The Equilibrium, a key to success!

Equilibrium 2 year anniversary


Hello dear subscribers,


On Jan 4, 2018 I published my first post on Forex Factory. A lot has happened in the past 2 years. I uploaded 790 posts with 350,000 words that would fill 1264 different A4 pages, 1379 pictures that I created and 120 files (indicators, Excel and PDF files). Over 130 subscribers have joined this blog and I would like to thank these great people for their cooperation and loyalty.

Actually, this blog is only 1.5 years old because I did my master's degree in Java for 6 months (2000 hours) in order to better understand indicators. In total, I wrote 4 books at Forex Factory during this time, it took a lot of time, but it was worth it. As I have written before, this blog was created solely to write my own trader diary. It is incredibly exciting and interesting to go back and see what I thought 2 years ago. My basic attitude towards equilibrium has not changed to this day, but I have made significant progress in my personal development.

I would like to summarize this development of the past two years and emphasize the most important points.

I started gaining my first experience in the Forex market over ten years ago. Indicators determined my daily routine and in the first few years, I concentrated solely on using and trying out different indicators for my trading. None of the more than 1000 indicators could make my view of the markets easier. Finally, I found that the price chart (candles) is the fastest indicator. So I concentrated primarily on the price chart and started to deal with supply and demand. It struck me that the big players within an equilibrium were relatively tame and I started to trade within these zones. Since I could only reach an average of ten pip within one equilibrium, I finally decided to become a scalper. With this I managed to trade profitably for the first time and started to optimize my stop and money management. Every now and then I caught a breakout and was sometimes able to take longer-term trends with me. I was able to reduce my stops to 0.5 pip.

With the Trader diary at Forex Factory, I first tried to explain to myself why I was able to trade profitably. I had the idea for a new candle display a few years earlier, which I was able to realize with the help of Georg (Bionic candle). This gave rise to the idea of graphically displaying supply and demand zones on the chart. This gave rise to some projects that I was able to implement with the help of my Java knowledge in the form of indicators. Through Forex Factory, I learned to focus more on the currency strength, which has helped me in many areas. This information and projects have helped to increase my efficiency, but as a trader you are never satisfied. Concentrating on the tickchart, I began to deal with the volume, dealt more intensively with the big players and went to Switzerland to speak to a high-frequency trader. I looked closely at how these high-frequency traders work and knew that this was only possible with specific stock market data and professional software. I first got stock market data and compared the Forex market with the Future market. The price development was tick exact and now I was looking for a professional software with which I was able to translate the stock exchange data according to my specifications. At the same time, I dealt with the strategies and working methods of the big players in order to better understand them.


My previous findings:


The forex market develops in parallel to the future market, the price difference arises from the swaps.






The forex market is approximately 100 times larger than the future market, we can assume that the dome in the forex market is approximately 100 times the dome in the future market. Liquidity is significantly higher in the Forex market, so I only trade in the Forex market with the proviso that I only refer to the future data.

The reason why 95% of all traders lose is due to the fact that the big players and brokers manipulate the prices and a retail trader is unable to grasp the complexity of the market due to his emotions. The intent to dominate the market with the help of an indicator or EA is a hope that dies faster than a mayfly. The big players who dominate the market have only one goal: to make money. That is why you are ruthless and brutal in this market. My resistance zones, which I have drawn within the equilibrium, have worked, but were initiated by the big players in order to implement their strategies. Since I only acted as a scalper in the Equilibrium, I have rarely been stopped or fallen into their traps. That had more to do with luck than experience.

I am now more of the opinion that there are no trends, resistance zones or predictable price trends. There is supply and demand, but this is primarily determined by the big players. Of course, the big players are trying to catch the traders' stops, since there is the greatest liquidity to buy bid or ask. However, this information is withheld from forex traders, as the forex market does not provide this information. This market is always about information benefits. The quickest to recognize what the big players are planning is also the quickest to follow them. Due to the high investments in the Forex market, you don't even attract attention. Many traders develop a setup and as soon as they trade profitably with it, this setup remains the same. The problem with this is that the market is evolving so quickly these days that this setup loses profitability one day.

As traders continue to develop in this market, the big players must also oppose this development. The big players are able to accept greater losses just to mislead the masses. New strategies are constantly being developed to confuse dump money. This development will worsen drastically in the next few years. Even if it were possible to visualize the stops of the individual traders on a chart or to ask the question which highs or lows will be taken out next by the big players, this will not help us in the long term.

Of course, we already have a clear market lead with this information, but the crucial information that we need is far more diverse and demanding. If we work with the bid and ask indicator in the future market, we will find that a lot of different orders are placed in the course of a day. An ask can stand for a euro buy or a dollar sale and a bid can stand for a dollar buy or euro sale.






My approach goes in exactly this direction. I would like to know what is happening in the market right now. Is the euro / dollar being bought or sold and if so, in what number. Is it a purchase that can be seen officially in the order book or a secret purchase that is to be disguised? Are traders triggering stops or is a big player pushing the price down? I can read out all this information directly with my software and even display it in the chart. Incidentally, this is not as complicated as it looks at first glance.






First, I would like to show you an example. On the left side we see the EURUSD in the Forex market from 03.01.2020 between 13: 30-18: 00 CET. After the course has reached high around 18:00 CET, the procedure of the big players is understandable. However, it is too late to benefit from it.

