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Money management: Capital needed per 0.07 USD per microlot 0 replies

The Volume Detective 411 replies

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(binned per thread starter’s request) MM (Money Maker) Detective

  • #1,761
  • May 22, 2019 5:35am May 22, 2019 5:35am
Quoting RickM
{quote} Hi Steve LG's create micro gaps which is really just the thinning of Liquidity in real trading terms. I am just reading the gaps, how many and over what range do they position themselves. I trade these micro gaps on the 1 minute chart and they normally always get filled. Macro & micro gaps read the same to me. Here is an example tonight on the AUDJPY I was trading. Notice all these LG's were filled except for the major one ahead of the price. This long ranging candle produced a One minute candle that was over 27 pips long. There would of...
@RickM -- thank you for your insight into trading liquidity gaps. This evening I spent time on the M1 chart (which I rarely do) and adjusted the indicator settings so I could see all liquidity gaps -- large and small. And, by golly, you're right.

Attached Image (click to enlarge)
Click to Enlarge Name: MMLiquidityGaps-M1.png Size: 29 KB


On a M1 chart you can watch the Ask line jiggle with each incoming tick and, sure enough, you can fairly accurately guess which direction it will move to fill a nearby gap. I've attached an image where there are clusters of bullish or bearish gaps, or one relatively large gap. And, sure enough, you can watch them get filled. It is hard to do this justice with just a screen shot -- you need to watch this in real-time on an M1 chart to really appreciate the price action.

As a rookie trader, I'm noticing it is tricky to trade M1 -- not so much because of the patterns but, rather, because the bar sizes are small and even when you win trades the spread takes a big bite out of your win. So, that's why when you trade M1 you need to find either a large liquidity gap (like the 27-pip one that @RickM mentioned), or a string of them one right after the other (like the bearish ones in highlighted by the first red rectangle in the screen shot above).
  • #1,762
  • May 22, 2019 6:37am May 22, 2019 6:37am
Quoting OAPDave
{quote} You still need a map ? {image}
@OAPDave -- please explain. I see a price chart with some evenly-spaced colored lines. How does this help me to trade?
  • #1,763
  • May 22, 2019 7:14am May 22, 2019 7:14am
MM algorithm is working as expected , just clearing the top target . Now it should clear the bottom one. These movements are to the pip, no human could perform such tasks. Already around 200 pips this session without doing anything much at all.
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  • #1,764
  • May 22, 2019 7:18am May 22, 2019 7:18am
GU down to 1.2570 ?
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  • #1,765
  • May 22, 2019 7:25am May 22, 2019 7:25am
Quoting Pip-Miner
MM algorithm is working as expected , just clearing the top target . Now it should clear the bottom one. These movements are to the pip, no human could perform such tasks. Already around 200 pips this session without doing anything much at all. {image}
its like a hard disk going through a defragmentation process. the gaps in the hard drive get filled.
  • #1,766
  • May 22, 2019 7:29am May 22, 2019 7:29am
Quoting Pip-Miner
{quote} its like a hard disk going through a defragmentation process. the gaps in the hard drive get filled.
Hi
Do you trede these gaps only M1 chart?
What about if the gap is not filled like your sell on the above chart?
  • #1,767
  • May 22, 2019 9:28am May 22, 2019 9:28am
Quoting Pip-Miner
MM algorithm is working as expected , just clearing the top target . Now it should clear the bottom one. These movements are to the pip, no human could perform such tasks. Already around 200 pips this session without doing anything much at all. {image}
Hi Pip-miner,
I am following very this very closely, I see waht you are talking about as far as hoovering up the LG, when we look at the question of are we going up or down, do you tend to favour the longer term trend when deciding which way to go?
regards,
Peter
Just trying to put a kiss on the cheek of success
  • #1,768
  • May 22, 2019 10:32am May 22, 2019 10:32am
Quoting robots4me
{quote} @majamivice -- interesting... {quote} Hmmmm... I guess nobody really cares.
Kind of surprised at the lack of response this article received. Or maybe people aren’t surprised at this point. I would like to say I don’t buy for one second that a few rogue traders were involved, I believe they were given their marching orders and performed like good little soldiers (notice how they weren’t named in this article or any other). Congratulations on a great thread. I’ve been coming to FF for years, never joined just for the econ calendar and somehow found George’s thread and now yours. Keep up the good work!!!!!
  • #1,769
  • May 22, 2019 11:19am May 22, 2019 11:19am
Quoting OAPDave
{quote} Did do when I showed you MurryMaths before, but look how Nih98 indicators fit, give the label on each Murrey level a little attention {image} {image}
@OAPDave -- dude:

