The Equilibrium, a key to success!

Howdy Michael and all folks

I agree in 99% of Michael points, of course it is normal a person disagree in some aspects/points specially in a such huge endless market as are financial markets.

But respect always first we must respect each other in disagree.

But one thing that I have been watching very closely for the last years is that MM's /SM as Michael mentioned before, act almost every time in passive way...

But what is that mean ?

Means that if they want to increases the price they wont be starting buying and buying until the price goes up or down we all know the market is 100% manipulated so they will always want to buy cheap and sell expensive and vice versa...
LOOK this is not a receipe of success as I mentioned most of time, if they have to buy or sell a big amount of position and they don't have time they will period.

And those actions are clearly seeing in DOM and times and sales you just need to exercise your eyes and watch, the reconstruct tape it is also a good tool as you can see the big orders together and not one by one in regular times and sales.
Footprints chart also helps.

Another point is that when they start to build positions they need liquid so they know that most part of traders will buy/sell and put their stop loss above or below one S or R and that we call stop hunting cause they wont stop to buy or sell when they already started to build a position let's say of 4000 lots, they will continue buy or sell and hunt stop loss cause creates liquidity to they keep their positions.

Another point and important to understand I AM NOT SAYING THAT OUR STOP LOSS CREATE THE LIQUIDITY THE MMs need or want but I guess you all can understand that it us why most of trader of retail are stopped.

The MMs can buy and sell together etc...

But with time you will see very clearly when they start to build their positions, and with that you earn a little vantage cause you know where they are starting and how big they are creating a position some times are huge positions to long and short time, and if they are huge you know that they are able to defend their positions and we all know that cash is not a problem to MM's whatever you want to call.

With time in order flow in my personal experience you can work out just with DOM, of course it depends of each individual and their development in their knowledge, confidence etc...

But that does not mean that I don't like charts, one and other indicator. That is not what I am saying here/mean to express.

If your strategy works for you with no indicator or 100 indis it is ok.

But for me the most important thing is what Michael mentioned above.

If you get a point where you start to "believe" that you are comfortable or knows all about financial markets...
In my humble opinion it is the start of the end of a trader carrier.

Financial Markets are so huge that every day I learn one or several things and I guess all you buddy's

Cheers

Thanks for your detailled answer, but I do not have time to write my own blog on FF, otherwise I would have to clone my self, ha ha.
My goal is to make profit with higher lots starting from a fast tick chart and applying my basic system to it and with the help now of the, I hope, accurate equilibrium supply demand zones. Hmm, I just looked at my future zones I had drawn and price mostly respected them today, I might be on the right track, ha ha. (Today I was working all day, no time to trade whatsoever). This way I will be very fast in and out of the market, fast scalping should be my thing. I simply have no time for long trades. And that's your opinion too, to be as short as possible in the market. That is of course not always possible, especially when a trade goes against you. I'm one of those very stubborn traders, I do not want to lose a trade, but a trade can go against you a very long time, so now I simply close with a loss and accept it. Next time better ! So trading is definitely a psychological game. I always think of Forex as PacMan. Let's say you are PacMan, the retail trader, and the ghosts are the price, the MMs, the high frequency traders and the last ghost is the big banks - big players. So you are good as PacMan and get easily to some higher levels. Of course, the ghosts catch you now and then, but you survive. Of course the higher the level, the more difficult it becomes because the ghosts get stronger, so how longer you play and how further you get, the more risk THEY GET YOU and take your last life !

See you later, alligator. And I wish bionic Michael and the other traders here many green pips and may the ghosts not get you, ha ha.

Wulong

No doubt you are on your way buddy, hard work pays...

PS: Best compare I read with market Vs PacMan lololol

Live and let live!

Hello dear subscribers,

First of all, thank you for your comments. As we have already established, our traders' setups are different and relate to different assumptions, strategies and data flows. This is perfectly fine and there are no discussions about it, since every trader is responsible for his own success.

