The Equilibrium, a key to success!

Scalper = self-destruction in small installments?


Hello dear subscribers,

To work as an counter-trend scalper with an 8-tick chart would have to be suicide from a financial point of view. But why that is not the case and why I have decided to do it, I would like to show today. After having provided you with some self-made indicators that all have the sole aim of identifying the key candle, I would first like to talk about my skin screen and which auxiliary indicators I currently use in my dashboard.



On my 55 inch monitor are relatively few auxiliary indicators to have a clear view of the candles. Let's take a closer look at the auxiliary indicators, most of which I have already published.

Point A
At the HH, HL, LH and LL you will see numbers. These numbers show the average pipettes per candle in the respective upward or downward trend. From this it is very easy to derive pullbacks and trend strengths.

Point B
An indicator (blue and yellow candles) that helps me find the tracks of the big players. He is variable and automatically changes the setting depending on the volatility.

Point C
A normal ATR indicator with the setting of the last 100 candles.

Point D
The indicator published yesterday that shows the strength of the last five candles. Especially with trend turning a very interesting tool.

Point E
This is an indicator that shows me exclusively the pullbacks of each movement. As I've already said, the pullbacks within a candle are more important to me than the movement itself.

Point F
A self-developed indicator that shows me the size of the solder used. The displayed strength I have modified with a special calculation formula.

Point G
I create the zones myself using the key candles identified in front of me. From this I deduce my trade. My stops are an average of 0.5 pip including the spread, which is a risk of about 1 pip. I try to realize a chance risk ratio of 1: 5 to 1:10, which is not always possible, because I work in the 8 Tickchart. In addition to my main screen, there are other screens where I watch the course in larger time units. All screens run in the tick chart only the trading screen run in M1.

When I identify my key candles in the 8th Tick Chart, I'm interested in how the price reacts when it comes to these key zones. I created a dashboard for that. Enclosed a short video about the function. At the beginning of the three minutes, the course is initially in equilibrium and then runs down.

Dashboard video



There is a lot of information on this dashboard, which basically only interests me when the course arrives in my key zone. With the indicators I have posted, they are also able to put together such a dashboard. My personal dashboard is an eternal building site, it is regularly updated and improved. If something does not help, it flies out. So I can experiment at least in this area. I chose the Tick Chart because it's the only chance to follow in the footsteps of the big players. In the last few months, I have set 20 different time units in the Tick Chart.



My time units range from the 8 second chart to the two month chart. On average, it generates 64 ticks per minute, and as time does not matter, I never find myself in the same time unit as most traders. If you do not want to lose, you have to act in time units in which the others are not on the way. On average, there are 11,520 candles a day in an 8-tick chart, while in a M1 there are just 1,440 candles. That's 700% more candles in one day. A big advantage: As volatility increases, more candles are formed. Breakouts are excellently broken down into smaller units. From this it is very easy to determine resistance zones.



With a zigzag setting of 8/4/2, I once calculated the movements within a trading day. It is quite clear that within a same time period more movements take place in an 8-tick chart than in an M1. The period shown here in the chart is the same, but the candles in the tick chart are a bit different, although the price spikes are always the same.



The result of May 29, 2019
In the 8th tickchart, 10,600 candles formed a total of 282 zigzag lines, which reached an average of 3.53 pips. In addition, we came in the range of 996 pip within 24 hours. In the M1 Chart, 1440 candles formed a total of 46 zigzag lines, averaging 7.72 pips. In addition, we came in the range to 355 pip within 24 hours.

Analyzing the 24 hours, we see that in an 8-tick chart, about 180% more pip are formed, as over 500% more moves occur in the zigzag lines. However, these zigzag lines reach only 3.53 pip instead of 7.72 pip. That's over 50% less.
Within this 24 hours 282 zigzag lines were created in the 8 Tickchart and in the M1 nearly 46 zigzag lines. In the following calculation, we assume that during the day the trader selects some of these trend trajectories and starts trading.