1. The thread is not about MurreyMath.
2. No one cares enough about MurreyMath to sift through 1769 posts searching for what you posted a couple of weeks ago.
3. I don't like riddles -- I don't have the time or patience.
4. I don't like riddles -- I don't have the time or patience.
5. I've shared with you indicators that took many hours to develop.
6. I write posts that include screen shots with markings and explanations in an effort people will understand my point or question.
7. I'm not interested in MurreyMath, but when you posted a chart with colored lines I showed some interest and asked for an explanation. Your response was more charts with lines advising me to pay closer attention.

I'm interested in trading forex. My intent is to cut to the chase -- avoid the BS and riddles. If you just want to impress people that you can see something the rest of us can't, then I'm not interested. If you want to actually share some observation then do it in a way that makes it easy for me. Don't make me work for it. Otherwise you just become more background noise. Don't you understand that?
  • #1,770
  • May 22, 2019 11:45am May 22, 2019 11:45am
Check this out -- USDCAD-M1. How much more perfect can it get? (I didn't trade it -- wasn't paying attention).

Attached Image (click to enlarge)
Click to Enlarge Name: USDCAD-LiquidityGap.png Size: 25 KB
  • #1,771
  • May 22, 2019 12:37pm May 22, 2019 12:37pm
I just now realized why an M1 chart is preferable when trading micro liquidity gaps. Look at the two charts below -- both are USDCAD. The upper one is M1 and the lower one is M30. M30 is usually my favorite time frame.

The red rectangles include the same price data. However, in the M1 chart you see micro liquidity gaps, whereas in the M30 chart you do not.

The reason is because:
(a) An M30 bar contains 30 M1 bars.
(b) The micro gaps get filled within 30 minutes, so by the time the M30 bar is closed then there are no micro gaps to see (since they've already been filled).

BTW -- credit goes to @RickM for opening my eyes on this one

Attached Image (click to enlarge)
Click to Enlarge Name: USDCAD-LiquidityGap-2.png Size: 122 KB
  • #1,772
  • May 22, 2019 1:49pm May 22, 2019 1:49pm
Attached Image (click to enlarge)
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just took this trade to see how it goes. It has a hit a triple bottom on the daily so hopefully its north bound.
Just trying to put a kiss on the cheek of success
  • #1,773
  • Edited May 23, 2019 5:24am May 22, 2019 3:59pm | Edited May 23, 2019 5:24am
Quoting robots4me
I just now realized why an M1 chart is preferable when trading micro liquidity gaps. Look at the two charts below -- both are USDCAD. The upper one is M1 and the lower one is M30. M30 is usually my favorite time frame. The red rectangles include the same price data. However, in the M1 chart you see micro liquidity gaps, whereas in the M30 chart you do not. The reason is because: (a) An M30 bar contains 30 M1 bars. (b) The micro gaps get filled within 30 minutes, so by the time the M30 bar is closed then there are no micro gaps to see (since they've...
Hi,

Is it possible to make the rectangle boxes in the LiquidityGaps indicator have an object property of "OBJPROP_BACK" set to true so that positions and limits are easier to read on the screen when there are liquidity gaps overlapping them? If using option FillGapBoxes = true.

Thanks, appreciate your work.

Regards,
Paul
  • #1,774
  • May 22, 2019 4:04pm May 22, 2019 4:04pm
Quoting robots4me
I just now realized why an M1 chart is preferable when trading micro liquidity gaps. Look at the two charts below -- both are USDCAD. The upper one is M1 and the lower one is M30. M30 is usually my favorite time frame. The red rectangles include the same price data. However, in the M1 chart you see micro liquidity gaps, whereas in the M30 chart you do not. The reason is because: (a) An M30 bar contains 30 M1 bars. (b) The micro gaps get filled within 30 minutes, so by the time the M30 bar is closed then there are no micro gaps to see (since they've...
Hi Steve

The M30 chart can still be useful. You can use it to monitor the Average Daily Range when it takes a big move. Price likes to keep within a normal range even on a big moving day.