It becomes problematic when a trader believes, that his system is the true one and makes fun of other traders who do not act like him. In FF we find some examples. There are blog writers who don't understand, why other trader work with indicators, so they post regular charts from other blogs that are full of indicators. Then they make fun of it. The interesting thing is, that these traders themselves started with a chart full of indicators. I don't think you have to say anything more.

In this blog, we never had any problems with each other, everyone accepts the other as they are. Maybe it's because I'm not promoting a system here, but only ideas for individual setups. Everyone can use the variety of different and free ideas in this blog to get ahead. And that is exactly the only goal at stake. Your own success.

It doesn't matter whether you work with forex data or futures data, volume or liquidity, footprintchart or volumechart, tickcharts or minutecharts. In the end, every trader has to answer for their own profit or loss. For this reason, I am very proud that we find different traders in this blog who pursue different opinions and strategies. And that is exactly what takes us all a step further.

Respect, decency and mutual fairness testify to a good upbringing and a high level of intelligence. This is exactly what we can all be proud of and I am sure that with these virtues we can achieve the success we all want.

Thank you for your loyalty and fairness

best regards
Michael

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Hi Bionics/Michael

I would like to say that I am very happy to meet you and congrats for your thread here at FF.
Nice to meet and be able to learn more with a such helpfull trader.

I think we share most part of financial markets in the same direction.

Besides that I would like to ask you for an advice.

I am at financial markets around 6-7 years.
When I started at your thread I saw in your description that you also are a coder/programmer at Java if I am not mistake.

My ask of advice it is about learn how to code and program for mt4, mt5 and for order flow, platforms like ATAS, Ninja trader 8 and so on...

Could advice me in some course or where start from ?

One last thing mate wich data feed you use or recommend you experience for futures,forex, indices etc...

Tks buddy I hope I can contribute to your thread and learn from you and all buddys here.

Thanks and sorry to disturb you.

Dcrs

The Equilibrium, the key to success

[quote=Dcrs;12704987]I would like to say that I am very happy to meet you and congrats for your thread here at FF.

Hello Dcrs,

I am very happy that you like this blog and that it helps you.

This blog is structured like a book in chronological order and deals with the subject of supply and demand, trading in equilibrium and data in the futures market. I know that my published 1,300 D4 pages to read are a lot of work, but if you have already been able to derive some ideas from them, there is a high probability that you will be able to find many more ideas. Therefore I recommend you to study this blog in peace. My posts contain about 350,000 words and you can read 300 words per minute. That means an investment of about 20 hours. If you can only find one good idea, the investment has paid off.

You can find the answer to your 2 questions here:

New project work for you

Project 6 Forex & Future


I am happy if I could help you and wish you all the best


best regards
Michael

Thanks Michael

I already am reading, but last days I have lack of time but for sure will keeping on, there is a lot of good Intel and share knowledge here.

Thanks a lot I am very glad to find these thread here at FF.

Thanks again

Stophunting, Project No. 9 starts


Hello dear subscribers,


With the start of project No. 8 in November 2019, the stipulation was clearly defined. The idea was to find out with the help of future data and professional software: When will the euro be bought? When will the euro be sold? When will the dollar be bought? When will the dollar be sold? When is a stop loss buy triggered? When is a stop loss sell triggered?

You can find more information in my post:

Deep in the market





First of all, I went into the bid and ask, which are brought into the market by the market participants. With graphic representations I tried to make the different cash flows in the market visible in order to get assumptions for a future of the course. In addition, we took a closer look at the DOM and at some examples of how and why the courses move.

The wrong truth?





In my article: The Matrix, I presented an idea that I implemented using the time and sales list. The first step was to connect the volume with the liquidity in order to recognize the market strength more quickly. I have shown how the big players secretly buy large quantities by instructing their algorithms to buy very large packages from Bid or Ask, often with small Lot.