On the right side we see the Euro FX in the same period, with an individual filtering to differentiate between bid and ask.

Point A
We see that a participant, with small batches of lot gets out of the euro, at the same time larger lot bids are bought. This gives indications of a falling course.

Point B
The euro is heavily bought on the high point, with most lots being bought in small numbers.

Point C
The price is first pushed down to stop the market participants who also bought the euro from Point B. It can be clearly seen that few participants were stopped at this stop run.

Point D
After the attempted stop run, the course runs again to the high of Point B. There, a considerable amount of Ask is secretly bought again in small numbers. We have to keep in mind that the euro was bought in massive quantities at almost the same price level. This gives an indication of a possible course upward.

Point E
We see a big player exit the euro and at the same time another make a larger euro purchase.

Point F
The price is pushed massively upwards and a larger bid order is placed on the high point.

Point G
In the course of the breakout up to Point F, many retail traders have entered the euro. These traders are now gradually being stopped. At Point G you can see how the individual stops are triggered.

Point H
The course initially continues to go up and at Point H there are larger buys of euro purchases. It can also be seen that some larger players are getting out of the euro and are already starting to buy the dollar.

Point I
The price is initially pushed up again and some big players exit the euro. At Point I you can see a small stop run, then the course runs down 30 pip.

I noticed that the big players, who secretly buy larger quantities of bid or ask with the help of algorithms, determine the medium-term price in most cases. Of course, big players also make bad investments, but these usually take the form of larger lots that everyone can see in the order book. The trick is to see the course in the submission of bid and ask in the right context. This can be used to derive significant market advantages.

Since the forex market behaves parallel to the future market, you can assume that the information I get from the future market is absolutely correct. The key is to filter the information so that it can be logically understood in order to predict future movements. The only problem scalpers have is the fact that the big players are not scalpers, but rather oriented towards the medium to long term. This requires a rethink in money management, risk management and stops. Based on my information, however, it is also possible for scalpers to act more efficiently. If you can clearly see what is currently happening in the market, you are able to use this situation to your own advantage.

And that's exactly what 2020 will be about. We only trade in the Forex market, because it has the highest liquidity. However, we may not base our trading decision on the forex data, but only on the future data. Using complex filtering, we are able to tell whether the euro is being bought or sold, and whether the dollar is being bought or sold. With this information, we can also make a decision more easily in which direction a possible course will develop.

In the past few months, I have found that I was able to detect the manipulation of the big players much faster, so that I could place my capital in the right direction. Restricting yourself to the pure course of the Forex market is, in my opinion, suicide. We are therefore unable to determine whether a large number of ask is being bought on a high or whether only the trader's stops are triggered. And this information is crucial for a further course up or down. I don't want to say that I have already found the optimal filter setting to exactly determine the euro / dollar buy or sell, but I started with it. Of course, I will share my findings with you and keep you up to date. However, you have to coordinate your setup with yourself in order to achieve a trading advantage. I am convinced that 2020 will be a particularly exciting trading year that we can all look forward to and I believe that we will take a big step forward in this blog.

Thank you for your support and a successful 2020.

Lovely wishes
Michael

Randomness of a course

Hello YYZ,

You asked a very important question, the correct answer is: The course consists of both manipulated and random movements. The liquidity in the market is provided by the buy and sell limit orders. However, the price moves solely by placing the market order. Once a limit order has been absorbed, the price goes up or down a tick. It depends on which market order it is (bid or ask). If several ask market orders fail to absorb the sell limit order in the market, there could be a big player behind it, absorbing all market orders and then pushing the price down. We know that smart money essentially moves the course. As long as a big player is in the market, he will have a corresponding influence on the course of the price by controlling him and only intervening in certain situations. But there are trading hours where there are few or no big players. During these times the course runs uncontrolled and is therefore rather random. The price cannot be 100% controlled, because sometimes big players act against each other. In the main trading hours, we can assume that the big players are driving prices in their direction, but due to the different market orders and liquidity, there is always a coincidence that cannot be controlled. I appreciate that the course is therefore more controlled than it random. This is advantageous in any case, because if a course is less random, it can be calculated in certain circumstances. To do this, however, we need to know exactly which orders the big players have in the market to follow them. And that's exactly what this blog will be about in the next few months.

I wish you a nice weekend
best regards

Thanks Michael for great insight... I will closely follow you forever! kk
///
I always doubt that BigPlayers algos/ hidden techniques allow them to hide their orders/activities in the OrderBook/DOM that still remains secrets for small money? ... and the way they interact wih the market is significantly different with the way small money does everyday ... so as small fishes we cant understand them by just analyzing the well-known way of executing oders like normal Market Orders or normal Limit Orders? ... but their acitivities still leave high impacts that re not fully explained.
How is your opinion? ... of course above is just my view & im totally new to this subject kk

Good Day all!

Iceberg orders

[quote=aPhong;12690241]{quote} Thanks Michael for great insight... I will closely follow you forever!


