DislikedKeep studying man..I'm doing the same thing. The one common link that connects these orderflow guys is a strong understanding for market microstructure. They know all the little intricacies that a lot of us dismiss as un-important. Obviously we have some learning to do. Gaston said once, that all the information we need is out there, we just need to dig for it a little. I ordered a book that both Gaston and Darkstar both mention, it's called "market microstructure for practitioners" by a guy named Larry Harris. It was a cool 50 bucks, but totally...Ignored
DislikedOne other thing that unites these guys is the notion of taking out peoples stops. I don't know if Gaston mentions this, but both darkstar and skfx obviously do. Also, Darkstar revels a little bit about how he trades that leads me to beleive he only trades setups where he can take stops out. I say this because in one of his posts he mentions that he only trades 3-5 times per month while risking 12.5%. Also, in many of his essays on microstructure, he plays the stop hunting example a lot. I cannot say at this point with clarity what events he is watching,...
Yes - think of why this is important. It is NOT the few pips gained from a stop hunt. That chart I posted yesterday is about as pure a stop hunt you'll ever see. Look at what it fueled. And more importantly - where. And notice the white space...
DislikedThe main question I am running into right now is the source these guys are using for their infomation about existing open orderflow. Again to pull from darkstar, in one of his posts he mentions IFR Forex, a service that publishes this kind of information, he even quotes peices of the info a couple times. The info is obviously out there, these guys are getting it somewhere. We'll find it.
There is no single pure order book in Forex that I am aware of. One bank will not share theirs with others. I have not looked into the IFR service, but perhaps a free eval might tell me what it provides. I can tell you this - you do not need it to be very successful.
DislikedI stated above that darkstar trades a few times a month. I was glad to find that information because it answers my question that I was asking skfx about reasonable returns. With this style of trading, there is more certainty of outcome, which allows one to risk more, but you trade less often. This is important for us all to understand at this point. I'd be surprised if these guys could open a chart (or whatever) and tell you 100% of the time where price is going. Don't get me wrong, I am not bashing the system, just calling it what it is.
What I know they are doing is looking for as close to a sure thing as they can get. It is possible to do this, but it takes a lot of self control to wait for price to reach those areas where orders are likely piling up. You can front run these areas with a touch trade and a fairly short SL, but you'd better practice that for a good long time first.
DislikedOne more thing. If you look the charts skfx posted, and the direction price goes in the areas he points out, what does it make you think of? Simple S/R right? Go through his examples and you'll see it. If you go through and look, you would have been going the right way if you were trading the S/R correctly. I used to be a fib maniac, still am in ways, but I threw them all in the trash after i commited myself to learning simple S/R trading. I've been making a consistant 5% weekely for some time now doing this.
I'll have to survey skfx's stuff. Always ready to learn from a good trader. No one has the corner... James16 traders are all about S/R as well. Those are very high probability areas. It works on all time frames.
DislikedI am working on some of my own essays about order types and what they do lately. I'll post them when they are done. Some great insights to come guys. We can crack this thing.
I'll read it!
DislikedHave a fantastic weekend everyone,
You too! It is nice to see people willing to dig into a matter. Most come to trading thinking that a system will get it done.
I call them liquidity.
I'm pretty much done with all this ...