Since a scalper in the 8-tick chart has six times as many trend courses as in the M1, he also executes six times as many trades in the example. Let's make a comparison between an 8 Tickchart Scalper and an M1 Scalper. We analyzes 48 trades that take place within a certain period of time. Of course, the calculation is purely hypothetical, as a trading transaction depends on many factors.



Example A:
48 trades are executed with a 50% win rate. The spread is 0.5 pip in the case of profit and the total loss in the 8 tick chart is one pip. In M1, the total loss is five pip. I have made these experiences myself in recent years. We assume that both scalpers achieve the average pip size of 3.53 and 7.72, respectively. After a total of 48 trades, the 8 Tickchart Scalper achieved an advantage of 548% over the M1 Scalper.

Example B:
In the following case, the win rate was increased to 75%. The basic calculations are the same. It can be seen very nicely that after 48 trades there is still an advantage of almost 300% for the 8 Tickchart Scalper, but the advantage is reduced by an increase in the win quota.

Example C:
We now reduce the win rate to 25%. While the 8-Tick Scalper is still slightly in profit, the M1 Scalper has already lost more than 15 pip.

Example D:
In the example, we assume that both scalpers perform the same number of trades. In this case, the advantage lies clearly with the M1 Scalper, although the overall advantage is not so great. Of course, this is just a fictitious calculation that looks different for each Scalper. Working in the M1 with a stop of 0.5 pip is almost impossible. With the identification of the key candle, I was able to reach this 0.5 pip in the 8-tick chart. With the addition of the spread, I am lying on average of one pip risk. Price-to-earnings ratios of 1:10 are also achievable in the 8-tick chart, as one also draws his resistance and support zones in higher time units.



Let's summarize the benefits

Point A
Within 24 hours, eight times more candles are produced than in the M1. This forces you to react faster, but it also gives you more experience.

Point B
Although only 30% more candles are produced per zigzag line than in the M1, the speed of line formation in the 8-tick chart is significantly higher.

Point C
With 282 zigzag lines within one day, a new trend averages every 5 minutes, while the M1 takes an average of 30 minutes. So when I draw a resistance zone, I do not have to wait 30 minutes for a new chance, just 5 minutes. That's a big difference. This puts me in a position to pickup more trades within a short time.

Point D
With 996 Pip I get almost three times as much pip available that I can collect over the day. Since I can go short or long at any time, the possibilities are considerably greater. The most important point for me, which I have already posted several times, is the achievable Pip per minute. At 1440 minutes per day, I get 0.69 Pip per minute in the 8 Tickchart, while in the M1 I only make 0.25 Pip per minute. This is due to the significantly more educated ZigZaglinien.

The shorter I am in the market, the less risk I have of being stopped out by unforeseen price eruptions.
Since I have more zigzag lines available in the 8-tick chart, I can also reach my pip faster per minute. Of course, if an 8 Tickchart Scalper and an M1 Scalper start at the same time, they will reach the same number of pip in the first moment. But as soon as the trend changes, the 8 Tickchart Scalper gets out and trades in the opposite direction. The M1 Scalper is still in the trade because he expects another trend change in his direction.

Achieving 0.69 Pip instead of 0.25 Pip in one minute means:
In the same time, one reaches three times as much pip or in one third of the time one reaches the same pip. This is a very interesting risk minimization for me.
Of course, in an uptrend, it's dangerous to take the short pullback down. In the M1, this is often a high risk. Trading and flying have one thing in common. The most dangerous moment is the takeoff and landing. When trading, it is the entry and exit. This is where most mistakes are made. Therefore, the more candles I have available, the easier it is to determine resistance zones.

If I get eight times more candles a day, I'm also able to draw eight times more resistance and support lines. That means. At the same time I can learn eight times faster if my zones were drawn correctly.

This enables me to achieve a much better win rate than 50%. In addition, my broker will reimburse me for up to 25% of my paid spreads. This brings me to an average spread of 0.4 pip in EURUSD including all costs. This again increases the profit efficiency.