Hello aPhong,

I am very happy if this blog brings you insights to get ahead. As you wrote correctly, no trader is able to interpret the activities in the market 100% correctly. In order for there to be a movement in the market, there must always be a buyer and seller. First of all, the sell and buy limit orders are in the market and thus provide liquidity. The market orders move the market in that the ask market oders hit the sell limit orders and the bid market oders hit the buy limit orders. The lower the liquidity and the larger the market orders, the sooner the price moves in the corresponding direction. The challenge lies in decrypting Bid and Ask as I described in my last post.

Equilibrium 2 year anniversary

Since the big players move very large sums in the market, you have to collect their ask and bid in the accumulation and distribution phases. So-called iceberg orders are used for this. An iceberg order is a limited buy or sell order where the actual volume is not clearly visible in the open order book. The iceberg or is used to reduce the risk of a strong price movement while concealing your own strategy. Of course, iceberg orders can be identified with every time and sales list, the problem is that a lot of smaller iceberg orders come onto the market every day and cannot be clearly assigned to a possible strategy. There are several possible solutions, a pictorial representation of the iceberg order on the chart or the identification of bid and ask in combination with liquidity. With the right filter setting, you are able to identify a possible course of action for the big players. It is precisely this topic that we will deal with in more detail in 2020, which can significantly improve our profit ratios. I will publish many examples about it in the coming months.

best regards

Hi,Bionics.I like your system.
How to confirm trend when equilibrium? Up or Down ?I dont understand how to use your Bionic Dashboard?
please Help.Thank you.

The unvarnished truth



Dear flashlj2008,

First of all a warm welcome, I am very happy that our blog will help you.





My current dashboard has the task of providing me with important information from the forex market that I do not get in the future market. Primarily, it's about currency strength, current ATR, the spread, and upcoming meetings that can affect volatility. This dashboard has to be compared to a speedometer or tachometer in the car, it shows me how the engine is running and how high the speed is, but not where I am driving. For this I need a navigation device and I only get this data from the Future Market. In principle, this dashboard is a confirmation of my assumptions, which I derive from the future data, but I would never make a trading decision from the dashboard. If you work through this blog from the beginning, you will find many ideas and clues that will save you a lot of time. And time is the most precious commodity in this business.





As we know, the big players are the secret trendsetters in the market, they basically drive the price in the direction where it has the most liquidity. These are the zones, where most of the trader's stops are. In these zones, the big players are able to eliminate followers and at the same time find enough liquidity to absorb bid and ask. The whole game is designed to do exactly the opposite of what most traders expect. This is the only way the big players can ensure they win $ 400 million a day. See my late December report:

The new generation of traders

If you only work with Forex data, I recommend that you do not use a normal candle display and time display. The most successful traders in the world do not work with green and red candles in the chart, with no time representation as we retail traders know it and also not with footprint charts or the volume profile, but with data that show them the liquidity in the market. In the futures market, this is exclusively the DOM and the time and sales list.

A trend in equilibrium can be determined primarily from the range that takes place within an accumulation or distribution phase. However, the time and sales list is a crucial tool for this. With a pure look at a Forexchart this is very difficult and can only be mastered with a long experience of at least 6 years or 14,000 screen hours. If you want to shorten the time to success you have to deal with the trading instruments of the professionals: the cathedral and the times and sales list. Check out the big player screens on the internet, you will very rarely see a chart like most forex traders use and you won't see a single indicator.

In the Forex market, you can trade profitably with the pure price chart in the long term, but this usually takes 5-6 years and most of us do not have the time to hold out as long. Most full-time traders give up after 3-4 years, even though they are about to make their big breakthrough. So there are only two ways to succeed. You have enough capital for the next 6 years to survive in the Forex market or you start to act like the professionals. I took the first and more difficult route, but the second route is much more efficient.

I will post a detailed report in the next few days, I think it will help you. I keep my fingers crossed for you and wish you continued success.

best regards
Michael

The unvarnished truth


Hello dear subscribers,

today's headline does not bode well at first glance, because when it comes to the truth, things are often brought up on the table that one would prefer not to hear. Nevertheless, the truth is important in order to avoid decisive mistakes in the future. In the last 11 years I have spent 40,000 hours in front of the screen and made a lot of mistakes in the beginning. Of the total brokerage fees of the past 11 years, I could have bought a single-family home. The first 5 years were the hardest and if I hadn't had the reserves and a woman standing behind me, I would no longer be a trader. In addition, I was lucky that my initial losses were relatively small, but that was because I was almost exclusively an equilibrium trader. On the subject of experience I found a nice picture in Forex Factory.





I had a typical beginner start, with trading books, trading magazines, information from the Internet, countless indicators, market information and news. From the start, I didn't use signaling devices, trainer EA's or binary options. I immediately plunged into the Forex market and specialized in EURUSD over time. At that time, the EURUSD was still at 1.60. Before I started Forex, I used to earn above average as a self-employed person, so I was not greedy or scared when I started trading. I knew that it could take 10 years for it to pay off and I tried to reach this goal faster. Would I go the same way again if I had to start over? Definitely, but I would take some shortcuts and that's exactly what I want to talk about today.

The first 5 years were so difficult because I concentrated exclusively on the green and red candles and different indicators in the time chart. Finally, I deleted most of the indicators on my chart and only one indicator remained, the price chart.