The Matrix


I would like to briefly introduce my current matrix. At point A we see the spread tape that gives me the respective ask, bid and delta of the market relatively quickly and clearly. Under point B you can see the different orders that come into the market at different times. Here we differentiate between cumulative and non-cumulative orders. At point C we see cumulative orders that have been filtered according to the respective liquidity. Point D shows an overview of the liquidity of bid and ask, and point E shows spoofing, i.e. how many limit orders come into the market or are withdrawn.





In this project, it emerged that liquidity is almost more important than volume. I started by making the liquidity visible in the chat. Here you can see the current setting of my headmap, the larger red and green fields refer to a lower liquidity. Interestingly, this enables you to identify an equilibrium even faster. Basically, I can say that a graphical representation of what's going on in the market is a great relief to be able to see the liquidity and volume at a glance. This project will not be completely finished today because it will accompany us on our way.


The unvarnished truth


We first noticed that the market orders generally take the path of least resistance. The larger the volume in the market order and the smaller the liquidity in the sell limit order, the more likely an upward price trend is. As soon as the liquidity in the sell limit orders increases, it could be an absorption. But it is precisely this situation that is not so easy to identify in the market, but I am working on it.

The big players in the forex market take away $ 400 million from institutional and retail traders every day.


The new generation of traders


The biggest big players work without stops because they can change the market at any time on their terms. Thus, the big players only trade with limit and market orders that are responsible for their entry / exit or for rapid market movements. About 15% of the total turnover in the Forex market is secured with stops, which are almost exclusively institutional and retail traders. In the order book you can see the market order and the limit order, but not the stops and it is precisely these stops that have a magical attraction for the big players. These invisible stops give big players instant liquidity to accelerate the price and at the same time purchase large orders from bid or ask. In addition, market participants are withdrawn from the market because they could disrupt the actual price development.


What many do not even know, this stophunting takes place permanently in the market. In principle, this is not bad will on the part of the big players when they shoot market players out of the market, the big players are always only looking for liquidity. The $ 400 million the big players earn every day is largely the result of stophunting. For this very reason, we should also take a closer look at it. When stophunting, we have to keep in mind that there are different traders with different goals. In addition to scalpers, there are also day traders and swing traders right through to the very long-term position traders. It is clear that we have to start from different stop sizes.





Let us first look at an example in the EURUSD M15.

Point A
The price initially comes from above and forms a new low, then runs upwards and is pushed back almost to the low. The small traders who have decided to buy the euro set their stops under point A.

Point B
Now the course has run to point B and there is first a pullback. Within this pullback an HL is created and then an LL. For many traders, this is a sign that the price may be in a downward trend. They placed their stops at point B.

Point C
From here, an upward trend seems to start again, and after the price has exceeded point B, some euro buyers pull their stop to point C.

Point D
First, a few dollars buyers who got into point B are stopped. Then the course runs to Point E.

Point E
The course is braked exactly at the level of point C and pushed up again. At first it seems as if it is a resistance zone that cannot be broken. The course is going up again.

Point F
There is a small reset, which can be overcome quickly, however. After the price has overcome point D, some euro buyers move their stop to point F.

Point G
With the course of the course at point G, some dollar buyers who went short at point D are stopped.

Point H
At Point H, additional dollar buyers have entered the market, which will be stopped immediately with the course of the Point I price.

Point I
Initially, this trend looks as if there could be another upward trend. At Point I there were again many euro buyers who entered the market. In the course of the course at point J, most have been stopped.

Point J
In the price development to point J, the stops of euro buyers at points C, E, F and H were the clear goal. Why didn't the course go down to point A? I have my own theory about this. If you look at the course development at point A, you will see a real mess. Many traders who initially bought the euro were immediately stopped and confused. The big players used this confusion to push the price up. When moving from point A to B, the fewest retail traders were involved, in the first half. This means that the initial course from point A was primarily staged by the big player. Accordingly, there was little likelihood that larger stops could be below point C. And if that were the case, the big players would have gotten these stops because they know exactly where the liquidity is in the market. After liquidity was no longer to be expected under point J, a further upward trend in the price could be assumed.

