By the way i am not owner of this thread. This is my idea. I respect to Michael.
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- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Why does the Bionic Candle work best in liquid markets?
Hello dear Bionic Traders,
Before I show more examples of how we draw zones with the bionic candle, I would like to cover one more important aspect. When the idea for the Bionic Candle arose 7 years ago, I initially only wanted to develop a candle that would show me the effective market strength.
What exactly do I mean by market strength?
We all know that only the big players can move the world's largest markets. And how do they do it? First, for example, in an accumulation phase, they collect a certain number of asks with the help of limit orders. In order to push the price quickly in the profit direction, massive market buy orders are shot into the market and at the same time the big player withdraws his previously occupied limit sell orders. As a result, the price shoots up quickly and the short traders' first stops are triggered. Now a chain reaction arises. One stop now triggers the next and the price keeps going up. This means that a rapid price trend is often only the result of triggered stops and has nothing to do with market strength. The actual market strength lies in the limit orders, with which a big player can stop a market at any time with iceberg orders. A high volatility only arises when the volume of the market orders is higher than the liquidity in the limit orders.
How does it work in practice? A retail trader sees a strong upward breakout candle and enters the market. At this point the spread is twice or three times as high because the best ask price shoots up while the best bid price remains. This is because, for a brief moment, little or no limit buy orders are being placed. The retailer is now entering the market 3-5 pips later. The big player is now selling the ask via market orders that he invested at the beginning of the outbreak candle. As a result, the market is running back and the retailer is stopped with 10 pip. Everyone knows this situation and has often been annoyed about it. So a big candle is a sign that many traders have been stopped out here. And big candles are only created in a phase when there is little liquidity. It is true that the market orders move the market, but only the limit orders of the big players determine when the time comes. In a car, too, the brake is always stronger than the accelerator pedal, which is known to regulate the engine power. If you step firmly on the brakes and apply full throttle at the same time, the vehicle will not move. The market orders are the accelerator and the limit orders are the brake. We recognize that it is not the fault of the broker that the spread widened significantly in strong upward or downward movements. As a scalper, you should deal with the spread in detail.
First of all, there is a target value that the broker is trying to achieve. This is also used for advertising. As an example, I have listed the six largest currency pairs in the world here. Next to the target value we find the average spread that any broker has passed on in a certain period of time. With the help of the Bionic candle, we are able to significantly reduce our spread. I'll go back to that in a moment. On the right, we see the cost of an expensive broker.
I don't trade in the off-peak hours because it would take me an average of 30 seconds to get into the profit with EURUSD. The average probability of loss is 62.5% and with an Risk-Reward-Ratio of 2, I would get 0.6 pip. In the main trading hours, Frankfurt, London and New York, I am already in profit after 15 seconds, the loss probability drops to 56.3% and with an RRR of 2, I achieve an average of 3 pip profit. And it is precisely this calculation that every trader should make individually for his situation. You can find the table for this on the first page.
Now take a look at the zones that I determined with the Bionic candle. When a price touch this zone, in most cases it will be strongly rejected in the opposite direction. Whoever opens a trade in exactly these zones is of course much faster in profit. In order to achieve a low spread, I have to enter before a possible breakout candle.
On the left you can see the EURUSD in the 8 tickchart, on the right in the M1 the same price trend. At the blue arrow in the tick chart, we find a lot of yellow candles in the upward movement, while in the upward movement in the M1 there is no yellow candle. A yellow candle shows: The close is on the high. In a market where there is little liquidity and a high volume, there is always a high level of volatility. In a high volatility phase, more blue and yellow candles appear in the bionic candle. The more of these candles are created, the more difficult it becomes to identify the crucial, strong zones in order to create the future key candle. Of course, high volatility will get you there faster. Since 90% of all traders lose in the forex market, most of them do not gain any advantage from high volatility. On the contrary, they lose their money even faster. For a professional trader this is a completely different story, but that only applies to the remaining 10%.