What we see here is the market, but not as institutional traders see it. In market technology, technical analysis and chart technology, clear strategies for profitable trading that are widely used are often recommended. A fixed set of rules within a strategy is completely pointless since the markets are constantly changing. The understanding of the market is based on the historical course of the courses and the price. And that is exactly the mistake we all made in the beginning. This presentation of the market is incomplete because there is missing the liquidity and volume. And these two points are the only reason why the course is moving. And precisely these crucial points are ignored by most traders. For this reason, over 90% of all retail traders lose their money in the long term. Let us first ask ourselves three important questions!

Who are the most successful traders in the world?
12 banks that control 85% of the interbank market.

Where do the world's most successful traders trade?
In the Forex market, which turns over $ 6 trillion a day, $ 1.8 trillion just the EURUSD.

How do these most successful traders in the world trade?
With liquidity and volume regardless of charts or a fixed time unit.


Conclusion:

To be successful, we should do exactly what the world's most successful traders do. We should trade in the forex market and base our decisions on liquidity and volume. That's all. But this inevitably means that we should say goodbye to our old trading habits and have to rethink. It was exactly this step that I started a year ago when I was working on the first tick charts. These tick charts finally gave me an understanding of the volume and so I was able to expand and apply my new knowledge very quickly.

Whether we trade in the future or forex market, in both cases this is done through a broker. While the futurebroker forwards the order directly to the stock exchange, this is not always the case with a market maker. The rumor is that market makers manipulate prices and trade against your customers. This may be true in some areas, but a market maker must also take a counter position in order to hedge against risks. To make sure that the order is invested in the market by the broker, you have to contact an ECN or DMA broker. However, costs such as fees and spread play a major role here. The crucial point is that your broker must protect you from a negative account balance, especially if you are a professional trader. As a futuretrader, you do not have this advantage because you have to clear all negative accounts immediately. In the event of a strong outbreak, it can cost your entire fortune. Liquidity in the forex market is 100 times greater than in the futures market, so execution in forex is significantly better.

In the Forex market you can work with the well-known MT4, although I prefer the MT5 for trading because it has significantly faster execution times. I recommend finding a forex broker that offers both versions. You should work with a mini terminal that immediately sets a stop or TP when you place your order. In order to avoid losses due to gaps or unforeseen price developments, one should rely on limit orders. You should use the MT4 for currency strength, spread, ATR and information about meetings that could increase volatility. In addition, I recommend displaying the price range in the form of a ZigZag in order to identify the liquidity that is achieved through the stops of the traders.





The key data on liquidity and volume can be obtained from the future market. The Price Leader Depth Of Market (DOM), which shows the number of limit orders at each price level, shows the announced intentions of the traders to trade at certain prices. Of course, this information changes from milliseconds to milliseconds when orders are stacked and dragged on both sides of the market to make changes in trading. First you have to understand the basics of the DOM. Here is an example.





This video covers the absolute basics of order flow. It explains what is shown on the DOM (a.k.a. depth of market, ladder, order book, depth and sales).





Then it is about the basics of the time and sales list and the spread tape in combination with the DOM. It is important to understand how market orders meet liquidity, identify absorption, see iceberg orders in the right context and assign the different orders (bid and ask) to the relevant key factors. In the EURUSD you should know whether an ask is buying the euro or selling the dollar and whether a bid is buying the dollar or selling the euro. While this is a major challenge that cannot always be conclusive, in the end we get very important information about it.

As an institutional trader who places an order for more than 10,000 contracts on the market on behalf of a commercial customer, you cannot simply buy 10,000 contracts on the market. Your intent will be visible and it is unlikely that there will be enough liquidity to allow you to buy this size at the desired price, so the order will need to be worked into the market. Algorithms ensure that the target quantity is reached with several smaller orders. In addition, larger sell orders are placed in the market at the same time, which give the impression that the market wants to go down.

Some traders think they will have the ability to drive sales and sell at lower prices than the sales order backlog. In fact, they sell to the dealer who wants to buy. As the market moves up and down, as long as they sell less volume than they bought, they slowly build their long position and may improve their average purchase price by selling small quantities at higher prices while selling larger quantities at lower ones Refill prices. As soon as they have reached their goal, a stopfishing could eliminate potential followers and the price is pushed up. The volume delta and open interest are helpful for this.





We know that the market orders move the price by eating up the limit orders or being absorbed by you. A market order can only be recognized as soon as it can be seen in the market. Of course you could then assign them to the key factors, but that's already the past. The limit orders, on the other hand, represent the future, because it shows the willingness of traders to trade at a certain price level and at the same time to make liquidity available to the market. Of course, limit orders are permanently added or subtracted to the market (spoofing), but with the right software this can be recognized immediately. In my opinion, liquidity is a much more decisive factor than volume, partly because it shows the future better and partly because the big players are only on the hunt for this liquidity in order to be able to complete their projects faster and more efficiently.





The reason why prices are zigzagging is because the big players are trading from liquidity to liquidity. The stops of the different dealers play a very important role here. Since I was often stopped out as a beginner, I always thought that the big players were targeting my stops. The truth, however, was that I placed my stops where most retail traders had their stops. As soon as the stops are triggered, enough liquidity is available to buy the Bid and Ask unnoticed. Another advantage in Stophunting is that potential fellow travelers are eliminated beforehand. Because a market participant who is already invested in the market no longer helps a big player to drive the price up or down, but he could be a major disruptive factor in the future as soon as he gets out of his position. At this moment, the course of the Big Player's course is slowed down. Of course not with a single trader, but many traders together also result in large positions.