The range we are looking at here was a total of 70 pip, of course we must note that some traders work with stops of 5 to 7 pip and therefore cannot always use the highs and lows shown in the example. The subsequent upward trend with points K, L, M, N and O always followed the same principle. The reason for this is clear, the big players have no chance under normal conditions to find sufficient liquidity to place their large orders. Therefore, you use the liquidity of the stops to buy or sell there unnoticed. The sufferers are those who believe that there is a trend, bullish or bearish movements or resistance zones in the market. I used to think that too, but I was lucky enough to only act within one equilibrium. And within an equilibrium, artificial resistance zones are created so that traders are not taken away during an outbreak.





Basically, it is an advantage to analyze possible liquidity through stops in the market. However, the mere identification of possible stops is not enough to make a specific trading decision. When stops are triggered, the big question is what the big players are buying or selling at that moment. At point A we see how massive stops are triggered in the market. The first assumption would be that the price would have to go up relatively quickly again. But we see that the dollar was bought massively at points A and B. Then there was a stop run upwards and the course was then pushed down to point C.

It is therefore a question of combining the most varied of findings with one another in order to make the best possible trading decisions. With pure Forex data, it is theoretically possible to improve the probability of winning on the basis of identified stops. However, if we add the future data to find out what the big players are aiming for with the stops that have started, much becomes clearer. When stops are started, there are theoretically two options. The Big Player uses these stops to further accelerate the course of the course or he uses the situation in which he orders the limit with absorbing the stops and then pushes the course in the opposite direction. And it is precisely these things that you cannot see if you concentrate solely on identifying the stops.

We want to take a closer look at this stops in Project No. 9. There are different approaches to consider liquidity and volume in kombination with the stops. I am convinced that this project will bring us a good deal further and I am already looking forward to the result.


I wish you a successful trading week

best regards
Michael

Ha, ha Michael, I think many traders (me too) are still amazed when they are looking at your pics with circles and squares and triangles that represent the actions of big players and the kind. I'm of course trading the old fashion way, but now I'm using some important zones as a bonus. So traders will see a normal chart now (even a simple one, ha ha) with normal but good indicators and some horizontal zones. This morning I was home, so some time to test out my 'new' system with offline charts and also testing out how to trade with 1.00 lots. So this morning Euro was strong and rising, so I did some buy trades on demo. Won 4 in a row, closing very fast when in good profit. That's what I did too in the past with 0.1 lot, closing fast when price gave me 3 or 5 Euro. That way I'm very fast out of the market, but 5 Euro is of course peanuts.
Well the 5th trade, I did not care, I bought Euro again, while price was going clearly down, I just wanted to find out how much it would cost me if price hit my stop loss of 5 pips with 1 lot. But it did not, instead it hit my take profit that was 10 pips away, but I only saw that this evening.
Price did go down in the afternoon, due to some good US economic news, I did not care, was not home anymore then, but when I got back this evening, I saw price simply had hit my orange supply zone I had drawn on a T 8192 a few days ago. Of course, my stoch was above 90 then and my RSX above level 75, so with these indicators one can have some extra confirmation, and I still need that extra confirmation, after all I'm very 'new' into drawing these zones. Of course, Bionic Michael does not need those indis, but I think a lot of less experienced traders might do, but that's of course a free choice.
Anyway, I'm glad I have found this thread, it already makes my trading better.

See you !
Wulong

This is cool

Development

[quote=Wulong;12707194] Michael, Anyway, I'm glad I have found this thread, it already makes my trading better.


Hello Wulong,

every trader must always act according to their own setup in order to be successful.

Live and let live!

This setup is as individual as a fingerprint and cannot be copied. Even if two traders traded on the same setup, the results would always be different. The key to a setup is the further development and the resulting higher probability of winning. The most important thing is that you have found a blog here that gives you important information to improve your trade, but only because you are willing to spend time on it. Many traders are looking for complete systems that show them boarding and alighting, stopping and even money management. These systems are learned for months and in the end you find, that you can't get ahead. For this reason, I think it is better to put together your setup like puzzle pieces yourself.