Regular, high volatility in an asset only shows that there are few or only smaller big players in the market. Because the big players work primarily with iceberg orders to disguise their real intentions. And these iceberg orders only exist in the limit Orders. The right big players avoid markets with high volatility, which can always be seen from the fact that the limit orders are withdrawn shortly before a FED meeting. For me, high volatility does not mean a strength, but rather a weakness in the limit orders. And since the limit orders determine the market in EURUSD, it is precisely these limit orders that are the key to success. Since the EURUSD has the highest liquidity, bionic candleworks best there. I can understand that some of my statements are incomprehensible to some traders because we do not receive any information about liquidity and volume in the forex market. For this reason, I work in parallel with stock market data in order to make my trading decisions. That means: the more volatile a market is, the less profitable the bio-nic candle become. That is why we start our project work with the EURUSD.
I don't mean to say that permanent, high volatility is bad. But it is unproductive for me because I am more of a safety-oriented trader than a risk trader. Since I want to keep my profits in the long term, I tend to look for markets that offer me exactly this security. We shouldn't discuss this, however, as every trader always has to take responsibility for his own profits and losses. The bionic candle thus concentrates indirectly on liquidity. And since the biggest big players dominate the market through their liquidity, the bionic candle indirectly pursues this institutional approach.
I wish you a successful trading day.
Kind regards Michael
Hello dear Bionic Traders,
Before I show more examples of how we draw zones with the bionic candle, I would like to cover one more important aspect. When the idea for the Bionic Candle arose 7 years ago, I initially only wanted to develop a candle that would show me the effective market strength.
What exactly do I mean by market strength?
We all know that only the big players can move the world's largest markets. And how do they do it? First, for example, in an accumulation phase, they collect a certain number of asks with the help of limit orders. In order to push the price quickly in the profit direction, massive market buy orders are shot into the market and at the same time the big player withdraws his previously occupied limit sell orders. As a result, the price shoots up quickly and the short traders' first stops are triggered. Now a chain reaction arises. One stop now triggers the next and the price keeps going up. This means that a rapid price trend is often only the result of triggered stops and has nothing to do with market strength. The actual market strength lies in the limit orders, with which a big player can stop a market at any time with iceberg orders. A high volatility only arises when the volume of the market orders is higher than the liquidity in the limit orders.
How does it work in practice? A retail trader sees a strong upward breakout candle and enters the market. At this point the spread is twice or three times as high because the best ask price shoots up while the best bid price remains. This is because, for a brief moment, little or no limit buy orders are being placed. The retailer is now entering the market 3-5 pips later. The big player is now selling the ask via market orders that he invested at the beginning of the outbreak candle. As a result, the market is running back and the retailer is stopped with 10 pip. Everyone knows this situation and has often been annoyed about it. So a big candle is a sign that many traders have been stopped out here. And big candles are only created in a phase when there is little liquidity. It is true that the market orders move the market, but only the limit orders of the big players determine when the time comes. In a car, too, the brake is always stronger than the accelerator pedal, which is known to regulate the engine power. If you step firmly on the brakes and apply full throttle at the same time, the vehicle will not move. The market orders are the accelerator and the limit orders are the brake. We recognize that it is not the fault of the broker that the spread widened significantly in strong upward or downward movements. As a scalper, you should deal with the spread in detail.
First of all, there is a target value that the broker is trying to achieve. This is also used for advertising. As an example, I have listed the six largest currency pairs in the world here. Next to the target value we find the average spread that any broker has passed on in a certain period of time. With the help of the Bionic candle, we are able to significantly reduce our spread. I'll go back to that in a moment. On the right, we see the cost of an expensive broker.
I don't trade in the off-peak hours because it would take me an average of 30 seconds to get into the profit with EURUSD. The average probability of loss is 62.5% and with an Risk-Reward-Ratio of 2, I would get 0.6 pip. In the main trading hours, Frankfurt, London and New York, I am already in profit after 15 seconds, the loss probability drops to 56.3% and with an RRR of 2, I achieve an average of 3 pip profit. And it is precisely this calculation that every trader should make individually for his situation. You can find the table for this on the first page.
Now take a look at the zones that I determined with the Bionic candle. When a price touch this zone, in most cases it will be strongly rejected in the opposite direction. Whoever opens a trade in exactly these zones is of course much faster in profit. In order to achieve a low spread, I have to enter before a possible breakout candle.