The EURUSD in the Forex market has the largest liquidity of all markets with a daily sales volume of over $ 1.8 trillion. A currency is liquid if you can buy and sell large quantities of it at any time without the market price of the currency changing significantly. A large amount of liquidity usually hides many buyers, sellers and numerous market makers who continuously report buying and selling prices. This is one of the reasons why the EURUSD has not suddenly moved up or down 2000 pip in secondsuncontrollably in the past 50 years. This is why it is crucial for me to trade in a currency that contains a high level of liquidity. Of course I am not able to move the market as a small retail trader, but that was never my intention.





The footprint charts have just received a lot of attention in recent years and for a Forex trader who is facing this for the first time, this representation seems to be the holy grail. However, I cannot recommend paying too much attention to these footprint charts, because any absorption that we see there is immediately eliminated by switching to a different time unit. Profitable trading is therefore only possible to a limited extent. Even a volume profile only gives us half the truth, since the volume represents the overall result of bid and ask. Absorption in the form of iceberg orders cannot be identified with this. Of course, it is helpful to identify possible resistance zones, but only with the help of the possible liquidity zones will I be able to determine whether these resistance zones can be broken.

We have to think the work of big players as a swimming pool that is 1 mile long. A big player cannot completely dive this mile because he would run out of air in between. At the bottom of the swimming pool, there are small and large oxygen bottles on the right and left, which the Big Player try to reach, to receive this valuable oxygen. So he zigzags the 1 mile by always reaching for the zones where he may get the most oxygen. And this oxygen is comparable to liquidity. So we should always ask ourselves where the greatest liquidity is at the moment in the market, then that will be exactly the zones that the big player is heading for next. It should be clear that the candles do not help us here, but possibly the turning points in the chart, since the individual stops of the traders can be found there.

The dramatic thing about this market is that the big players are always one step ahead of us retail traders. Since 2016, the big players have started to make partial volumes from the forex market available to other institutional traders through CLS for high fees. This gives institutional small traders a clear advantage over retail traders.

Real volume in forex

In recent years there have been more and more brokers that provide larger traders with algorithms to strategically place different orders on the market, e.g. Icebergorder, Basket, Bracket, Fill or Kill, TWAP and many more. A broker offers up to 100 different algorithms that you can integrate into your own software. That means the smaller institutional traders are starting to upgrade. Of course, the big players have to reorient themselves and program higher-quality algorithms in order to continue to realize their profits.

The loser in this upgrade competition is clearly the small retail trader, as he cannot keep up with this technology. This suggests that the market will be even more difficult to trade in the coming years. For this reason, it is all the more important to say goodbye to the information provided in the past on indicators, strategies, market technology, technical analysis and chart technology. If you do not make this jump now to devote yourself to the information that enables profitable trading, you can no longer be successful in this market in the long term. The current development on the markets will bring about a significant change and at the same time a reduction in the number of traders. The traders survive who adapt to market conditions. Brokers, if you notice that more and more customers are missing, may also develop new strategies to make their customers profitable again. That could mean reducing spread or using algorithms, but I wouldn't bet and wait for that.



However, this requires a complete rethink and a lot of time to create a completely new setup. The time is therefore favorable to prepare optimally now so that you can continue to act profitably in the future. When we think of the dinosaurs it becomes clear that only those who have adapted to the new circumstances have survived in the past. I don't think we have much time left until the algorithms catch up. It is for this very reason that in 2020 we will deal with the crucial points of rethinking in this blog. Every entrepreneur, regardless of whether he is a lawyer or a doctor, has to undergo regular further training after his studies and may also have to completely rethink. This is the only way to guarantee his right to exist. If you want to be successful, you have to remain an eternal student, there is also a nice quote that has often helped me.

Success is like rowing against the tide, as soon as you stop, you drift back.

Change brings uncertainty because you have to leave your safe terrain. Perhaps there will be some fear at first, but those who recognize and take advantage of the opportunities will be and will remain successful in the long term.

I wish you the strength to do the right things and good luck in the future

Lovely wishes
Michael

Michael,

Your last post (1227) is a complete trading course in and of itself! The information you have shared throughout this thread is priceless.
Once again I agree with you that liquidity and volume are key to trading success. Thanks for sharing.

Setups with algorithms

Hello YYZ,

First of all, thank you for your opinion, which I absolutely respect. Every trader has to create his own setup over the years with which he is able to trade profitably. The examples from my last post are only a different representation of the volume and liquidity that were generated from current stock market data. The big players and high-frequency retailers work with similar representations, but are even more professional and complicated in their approach.

It is completely understandable that this view appears confusing at first glance, the same phenomenon occurs when you switch from an car cockpit to an aircraft cockpit. In a car there are only two dimensions forward, backward, right and left, while in a aircraft there is a third dimension: up and down. In the Forex market you can only trade with the price and the time, in the future market there is also the liquidity and the volume. Therefore, the presentation initially appears to be very complex. Driving a car is not as demanding as moving an airplane, so it takes 10 times as long to get a flight license. In the end, the aircraft moves 10 times faster in the air than a normal vehicle. The question is whether you want to stay on the ground by car or take off on an airplane to reach far-away destinations much faster. Neither of the two modes of transport is better or worse, it is only just different. Since the future data is much more complex, it also takes much longer to deal with it.