The only thing you need is a quick to run commercial screen. If you work with the MetaTrader I recommend the MT5, because the execution times are much faster. You should keep an eye on the ping times at the broker and your own internet provider and possibly optimize. VPS servers are an alternative.

All in all, I can say that as a scalper, I do not commit suicide on installments, but can be more than satisfied with the situation. Due to the very small stops, higher solder is easier to invest. It will be interesting if you accidentally get into a breakout. But I do not speculate on that, I prefer the normal trades. Small stop, high solder, quickly in and out again. Of course, sometimes something goes wrong, but I have eight times more chances a day and the next chance comes on average every 5 minutes.
When I started, and sometimes worked with stops of 30 or 40 pip, it was frustrating to watch my loss slowly get bigger and, with luck, I could easily finish in profit.

Of course, the course was often in the stronger profit, but then it was frightening to see how much of my profit I had to give up again, because the course suddenly changed the trend direction.

Scalpen means more freedom for me, because I do my trading business within a short time. This leaves me much more time available and I do not have to look at my screen all day to see if the course develops in my favor. Of course, I also occasionally run a trade with a trailing stop, but that does not stop me from scalping further. When I'm in the market with an order I'm sitting at the screen, when I'm free I'm not in the market. I found that calms the nerves tremendously.

I made losses with Scalping at the beginning because my stops were way too big. Although I managed to reduce my stops in the M1 to 3 pip, I was still not satisfied with the result. Every trader knows that optimizing one's own trading business is an eternal construction site. Even if you have found your trading direction, you can optimize it every day. And that you have to do, because the market will continue to develop.

There is a nice saying about it:

Learning is like rowing against the tide, as soon as you stop you're driven back.

I wish you a very successful trading day today

Best regards

What does "the market will continue to develop" mean?

Why we have to adapt to market conditions.


Hello too Slow,


Thanks for the important question. Since I had little time today I could not go into detail in the post. Therefore, now something more detailed.

In the last 10 years, the interbank market has changed significantly, firstly because a large number of private traders have discovered the speculation and have begun to act massively. That caused a veritable Brokerexplosion. Secondly, because the big players had to adapt to the changed market conditions with the start of the high-frequency traders.

In principle, the high frequency traders are very professional counter trend scalpers, except they have a little more capital behind them than we do full time traders. We're talking about professional scalpers who cut out small pieces of the trading cake. You're investing millions in your hardware and software because it's about billions of profits. You place your computers as close as possible to the respective stock exchange, because every millisecond counts.

The sales of these high-frequency traders reach on some days up to 50% of the total trading volume. They work with incredibly fast computers and programs. The speed of these programs is enormous, they can respond to price changes within milliseconds, so they can get in and out of the market faster. Traders who do not work with such a technique are clearly at a disadvantage.

In addition to the tremendous speed, these high-frequency traders have a few tricks up their sleeve that are a little worrying on closer inspection. They are able to use fast and mass orders to change the picture of supply and demand in a way that confuses investors and makes false trading decisions. Although these companies achieve only low profits, but about the high number of orders come together in the month considerable sums together. The looser are the long-term investing funds and pension funds - and of course the classic retail investors.

Let's look at the tricks in detail.

Wash Trades: I have already described this approach in previous posts and is particularly controversial.

The trader trades in here with himself. He hunts his buy order up to his sell limit or high, which then pushes the price down immediately. Or, in a rising market, a turnaround is suggested in order to buy cheaper again before the market turns sharply higher again. The goal is to push merchants out of the market or to induce them to make transactions that they probably would not have done in other circumstances.

Quote Stuffing: Thousands of orders are abandoned and then deleted immediately.

Thus, the high-frequency dealers generate a false picture of the existing relationship between supply and demand. The other traders can not analyze these orders in the short term and are confused. Since they do not know which orders are correct and which are only fictitious orders, this gives the high-frequency traders a time advantage, as they know their correct order. If several trading systems compete against each other, quota stuffing is often used as a very effective weapon.