See my post: The never ending story

You can find 1000 ideas for these puzzle pieces here in this blog, the only willingness that a trader has to bring is to invest 20 hours to analyze these ideas and then pick the best ones. This creates an individual setup, that is tailored to each trader and brings the best results in the long term. If you don't like it, you simply leave it out. The key is your personal progress, you are the main person in your own trading business. So I'm glad that you are happy to have found this blog and I see that you get progress. You decide how quickly this happens on your own.

Good luck
Michael

Supporting indicators for Project No.9


Hello dear subscribers,

As already announced in my last post, our new project number 9 is primarily about the permanent stoprun that is caused by the big players in order to obtain the necessary liquidity.

Stophunting, Project No. 9 starts

In the next few weeks we want to collect and evaluate some ideas and information on different charts. For those who have not yet had any experience in this area, I have created an interesting template with associated indicators. These indicators are designed to help you find potential stops more quickly to identify importend liquidity that could be of interest to big players.





These are three auxiliary indicators. The zigzag easy 1.2 is already known and has been introduced by me a few times. If you install it manually, I recommend a setting of 4/2/1. The numbers that the indicator produces in the chart are the average pip / 10 that each candle has reached within the respective trend. The openLevels Historical indicator is a sensationally good work by cja, which clearly shows the range of the current day. You can also use it to represent the range of several days, but I only use it for the current day. In our case, the MTF fractal indicator is used for a different purpose and is very suitable for identifying possible stops in the chart more quickly. It is best to save the three indicators in your MT4 folder and put the template "Project No. 9" in your template folder. Then adjust the colors to your liking and get started. The candles are only shown in the template as a dark bar chart, since they only play a subordinate role for the stop identification.





Of course you can also work with a normal candle or the bionic candle in chat, the zigzag indicator is suitable for an optimal overview in any case. Start with an M 15 chart and draw the different stops. Since the prices generally move in zigzag lines, think about which stops can be started next to ensure sufficient liquidity. Please note that the big players manipulate the price of the course and resistance zones are not initiated accidentally, but deliberately. I would neglect candle pictures and possible patterns, because in my eyes they have no relevance. Candles are created randomly by the time, as soon as you switch from the M1 to a tick chart, the candle pictures change blatantly. First of all, just pay attention to the different zigzag lines, so that you will be able to better understand the approach of the big players within a short time.

This chart should only serve as a training aid to get a rough overview of the market. They show no actual stops or liquidity. In the end, of course, the crucial data is missing whether a big player brings Bid or Ask into the market within a stop or absorbs bid or ask with the help of limit orders. We will then combine this second part with the future data in our further project No. 10. First of all, it's about understanding how big players work. We will then post our experiences and ideas derived from them and discuss them in detail. But first of all, it is about gaining initial experience in order to recognize how the market may work.

I look forward to a lively exchange and wish you a nice weekend.

best regards
Michael

Servus Michael.. oder Gude wie man bei uns sagt!


During my first free weeks after summer holidays I had a proper watch about your thread.

The last posts about from November to now are incredible!

Definitely not a easy read, but worth it.

I came to the conclusion to work with Futures Data (Stock market Data) last summer, when I scalped the dax.

I felt there was a missing point (Datafeed) on specific points, where I place my orders.
That was the reason to lift my trading to a more professional stage.

To be honest, you saved me a lot of research!

I had never got the clue about clustering orders (sorted by size and ms) and mark them as "pro orders".

I am really curious about how to mark the orders in FX for a stophunt, because that is exactly what I trade naked in small timeframes.


Chapeau!
Excellent work.

Guido

why use so many indicators when trading price action

Stop Hunting

[quote=Sesamstrasse;12708635]Servus Michael.. The last posts about from November to now are incredible!


Hello Guido,

First of all, a warm welcome to our blog and a warm greeting to Frankfurt, the most important stock exchange location in Germany. Thank you for your great compliment to this blog.