On the left you can see the EURUSD in the 8 tickchart, on the right in the M1 the same price trend. At the blue arrow in the tick chart, we find a lot of yellow candles in the upward movement, while in the upward movement in the M1 there is no yellow candle. A yellow candle shows: The close is on the high. In a market where there is little liquidity and a high volume, there is always a high level of volatility. In a high volatility phase, more blue and yellow candles appear in the bionic candle. The more of these candles are created, the more difficult it becomes to identify the crucial, strong zones in order to create the future key candle. Of course, high volatility will get you there faster. Since 90% of all traders lose in the forex market, most of them do not gain any advantage from high volatility. On the contrary, they lose their money even faster. For a professional trader this is a completely different story, but that only applies to the remaining 10%.
Regular, high volatility in an asset only shows that there are few or only smaller big players in the market. Because the big players work primarily with iceberg orders to disguise their real intentions. And these iceberg orders only exist in the limit Orders. The right big players avoid markets with high volatility, which can always be seen from the fact that the limit orders are withdrawn shortly before a FED meeting. For me, high volatility does not mean a strength, but rather a weakness in the limit orders. And since the limit orders determine the market in EURUSD, it is precisely these limit orders that are the key to success. Since the EURUSD has the highest liquidity, bionic candleworks best there. I can understand that some of my statements are incomprehensible to some traders because we do not receive any information about liquidity and volume in the forex market. For this reason, I work in parallel with stock market data in order to make my trading decisions. That means: the more volatile a market is, the less profitable the bio-nic candle become. That is why we start our project work with the EURUSD.
I don't mean to say that permanent, high volatility is bad. But it is unproductive for me because I am more of a safety-oriented trader than a risk trader. Since I want to keep my profits in the long term, I tend to look for markets that offer me exactly this security. We shouldn't discuss this, however, as every trader always has to take responsibility for his own profits and losses. The bionic candle thus concentrates indirectly on liquidity. And since the biggest big players dominate the market through their liquidity, the bionic candle indirectly pursues this institutional approach.
I wish you a successful trading day.
Kind regards Michael
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Jan 2012 | Status: Member | 1,037 Posts
Yesterday I was still thinking, oh my god, I hope you don't get confused with this new candle view.
Today I have already changed all of my templates in this regard and can more critically observe the chosen trading direction.
For me the colors (red, green) are: resistance, opponent or ... confirmation.
I hope this comes across correctly because my English ...
Next step will be to adapt the S_R. Let's see how that fits with my previous analyzes (so far I've been doing it from Month to M1; Pivot HL; size and duration of the price movement). I mainly trade H4, looking for correlated pairs. So it will take a while until I am finished with the new templates.
I wish everyone good success.
Today I have already changed all of my templates in this regard and can more critically observe the chosen trading direction.
For me the colors (red, green) are: resistance, opponent or ... confirmation.
I hope this comes across correctly because my English ...
Next step will be to adapt the S_R. Let's see how that fits with my previous analyzes (so far I've been doing it from Month to M1; Pivot HL; size and duration of the price movement). I mainly trade H4, looking for correlated pairs. So it will take a while until I am finished with the new templates.
I wish everyone good success.
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Yesterday I was still thinking, oh my god, I hope you don't get confused with this new candle view. Today I have already changed all of my templates in this regard and can more critically observe the chosen trading direction. For me the colors (red, green) are: resistance, opponent or ... confirmation. I hope this comes across correctly because my English ...
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
The optimal communication,
Hello dear Bionic Traders,
First of all, I am very happy that our project has been very well received and for that I would like to first of all thank you very much. A few days ago, Forex Factory's membership exceeded 1 million. Many traders from different nations and countries exchange ideas in many threads to help each other. Each of these individual people went through different development processes. It starts with upbringing and schooling, continues through training or studies and ultimately leads to an individual life experience. In addition, there is the barrier of different languages, which can quickly lead to misunderstandings. So that we can make efficient progress in this thread, I would like to give you some tips so that we can all understand each other better in the future. During my German school education I learned English and French, but as we know, there are special trading terms that you obviously don't learn in school. In principle, one can understand complicated issues best in one's native language, of course. I know that many traders copy the text from Forex Factory in order to translate it afterwards. But this can also be achieved much more easily.
It is best to use Google Chrome for this, at the arrow A you will see a symbol, if you click on it, you can display entire websites in your individual home language. Then you don't have to copy out individual texts in order to have them translated.