Spoofing: The goal of outsmarting other program traders.

The own system is tuned to analyze, anticipate and exploit the reactions as well as the functioning of other algorithms. The market participants are also to be moved by the illusion of certain constellations to a desired reaction.

Sniping: Unfair market analysis

With small and fast outgoing orders, the market is searched for hidden orders. The goal of finding large buy and sell limits of other traders. Just before these thresholds, which promise the release large orders, then the own orders are placed. The limit order of the other participants will be triggered much later.

Scalping: Here is the decisive advantage, the speed of the systems.

As soon as the system detects large order volumes, they are on the market at lightning speed. So you can buy even cheaper than the other dealers. Even before you can govern, the high-frequency traders are already out and the course immediately turns in the other direction. The slow traders are virtually eaten.

This approach can not foresee any indicator of the world. That's why I recommend looking for clues. With the tick chart I am able to recognize the invested lot of these high frequency traders and to draw my conclusions from it. There are few ways to protect yourself from these tricks. Supply and demand is the most effective way for me to take a positive balance at the end of the month. It's all about misleading all traders in order to find their way up or down.

Attached Image (click to enlarge)

Here is an example in EURUSD. The price was on an upward trajectory and uncertainty created equilibrium. Within Equilibrium, there were some strong purchases that should give the impression of continuing to bet on rising prices. In my lower Lotsize table it is clear that within the Equilibrium the bearish movements were significantly stronger than the Bullish movements. This can not be seen directly in the chart. At point A, there was a strong move up shortly before the massive course down. Many sellers were stopped out. After the strong move upwards, many have bought because they thought that the upper resistance zone would be broken. With the move down, they too were stopped out. After that, the way was clear and 80 pip could be realized down. After that the spook was already over.

The market is changing so fast that we need to be creative. We do not have the money to afford us millions of dollars of software and employees traders that are misleading the market. So that we are not eaten by the bear we have to read his tracks and orientate ourselves accordingly.

Therefore, I wrote that we have to question our system every day to adapt us to the market conditions. For the big players, we small traders are just a collateral damage.They really do not want to do anything to us, but they still accept it.

We should think about it. What would I do if I was a big player? Would I betray my planned breakout beforehand or would I try to deceive everyone first?
Why do 90% of all traders lose their money? Because they get in at the wrong time. I already buy when the price is still down. This is against nature and many wait until the price goes up and then they push the buy button. But at this time I'm out, because the course is still going down. Of course, I do not always succeed, but if I've made a mistake, I analyze my mistake exactly and usually find the right key candle.

Mistakes are important learning steps on the way to success. I learned the most from my lost trades. Better a traceable loss than a random gain that can not be explained.

Anyone who claims that this market is simple has no idea about trading. Even the big players like Goldman Sachs go to the market every day without fear but with respect.

We small traders have a realistic chance, but with good sense, mathematics and science, we can not get on in this market. We just have to figure out what the big players are up to, that's the only thing that interests me every day. The market is not determined by news, rumors, the FED or ECB, but only by the Lot used on Buy or Sell. And behind it stands the opinion of a trader who presses the button at the moment and gives up his order.

I wish you a successful trading week

ILS system in trading



Hello dear subscribers,

If an aircraft wants to land safely in difficult weather conditions, it will use the existing ILS system. These are beacons that are emitted from the ground. Using the instruments, the pilot knows exactly where his assigned runway and aircraft are. If he now follows exactly these beams, he is able to accomplish a complete blind approach.

We have traders struggling with the same problem every day, because we too are constantly blindfolded and do not know where the course is going. There is a kind of ILS trading system and that is the reference course for me. Let's take a look in the examples below to see how the reference course could help us in our future trading.



In the chart you can see how a key candle forms at point A, because we had a strong resistance there. Then the price went down sharply. Based on the key candle I have marked a resistance zone. Now the course went to point B, where there was a strong demand market. This demand market pushed the price to the point C. There one could have started a nice trade in the supply market. The course went now to the point D, whereby thereby another key candle formed. From the point E onwards, a strong supply market was formed which pushed the price down to point F.

