. And I'll be happy that it works for you because you'd have succeeded where a lot of price-action institutionals like me have "failed".

There is no "our edge". Just "my edge" or "your edge". It doesn't have to work for other people. You don't have to make people agree with you; you just continue making money.

For me? Looking for explanations is a waste of time.

Looking for flow information is a waste of time, because flow information is fluid and orderbooks can change on a dime. *snaps fingers*

Depending on inter-relations and then complaining when the inter-relationships don't "work" is a waste of time.

But that's just me. You don't have to agree.

this means we avoid any trend that doesn't make sense just in case the trend is not backed by real flow and can be short life?
If you want to avoid a trend, that's your choice. You shouldn't say "we". "Short life" is a matter of individual perspective/preference. A scalper, for instance, can still trade trends in low timeframes regardless of fickle flow information.

ex: all stock market down, but JPY go down without any reason, we avoid the trend in jpy even though thrust is strong? (as jpy is major borrowing currency as should shoot up during risk aversion)
That's your personal choice. Other people might see it differently. (I won't be drawn into your interpretation of text-book why's and what-fors. I stopped caring about "theory" back in November-December of 1995, one month after I entered financial markets for the first time.)

3)likewise, what do you think of ranging market,
*shrug* I don't think much.

If there's opportunity, I just trade it.

I find it really challenging as ranging market is very irregular and the central point keep shifting, even with dollar cost averaging it is diificult as our tp might not get hit when we need to stop attend our position,
Even when ranging, I always scalp in the direction of the longer term trend. But that's just me.

Maybe ranging conditions aren't your cup of tea?

do you avoid ranging market?
Nope.

(movement that are out of sync with historical correlated asset class)
That's your opinion. I personally don't have time to calculate correlations; For instance, I was trained to just look at the slope of a 60-bar MA on an intraday chart to get a feel. Good enough for me.

4)Does MM monitor cross chart also when market making in major
I can't speak for others, but speaking for myself and those I do know: no we don't as much.

, the reason being I often observe that when majors chart are zig zaging and historical positive/ negative correlated asset move in opposite direction,
Again, that's your observation. Some may agree with you, but others (like me) will not lose any sleep over it.

Why? If charts are zig-zagging as you say, I would just dial up or down the chart TF and find a usable trend and gauge from there. So for instance, if I can SEE with my eyeballs that EURUSD and GBPUSD is trending up, while EURGBP is trending lower, it just means that the USD is weaker in general and should be traded against stronger of the EURGBP cross i.e. I look for levels to buy cable.

That's enough "correlation" for me.

I suspect that this is because MM know many trader will monitor cross chart and they use cross chart to hunt stops?
I'm not sure about MMs using charts (cross or otherwise) to hunt stops.

Knowing what I know about how price behaves when we hunt stops, we already pretty much know where the weak order clusters are. Weak or not, these clusters USUALLY gather around historical S/R lines.

ex: MM know today non trending day in majors, they sell eur buy gbp (which are positvely correlated) to trip eur/gbp sell stops and then buy eur sell gbp to trip buy stops?
You're making the same mistake as before in assuming MMs make decisions looking at isolated factors. Their decision-making matrix is 3-dimensional; there are MANY considerations.

Refer back to my answer here for a flavor of what I meant.

https://www.forexfactory.com/showthr...0#post10411010

likewise, by observing cross chart we can determine the likely price movement when majors are not trending, ex: EUR/GBP are trending up, and we determine today is non trending day on major,
My opinion: majors are always trending (even in those ranges you talk about). Just not always in the TF you're interested in.

If you decide today is a non-trending day and if you don't trade trends, then feel free to stay out of markets. The rest of us are just fine. There is no "we".

we can guesstimate that eur might go up and gbp will go down which are still contain in a range in majors, and EURGBP will trend up?
I can guesstimate that there will be at least a few more people unsubscribing from me after this.

copi88 Mar 27, 2018 6:00am | Post# 1251

Hi skenobi, I would like to hear your insights on a few questions 1)who make market during off exchange hours, for stock indices? If someone has vested interest in a particular asset, can he push the market during less liquid hours like gbp, eur pair on asian session? or S&P 500 after american session? If the answer is yes, this mean the move can be manipulated and have a chance to be corrected once the most active market for the particular asset open?
Here is the answer to first part of your question - https://www.investopedia.com/ask/answers/04/061004.asp

With regards to the rest it is typical of the institutions to manipulate price in the low vol Asian sessions because its cheaper to do it then. They will pass on instructions to their Asian desk to achieve a certain price which will then be reversed in the European session.

For the S&P its a bit different. Institutions will typically use the volumes at the close to accumulate a position and then the volumes at the opens to get off.