You are absolutely right in saying that the buy market order meets the sell limit order to buy in the offer and the sell market order meets the buy limit order to sell in demand. And the process you mentioned is the decisive reason why the markets are moving. Unfortunately, there is a crucial disadvantage: You cannot see this representation in the Forex market. If you trade the price and the time in the Forex market, you have to make assumptions about why the price is moving, in the stock market you can see the real reason for this with facts. Incidentally, that is the only reason why the world's most successful traders, who turn over $ 5 trillion a day, only trade in liquidity and volume.

The truth is only what we see ourselves.

I wish you a nice weekend and good luck next week

best regards

Liquidity and volume

Hello corinthia,

First of all, I am very happy that this blog provides you with important information that will help you in your daily business. In my last post I tried to describe important key factors that I think are crucial to be profitable in the long term.

The unvarnished truth

The key to success is always a custom setup. This setup is tailored to every trader, like a second skin and cannot be replicated by other traders. This is the most difficult job, which can sometimes take many years. Everyone is different and recognizes different things within numbers or forms that cannot be explained. I have found that I can immediately record and implement the very rapidly falling price advertisements in the Times and Sales list or in the DOM, which is why I work with them. Many traders cannot do anything with it, so the DOM will not be part of their setup. Your compliment confirms to me that this blog is a buffet where every trader can take out the things that are essential for him and do without the things that do not help him. Some people who help themselves to a free buffet get upset about certain dishes that they have not even tried. I think your attitude to it is very good, you are happy about the offer and implement it, which is why it will also bring you further. I am aware that at first glance my approach seems unconventional, what is decisive is which data allow which interpretations, which lead to a satisfactory result in the end result. This will continue to be the claim of this blog in order to bring all subscribers an advantage in the trade.

I sincerely wish you continued success

best regards
Michael

Hello Bionics

Thank you for time and respond.

With lack of knowledge , time and money I have to stick to assumptions...To certain degree trading based on assumptions is based on another assumption that trading is not random....manipulated but not random.
for those willing and able to take path using volume and liquidity your thread is good start point to everyone since you are willing to invest your time to explain and help others...

Strategy for a successful trader


Hello YYZ,

Thank you for your contribution, I find your question very important and interesting. First of all, we should separate a lack of knowledge, time and money, because these points should be considered independently. It is perfectly clear that a beginner has little time and knowledge because he earns his income from his main job. Let us leave the trading area for a moment and imagine that a person is dissatisfied with his job and wants to do a completely different job. What is the best way to do it? First he has to start a new apprenticeship, which means that he will earn significantly less money over the next 3 years to learn this profession. He has to finance this financial disadvantage through savings or through additional part-time jobs. He could also prepare for the new profession in an evening course, which costs time and money at the same time to expand his knowledge. No matter which way the person chooses, it costs time or money. The advantage is that after 3 years he earns a fixed income again in a job that he has chosen for himself.

Trading is a self-employed activity that basically does not guarantee income, but may result in massive losses. This is a crucial difference that should be noted. Most of the changes in our lives take time or money. The question is how important the change is to you and what you are willing to invest in it.

First of all, it is important to ask yourself why you want to become a trader. If the answer is: independence and earning a lot of money, I would recommend stop with trading. I didn't start out in this market to make a lot of money, but it was a great challenge, to compete against the best players in the world. Only after 5 years was it definitely clear that I could also earn above average. However, at that time I had already spent 12-14 hours a day in front of the screen for 5 years.

The next question to ask yourself: What kind of trader do you want to be?

1. You try to manage your investments yourself to get a better return or build up capital.

2. One tries to earn a small additional income part-time.

3. You want to earn your living income as a trader full-time immediately or long-term.

In the first and second case, the stress factor is significantly lower because the cost of living is secured. I cannot recommend an immediate start without experience. Regardless of whether you enter the training business full-time or part-time, you always have to be willing to invest. I have a very important principle: If you use money to trade, you have to be prepared to completely do without it. If you're not ready to do that, you shouldn't take that risk.

What rate of return should you initially calculate with? 2%, 5%, 10% or even 20% per month? Hearing the truth is sobering. Most hedge fund managers would give their left legs if they had a return of over 2% per month. However, the best may not reach 4% per month non-stop. If you calculate € 2,000 in start-up capital with a 2% monthly return, that's not even enough to cover the internet fees. Of course there are examples of traders who have made millions within a few months, but there are also examples of lottery players who have won 100 million. All of this is pure luck and has nothing to do with professional trading. Trading a small account to a big account is a dream, that will remain unfulfilled for many.

First of all, it makes sense to start as a beginner on the side to gain the first experience. In addition to the actual trading, I would calculate additional time to continue my trading education. At the beginning of my training career, I had difficulty distinguishing a limit buy order from a limit sell order or establishing strategic money management. These basic things are critical to success. It took me 5 years to live effectively from trading, so I invested a total of about 20,000 hours. Maybe I'm a late bloomer, but I would calculate at least 10,000 hours. If you managed to invest 20 hours a week in trading part-time, it would take at least 10 years to get 10,000 hours of experience.