If you draw resistance and support zones, you will need a past price history, the so-called reference price. At point F you can see that we still have a reference course on the left side where we can orient ourselves. But when the price went down over the point F, the reference price of point D was no longer valid. But there was a new reference course, which was only a little further away at point B.



In W1 you can see the course of the EURUSD within the last two years. In the area of point A, the reference price was within a small range, at point B, the range was already significantly larger. The range was greatest when the course at point C ran to 1.11. In that case you had to go back two years to find a reference course.

In the case of the reference price, the past is important because the price often moves in certain price zones, resulting in resistance and support lines.

In principle, it is relatively easy to keep track of the reference course by simply opening a W1 and observing the course. A weekly chart is very accurate, but the smaller resistance zones can not be read from it. You have to change to a smaller unit of time. But then the candles turn so small that you can not see the zones. For a Scalper in the M1 a horror scenario.




Let's first look at the H1 of the last three days. At point C the course went up through a strong resistance zone to point D. Then the course went back to point C. Zone A was crucial for the course to go up again at point E. Then the course went from point F to zone B. Since the course has already run under the point E, this zone does not interest. Decisive is to compare the zone A with the zone B.



We are now in the M 15 and realize that the candles have become very small . The resistance zones are very difficult to identify. However, since we want to compare the two zones in the M1 with each other, the only option left is to create two different charts.



On the left side you can now see the zone A which is shown in the M1 and beside that the zone B which is also shown in the M1. Right now I have more reference courses that I can compare with each other. In order to get an impression of it, I have created a short video. In the 3 minutes you can see that the course is in a strong resistance zone. Immediately afterwards he ran down twelve pips. In equilibrium zone 1.12 there was a strong move up to 1.127.



You realize that this can be very advantageous to compare the reference price in the same time unit. Of course you have to adjust the charts from time to time but it helps to create resistance and support zones.

For example, working with Fibonacci will allow you to work in two distinct zones with two different Fibonacci. Basically, it's always about getting as much information about the price history. With the reference course, you can make it easier.


I wish you a successful trading day

best regards

Bionics, kudos for a detailed response. You have provided much to think about. Cheers

Hello TooSlow,

I can only give back the compliment, because you have been successful yourself for many years and I think it is exemplary that you, too, place value exclusively on the price chart. We smaller traders do not have $ 4,000,000,000 to run the price up or down by 30 pip. So we have to use our existing resources: our creativity.

We traders have a hard time, because our environment consists only of competitors. On the one hand, these are the big players who have so much money that they can trigger stops of 50 pip themselves. Our broker is also not on our side because if we enter a large trade he must immediately act against us. Of course, the broker earns on the commission or the spread but if we make just $ 1000 profit he has to pay us the $ 1,000. But luckily more than 90% of its customers lose their money, otherwise the brokers would have long gone bankrupt. Actually brokerage is a very nice idea. You just pick out the most successful traders and let the computer replicate this trade 1: 1. But I believe that being a broker would be more successful if you always do exactly the opposite of what 90% of the traders trade. Finally, there are our colleagues with whom we deal daily. Here are also friendships and similarities, but in the trade are all competitors.

A beautiful saying goes: If you can not beat a competitor, make him a friend. That's easier said than done, because how do you make a big player a friend? Most will realize that this does not work. However, it is enough if you can follow his footsteps and know about what the big player plans to do next. Then it is best to get in and out of where he does not expect it. Unfortunately, that sounds easier than it really is. Because there are more big players than we might love. If there was only one big player, you might still be able to rate it, but with so many in the market, things are getting harder.

I once described it so beautifully in a blog: There are only three types of fish in the shark tank. On the one hand, this is the shark that eats all other fish. Then there are the small fish eaten by the shark. And at the end there are the so-called washer fish, which are responsible for cleaning the teeth of sharks. The washer fish are not eaten by the shark, because they accomplish an important service. The sharks are the big players in the market, the fish that are eaten are the little traders that always lose and the washer fish are the few traders that can live off the trade.