It looks something like this, in this case the English text has been translated into German.
If you are new to English and would like to answer in English on this blog, the best way to do it is as follows.
Point A
First write the text in your home language and then have the Google translator translate it into English.
Point B.
Now copy the English, translated text and paste it into a new Google translator.
Point C
You can now have this English text translated back into your home language to check whether your statements can be understood correctly. If there are translation problems, you have to correct these errors individually. This means that there will be fewer misunderstandings in the future.
My videos that I posted on the first page of this thread are all in English. If you press the symbol at Point A, you will first switch on the subtitle on YouTube. Now press the gear symbol under Point B. There you can now individually set your home language. Then the spoken text appears in your home language. Of course, there can always be translation errors, but it is crucial that you understand the most important things. One little thing is still dear to my heart. I started this thread voluntarily and free of charge with no commercial background and am ready to invest my time to get better together with you. I do not want any recognition for this, but together with the administration of Forex Factory I will ensure that extreme members who stand out due to inappropriate behavior are completely banned in the future. I also ask you to help keep this thread clean, always in a polite manner, of course.
I hope that these ideas simplify many things for you and I look forward to a further, constructive, fair and friendly exchange.
Kind regards Michael
Hello dear Bionic Traders,
First of all, I am very happy that our project has been very well received and for that I would like to first of all thank you very much. A few days ago, Forex Factory's membership exceeded 1 million. Many traders from different nations and countries exchange ideas in many threads to help each other. Each of these individual people went through different development processes. It starts with upbringing and schooling, continues through training or studies and ultimately leads to an individual life experience. In addition, there is the barrier of different languages, which can quickly lead to misunderstandings. So that we can make efficient progress in this thread, I would like to give you some tips so that we can all understand each other better in the future. During my German school education I learned English and French, but as we know, there are special trading terms that you obviously don't learn in school. In principle, one can understand complicated issues best in one's native language, of course. I know that many traders copy the text from Forex Factory in order to translate it afterwards. But this can also be achieved much more easily.
It is best to use Google Chrome for this, at the arrow A you will see a symbol, if you click on it, you can display entire websites in your individual home language. Then you don't have to copy out individual texts in order to have them translated.
It looks something like this, in this case the English text has been translated into German.
If you are new to English and would like to answer in English on this blog, the best way to do it is as follows.
Point A
First write the text in your home language and then have the Google translator translate it into English.
Point B.
Now copy the English, translated text and paste it into a new Google translator.
Point C
You can now have this English text translated back into your home language to check whether your statements can be understood correctly. If there are translation problems, you have to correct these errors individually. This means that there will be fewer misunderstandings in the future.
My videos that I posted on the first page of this thread are all in English. If you press the symbol at Point A, you will first switch on the subtitle on YouTube. Now press the gear symbol under Point B. There you can now individually set your home language. Then the spoken text appears in your home language. Of course, there can always be translation errors, but it is crucial that you understand the most important things. One little thing is still dear to my heart. I started this thread voluntarily and free of charge with no commercial background and am ready to invest my time to get better together with you. I do not want any recognition for this, but together with the administration of Forex Factory I will ensure that extreme members who stand out due to inappropriate behavior are completely banned in the future. I also ask you to help keep this thread clean, always in a polite manner, of course.
I hope that these ideas simplify many things for you and I look forward to a further, constructive, fair and friendly exchange.
Kind regards Michael
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Your thoughts on these zones please I havent marked out the obvious ones at the bottom {image}
Hello Tradelive, could you please post the chart with the yellow and blue candles to first make a comparison? Thank you Michael
Forget: "That does not work," amateurs build the ark, pros the Titanic!
- Joined Jan 2012 | Status: Member | 1,037 Posts
[quote=Bionics;13759019]The optimal communication ...
Same Translationtool for Firefox too
Same Translationtool for Firefox too
- Joined Dec 2017 | Status: //houston ǝʍ have a probl | 2,176 Posts
Not all zones are unambiguous and clear to me, but I've drawn them all in anyway. It is much more important to first determine the zones in the past in order to get to know the Bionic candle. Greetings Michael
Forget: "That does not work," amateurs build the ark, pros the Titanic!