First of all, I am pleased that you are also dealing with the futures market, because the information from it is crucial to overcome the last hurdle in the forex market. I admit that my market view is unconventional and creative, I myself do not know anyone who bases his trading in the Forex market exclusively on futures data. However, the extraordinary creativity of the big players brings them a daily profit of over $ 400 million, so creativity seems to be more of an advantage.

Unfortunately, the price data of some brokers is displayed incorrectly or they are wrong. But there are also some exceptions in the Forex area that you can rely on, to get specific price data.

I get my stock market data from CQG, however this is initially raw stock market data that you have to have translated by professional software. Only then does the actual work begin. The settings and individual combinations, different representations must be filtered so that they give you the crucial information that you expect. First of all, this is a big challenge that takes a lot of time.

Many years ago I thought that with the price chart I would be able to determine trends and resistance zones. Through the exact analysis of the futures data with my prop software, I came to the conclusion that there are actually no trends and no real resistance zones. The resistance zones that we see are initiated by the big players to deceive us and alleged trends are there to mislead dump money.

The Big Boys work primarily with limit orders and market orders, stops or TPs are dispensed with, since the market would not be able to accept these large packages at once if these orders were placed directly on the market.

Cumulative bid and ask of the big players are relatively easy to identify when sorting orders by milliseconds. I am currently concerned with how I can use the limitorder to identify a specific accumulated absorption in the market orders. If I delete the cumulative and large orders of the big players, the orders of the retail traders and the smaller institutional traders remain. This is also an interesting perspective that gives us important information.

Stophunting is a crucial point in market movements for which there are no specific rules or assumptions. Through my years of trading in equilibrium, I have discovered some aspects that could be very interesting. We will look into this, in the next few weeks.

I look forward to a great cooperation and wish you a nice weekend and a quiet Monday, it is a holiday in the USA.

best regards
Michael

Hey Michael,

What is the best way to draw equilibrium or supply and demand zones : in normal timeframes (M5, M15 and so on) or on tickcharts like I did in my previous post ? Maybe normal timeframes because most traders are using those ?

On the right way

[quote=Wulong;12710327]Hey Michael, What is the best way to draw equilibrium or supply and demand zones

Hello Wulong,

the question is not easy to answer, since most resistance zones are initiated by the big players in order to lure retail traders onto the wrong track. Here is a possible solution:

On the right way

I also recommend reading post 905-907. I hope it helps you a little.
best regards

Trading style

Hello fxkacper,

Welcome to our blog and thank you for your question. There are different approaches to trading in the forex market. I have been acting according to supply and demand for many years and in the past I have specialized in trading short, harmless movements within an equilibrium. In the Forex market, you can only rely on the price and time data, since the tick volume has nothing to do with real volume (bid and ask). I only found my key candles based on the prices. In principle, I was a scalper who traded within the equilibrium based on price information.

I have been concentrating on stock market data for a year now, so the volume with bid and ask and especially liquidity has become the focus of my attention. The pure candles or price information give us traders an incorrect picture of the market, because a strong bullish candle does not necessarily mean that someone is buying the euro to push the price further up. Once a big player sells their dollars after a downtrend, a strong bullish candle may also emerge. However, this cannot be seen from the pure candle representation.

Price action does not necessarily mean that a trader may not use additional auxiliary indicators such as the MA, Daily Open, Zig Zag or other indicators. Since there was no selection as an Equilibruim trader at FF in the past, I chose Price Action.

You are absolutely right, I trade in the Forex market solely on the basis of volume and liquidity, since there is no such selection at FF, I have now completely omitted to display the trading style. Thank you very much for your hint.

All the best for the future
best regards

Personal goals


Hello Dcrs,

I am pleased to hear that. The crucial thing is, that you will progress personally, to find your optimal setup. In our new project No. 9 I try to post the first example until today at noon of how stophunting works and how it can be identified. This may also help you further.

Greetings Michael