You write that from your point of view the trade is largely manipulated. I fully agree with you in this area. But how do you want to recognize this manipulation with the pure forex data if you can only see the price and time data? I believe that we agree that this manipulation can only be seen in the liquidity and volume. This manipulation is the reason that over 90% -95% of all traders lose. With the data in the Forex market, a trader has a chance of 1:19, with the data from the future market a chance of 1: 6. This is exactly why you should concentrate on stock market data as early as possible. You can get future data for $ 5-10 a month, this investment will definitely pay off.

Of course, every trader has to create his own setup for years, with the financial means that are available to him. Since every trader judges market information differently, I am unable to make a specific recommendation for data, software, platforms and indicators. As you put it correctly: everyone will personalize it individually based on preference and affordability. The only chance that a beginner has is to create his optimal setup from the large amount of information from FF and from the Internet and to gain experience in trade. In all other economic sectors, as an entrepreneur you have exactly the same challenge.

In this sense, I also see this blog: It is a buffet to put together an individual setup, but here you will not find a system, since systems will not work in the long run. If your real desire is to become a professional trader, nothing will stop you. Perhaps you will be able to act professionally after 3 years, that is often a question of the right attitude and mentality. Of course, a little bit of luck is always part of it.

I keep my fingers crossed for you from the bottom of my heart and wish you to achieve your goals

best regards
Michael

Hi Bionics / Michael

Very nice thread. I am reading all as I have time available for it.
Agree 99% with you about points and information that you are providing here, for those who are starting at markets you have no idea of how priceless and this amount of information there is here and for free.

Just one quick question Michael.
Those prints of information are from ninja trader platform 8 with a mix of jigsaw tools and mzpack ?

I also use jigsaw, would kindle ask you wich platforms do you use ?
Tks
Have a good week buddy

Future data


Hello Dcrs,

I warmly welcome you to our blog and thank you for your kind, introductory words. Basically, I use the futures data as crucial information to trade in Forex. First I tested many different platforms for the futures market and decided on ATAS. A crucial point for me are the almost unlimited setting options of the platform that I need for my trade. However, the costs are significantly higher than with other platforms that also offer very good services. There are many good platforms for the future data, I recommend testing different ones first and then making an individual decision. Here is some information I posted in August:

Project 6 first interim conclusion


A very important point if you work with high-quality futures data is a fast internet connection with a very good ping and very good hardware. So far I have been working with an LTE hybrid connection, which will be exchanged for a fiber optic line with 1000Mbit in 4 weeks. Then an upload of up to 500Mbit is possible, the ping values are also decisive here. Since I use up to 50 charts with different algorithms in my Future platform, I need at least 64 GB Ram and a fast i9 processor with SSD. Depending on the screen resolution and monitor size, one or two RTX 2080 are then used. You don't need this for a normal application at first, but you should keep this in mind if you need more complex queries later.

I hope that I could help you a little and wish you a successful trading week.

best regards

Professional trading and analysis platforms

[quote=YYZ;12698386]{quote} ...and decided on ATAS. A crucial point for me are the almost unlimited setting options of the platform that I need for my trade. .... best regards Bionics, so that is market profile platform?


Hello YYZ,

It is a professional trading and analysis platform for order flow and volume trading, time and sales, level II data (market depth), heat map, current and historical volume levels as well as HFT algorithm tracking. Raw order flow data is processed in order to then filter it further and display it intuitively. The crucial thing is the necessary stock market data that needs every trader. The footprint charts and the market profile have less value for me, I focus more on algorithms and liquidity, because I am able to determine the current market direction more quickly. All charts that I created in this blog come exclusively from MT4, MT5 and the trading software. As I said, there are significantly cheaper platforms, I would do an internet search and test different platforms. Then you know what you need and don't get annoyed.

best regards

Hi Michael

I agree with you I already tested ATAS and is real good, fast and so many options available.

About the PC/lap top.
My configs are basically the same just no need for me 64Ram and not 2 RTX.
1RTX 2080 and 32Ram are ok here.
With 1 RTX 2080 and a hub hdmi we can plug several screens with 2 we probably can open a lanhouse for rent lol.

The internet connection, ping, upload you are 100% right.
Just one thing to add I'm my opinion(perhaps) you already mentioned before.

But I would not recommend trade in the same computer that you make your analysis. Ok if you have a PC like those mentioned above probable no problem will come, but still I don't like to take the risks and also have a "background/back up" the "worst" thing that an happen is you open or are in a trade and the PC froze, the light ends etc...

Cheers good week to all

Trading security


[quote=Dcrs;12700423]{quote} Hi Michael I agree with you I already tested ATAS and is real good, fast and so many options available.


Hello Dcrs,

I agree with you on all points, as I have already written, these configurations are not so crucial in the beginning. I myself work with two PCs that run independently of each other. The first PC provides me with the forex data, the second is used for the trading software in the futures market. In addition, the first PC is secured with an uninterruptible power supply. The security question: What happens if the power or the Internet fails. Since I only trade in the forex market, a power failure by the UPS is not a problem. It becomes problematic when the internet goes down because I only work with virtual stops.