This is my first step when I open my charts up for the London session and I do keep a eye on the range expanding here all night.
Attached Image (click to enlarge)
Click to Enlarge Name: adr uc.png Size: 107 KB
Trading thin liquidity at the boundary of the charts
  • #1,775
  • May 22, 2019 4:10pm May 22, 2019 4:10pm
Quoting pet3250
{image} just took this trade to see how it goes. It has a hit a triple bottom on the daily so hopefully its north bound.
@pet3250 -- very nice. You're looking at things the same way I am right now.

Since the market is "fractal" in nature, then the same patterns probably exist at all time frames.

Just as in real-life, it comes down to trade-offs. The advantage using M1 is you get almost immediate feedback whether things are going in the direction you throught. The the disadvantage is the "delta pips" is small and even when you win the spread takes a big chunk out of it.

The advantage with H1 (and M30 which I like) is the spread takes a smaller chunk out of a win, but then you have to wait longer to see if things are going in the right direction.

Now I'm thinking that with experience, these patterns will be easier to spot and trade.

Also, if this approach continues to hold up, then I can imagine further automating it. The same rules your brain follows for making discretionary decisions can be encoded in an algorithm -- never as good as your brain, but maybe close enough so you don't have to sit and watch the screen.

@pet3250 -- a question: Do you have an Exit plan? When are you going to close the trade?
  • #1,776
  • May 22, 2019 4:12pm May 22, 2019 4:12pm
Quoting swd
{quote} Hi, Is it possible to make the rectangle boxes in the LiquidityGaps indicator have an object property of "OBJPROP_BACK" set to true so that positions and limits are easier to read on the screen when there are liquidity gaps overlapping them? I use option FillGapBoxes = true. Thanks, appreciate your work. Regards, Paul
Hello Paul -- yes. I haven't used that property before, but I'll check it this evening and post a message when I've updated the indicator.
  • #1,777
  • May 22, 2019 4:24pm May 22, 2019 4:24pm
Quoting RickM
{quote} Hi Steve The M30 chart can still be useful. You can use it to monitor the Average Daily Range when it takes a big move. Price likes to keep within a normal range even on a big moving day. This is my first step when I open my charts up for the London session and I do keep a eye on the range expanding here all night. {image}
Hi @RickM -- nice, thank you.

Perhaps I'll include ADR as an optional setting in the MMLiquidityGaps indicator.
  • #1,778
  • May 22, 2019 4:41pm May 22, 2019 4:41pm
Quoting robots4me
{quote} @RickM -- thank you for your insight into trading liquidity gaps. This evening I spent time on the M1 chart (which I rarely do) and adjusted the indicator settings so I could see all liquidity gaps -- large and small. And, by golly, you're right. {image} On a M1 chart you can watch the Ask line jiggle with each incoming tick and, sure enough, you can fairly accurately guess which direction it will move to fill a nearby gap. I've attached an image where there are clusters of bullish or bearish gaps, or one relatively large gap. And, sure...
Hi robots4me how do you adjust the indicator to see the 1M gaps . Thank you
  • #1,779
  • May 22, 2019 5:13pm May 22, 2019 5:13pm
Quoting nunez1
{quote} Hi robots4me how do you adjust the indicator to see the 1M gaps . Thank you
Hello @nunez1 -- they are not "M1 gaps". They are liquidity gaps. Liquidity gaps almost always get filled -- some sooner rather than later.

Liquidity gaps that are visible at higher time frames are always visible at lower time frames, but not the converse. That was the point of my post.

If you download the latest version of the indicators from post #1 then the defaults should work. There is a setting called "BodyFactor" and I've set that to "0.1", which affects the minimum size of a detected liquidity gap.

I know what you meant by "1M gaps". My point is I don't think of them that way. Some liquidity gaps fill right away and you need a finer resolution chart (i.e. M1) to see them before they disappear and merge into a bar from a higher time frame.
  • #1,780
  • May 22, 2019 5:28pm May 22, 2019 5:28pm
Quoting robots4me
{quote} Hello @nunez1 -- they are not "M1 gaps". They are liquidity gaps. Liquidity gaps almost always get filled -- some sooner rather than later. Liquidity gaps that are visible at higher time frames are always visible at lower time frames, but not the converse. That was the point of my post. If you download the latest version of the indicators from post #1 then the defaults should work. There is a setting called "BodyFactor" and I've set that to "0.1", which affects the minimum size of a detected liquidity gap. I know what you meant by "1M gaps"....
Sorry that’s what I meant to say LG lol.
with default setting is hard to see LG on the 1M so I’m going to change the settings of the indicator to 0.1? To be able to see the LG better on the 1M tf?
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