Calculus Mar 27, 2018 10:50am | Post# 1252

{quote}With regards to the rest it is typical of the institutions to manipulate price in the low vol Asian sessions because its cheaper to do it then. They will pass on instructions to their Asian desk to achieve a certain price which will then be reversed in the European session.
But what happens if institution A wants to 'manipulate' prices lower in the thinner Asian session yet institution B wants their Asian desk to 'manipulate' prices higher? Someone is going to lose via their manipulations so manipulation only means profits if it works, and many times it doesn't.

Overall everyone should forget about institutional traders, 90% are not that good and if you look at the average P&L statement for their own punting (house money) it's not pretty. Yes, of course they tend to make money but that's what the bid-offer spread, fees, commissions, fees on fees, commissions on fees and outright cheating/fraud/theft are for.

copi88 Mar 27, 2018 1:25pm | Post# 1253

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{quote} But what happens if institution A wants to 'manipulate' prices lower in the thinner Asian session yet institution B wants their Asian desk to 'manipulate' prices higher? Someone is going to lose via their manipulations so manipulation only means profits if it works, and many times it doesn't. Overall everyone should forget about institutional traders, 90% are not that good and if you look at the average P&L statement for their own punting (house money) it's not pretty. Yes, of course they tend to make money but that's what the bid-offer...
Sure maybe 5 want to take it up and 2 want to take it down, there will be winners and loosers. Doesnt mean that is doesnt happen.
The institutions are all running similar models though, built using the same maths, using the same correlations and inputs, so most of the time they are going to be going in the same direction.

Here is 30m EUR chart. See how they take it the wrong way in the low volume Asian session and then reverse it at Frankie/LDN opens when the volume kicks in.

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Davit Mar 27, 2018 1:43pm | Post# 1254

{quote} I'm an old school price action trader. "Futures" and "volume" data are some things you'd never find in my arsenal. (I have it... I just never use it.) In fact, I'm violently allergic to so-called traders who think volume data will make them money, and to those with their never-ending quest of finding institutional volume data like it's some kind of holy grail.
Its refreshing reading this since I think the same about volume.
" In fact, I'm violently allergic"

Calculus Mar 27, 2018 2:42pm | Post# 1255

{quote} Doesnt mean that is doesnt happen. {image}
I agree, of course they push the prices around some of the time in their favour, but it's a competitive market so there are many failures as well.

And for everyone who complains about the institutions why not try to use them instead of them using you (perceived or not). A simple strategy would be to observe when they're going for the stops, one of their standard plays, and then concentrate on the recovery if there is one. That would align your interests with theirs.

GoldenFinger Mar 27, 2018 2:58pm | Post# 1256

Sometimes, manipulation can also turn into real move as market is irrational. Besides who really know whether it is manipulation or not, sometimes it could be real move originated from unknown causes, as shown in some days where market move in one direction from asian to ny session.

the best we could do is to expect volatility/ change of direction when such times are approaching.

All in all, I think having a good grasp of immediate fundamental development, some technical chart reading skill (confluence in TA) and a prudent money management will help us to tame the market.

Personally, I find day trading hard enough, not to mention scalping (taking into account the cost and no real edge for small movement). It is also unjustified for me to trade long term with small capital (too little setup), currently day trading trend move is the best option.

All isolated scenario from my above questions are only meant for ease of discussion, in real trading, all elements should be combined to form an overall view of the market.

skenobi Apr 1, 2018 12:30pm | Post# 1257

Sometimes, manipulation can also turn into real move as market is irrational. Besides who really know whether it is manipulation or not, sometimes it could be real move originated from unknown causes, as shown in some days where market move in one direction from asian to ny session.
All moves are real, by the way, whether they are rational or otherwise.

Traders with a reasonable edge should just get it out of their heads that they "failed" to somehow read the markets "correctly" occasionally. Unexplainable anomalies are simply out of anyone's hands, and should just be hedged against as best as you can in all your trade plans.

the best we could do is to expect volatility/ change of direction when such times are approaching.
Correct.

All in all, I think having a good grasp of immediate fundamental development, some technical chart reading skill (confluence in TA) and a prudent money management
I don't put too much stock on that fundamental bit, so we'll just have to agree to disagree.

will help us to tame the market.
Markets can't be tamed. It's like riding a bronco. You just do it and hang on.

Personally, I find day trading hard enough, not to mention scalping (taking into account the cost and no real edge for small movement). It is also unjustified for me to trade long term with small capital (too little setup), currently day trading trend move is the best option.
I feel your pain.

All isolated scenario from my above questions are only meant for ease of discussion, in real trading, all elements should be combined to form an overall view of the market.
Do also account for elements that you don't expect or have never considered in your wildest nightmares.

Diyos Feb 24, 2019 8:47am | Post# 1258

I have question about Arbitrage trading. Is this type of trading applied between brokers which quote differently or it can done by trading different currency pairs?


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