I have an app from my broker on my phone and can use it to close or open positions. If that doesn't help, I can still reach my broker by phone. In the worst case, a loss occurs or the credit on the account is destroyed. There is a trick for that. You open an MT4 and an MT5 account with your broker. You trade in one account and park your money in the other. It allows you to manage your accounts in seconds to transfer money back and forth. I would only deposit as much money into the trading account as you need for your daily operations. This gives you optimal protection. I can never lose more than my account balance, which is a very low risk for me.

I have written about this in the past, but it is a very important remark from your side. Exactly these things are extremely important, and every trader should ask themselves these questions, thank you for your note again.

Good luck in this trading week

best regards
Michael

Perfect Michael

As i wrote i already thought that you have mentioned those points.

I do and have the same strategies that you mentioned.
Mobile phone in the last case is where I close the trades if I was in the middle and all those problems happen.

I see a lot of people saying that equipments and speed internet is not important... Sorry to say that but is all BS.

Ask yourself if a successful trader will be trading with a low speed conection and a laptop 4g ram, i3 processor with cheap board video?

He wont be able to even plug more then one screen to the PC and also would never be able to open a futures platform and be able to analyze the market will take so much time to even load the data and probably will crush.

No need to take my word, give a try.

PS: I am not saying that you must have a NASA computer but reliable and good class equipment is require to trade in high/professional level, BUT only after you know what are you doing.

Cheers.

Hi Bionic Michael,

I finally made some good investments in Forex. That was a long time ago, when I bought some 'elite' indicators at Forex TSD in 2014 (site does not exist anymore), later it became Forex Station. I'm still using those good old indicators made at the time by Mladen and MrTools, so I was sure they were NRP and no BS.
So now I have been buying a second screen, ha ha, my new screen is now first and the old the second one. So on my first screen are two offline charts, a small M30 chart and a small H1 chart ; on my second screen my good old normal M5 chart and the other half of it is for some 'bionic' dashboards, in fact for me the most interesting ones.
So, I also acquired the OVO offline tickchart, which is definitively a good choice. The only drawback is that the offline chart slows down a bit my simple desktop computer, but I can live with that. After all my system is quite heavy. For now I only perform big trades of 1 lot in demo and there I already won back my investments with a few trades, but not for real of course. For 'real' I do only 0.01 lot trades, that's what I always do when I change my system until I really get used to it. My system is in fact quite the same, but trading from offline charts does change things, the fact is that your mind must get the hang of it AND you need some time to search for the right tickchart 'period'. 14, 32, 48, 60, 128, 500 ??? The possibilities are huge. I think I will stick to T7 for real fast trades, T64 for slightly longer ones and T256 for nice overview and drawing some equilibrium lines. I also draw those on a normal D1 chart and a H1 chart.
Hmm, I do not think I really need Futures data or the Atas platform and indis, for now I'm going to try to make profit using my good old system. Will see how it goes. It's sometimes amazing, on the T7 tickchart you already see it coming when price is going down, while on T64, all indicators are still going up.

For me it's sometimes hard to understand, Michael, how you can trade without other indicators than the chart itself, I could not do without my medium slow stoch, my very slow stoch, DSS, TSS and slow and fast RSX. But that's of course everyones own choice. I must thank you for your insight in the equilibrium RS lines, they are for sure a very nice addition to my system. At the moment I'm at page 42 of your thread, so now I should be able to draw them more accurately.

Keep up the good work !

Greetings from Wulong

Investment as an entrepreneur

[quote=Wulong;12700733]Hi Bionic Michael, I finally made some good investments in Forex.

Hello Wulong

First of all, I'm happy that you are investing time to make progress. That is the most important aspect for a trader. I also started with the tick charts to be closer to volume and price changes. It is quite normal for this to take some time. Back then it was also very difficult for me, to understand how the professionals can only deal with the DOM and the time and sales list. As a trader, you always fall back on your proven setup, because it takes a lot of time to set up a strategy and thus conveys a certain security. Only this security gives us the courage to act in the market and to take risks. Of course we know that there is no security in this market, but our brain needs something to orientate itself on. When I started with the future data after the tick charts, 80% of my screens were filled with forex data and 20% with future data. The more I looked at the future data, the more I used it. Today the Future data occupy more than 80% of my screen views.

There are many recommendations in the market, for example, you should trade in more than one currency or stick to your setup. I have been trading exclusively with the EURUSD for many years and my eight screens are aimed exclusively at the EURUSD. I regularly adjust my setups while using 60% of my screen space for my tried-and-tested displays and 40% for experimenting. The creative experiments of different representations were responsible for my further development. It doesn’t matter what data you’re working with, what’s important is that you’ll see what’s going to happen on your screens And if you are able to act profitably in the long term, the way is definitely right. But the markets change every day, so we have to adapt our behavior to the markets. I am also very pleased that you have started working through this blog and are already on page 42. This blog is structured chronologically and shows my development over the past two years. It is not a matter of copying these things 1: 1, but only of getting out what brings you further. And you have to ask yourself every day what you can do to get better. That is what makes a trader successful.

In addition, I recommend you write your own blog, with which you can document your own development and discuss it with other participants.

No matter what you do, as long as you continue to develop, you make sure that you move forward and that is a prerequisite for success in daily changing markets.

I keep my fingers crossed for you and wish you a great trading week

best regards