If you ask a trader the question: who would he most like to be, there are only two possibilities: the fish that is being eaten or the washer fish. Of course, everyone wants to be washer fish, but it takes a bit of courage. Because if you are washer fish, you have to swim into the shark's huge mouth to clean your teeth. You can never be sure if you will not be eaten. And that's why most of them are not washer fish. They do not have the guts to swim in the shark's huge mouth because they are afraid to be eaten.
I also wanted to be washer fisf but how I could swim in the big mouth of the big players without being eaten. I have some friends working in the professional trading business in Luxenburg and London. I have been able to learn a lot from you in recent years, and when I meet her I ask only questions and then listen to the whole evening. In the meantime, I could write a book about what tricks the high-frequency traders are working with today. This is impressive for me as my friends move on a trade billions of dollars. Curiously, my friends envy me even though I act with much less solder. The difference is obvious, my friends are making billions of profits, I maybe just a few $ 1000. The billion profits belong to the investment company the $ 1000 profits belong to me.

If we understand how big players work, we will be able to multiply our profits overnight. That's why many years ago I started focusing exclusively on it. If a big player told me tomorrow that the EURUSD would rise the day after, it would be worth it to me just as much as it says in the paper. The chart image is the deciding factor, there I can see exactly what, when and how to do it. And my only chance is to react early. That's damn hard and a lot of work, but no one has said that trading is easy. If losing 90% it is a very interesting business for the remaining 10%. This is not like the lottery where only 50% of the profits are distributed. On the stock exchange 100% to the good traders are paid out.

The big problem in the stock market is the greed. Who comes here to be a millionaire tomorrow, is quickly taught otherwise. In recent years, I have gained a lot of experience and knowledge about the interbank market. I still do not know how to get rich quick, but I know how to get poor fast: to trying to get rich quickly. When I started working as a trader, I wanted to have a long-term, sustainable job that guaranteed me a degree of independence and freedom. The income was at first negligible, as an apprentice you rather have to invest money.

If you have learned a few years and be a master is in your field, no one is angry when you then reap the benefits. I am very proud to be allowed to practice this profession and I notice at the latest how good I am when a stranger asks me what job I am doing. After explaining to him what a Forex trader does, you can see it right in his eyes. He envies me for this profession and secretly he would like to do it. In Europe and America, there are only 10 doctors and 5 lawyers out of 2,000 people, but only just one person involved in stock exchange trading. I think we all can be damn proud.

best regards

Bioniccandle survey indicator


Hello dear subscribers,

In the past, I've written extensively on the Bionic Candle several times and why I've developed it. What always bothered me in the past in a normal chart picture was the upper and lower wicks. The larger the time unit I changed to, the bigger the wicks became. This confused me more. I wanted to create a candle that shows me its strength at a glance. With the development of the Bioniccandle a very good result could be achieved.

There are only two movements in the bionic candle, one main movement and one pullback. I have often reported that the pullback is more important to me than the actual main move. The larger the pullback within a candle, the weaker the candle and the smaller the pullback, the stronger the candle.

Let's look at an example



In the picture, we see an uptrend first, followed immediately by a downtrend of 30 pip each. As a time unit, I used a 256 tickchart comparable to an M5.

A
The course starts relatively strong at first. The first major movement is the strongest, but there are some objections from the bears due to the pullbacks.

B
At first we are in an equilibrium, which is easy to see that the pullbacks on both sides are very large. There is a bullish candle that has a relatively small pullback. The subsequent downward candle is very weak, a clear sign that the price may go higher.

C
The upward candle at C breaks through a resistance zone, the candle is relatively strong and ensures that the course continues to run upwards.

D
Here we see that the upward candle is very weak due to the pullback. Although the bulls are trying to push the course up again, but the course is initially a bit down. Based on the pullback that forms in the bearish candles, you realize that it is not a strong pullback. Our resistance zone at point C will not be overcome. Here we see that the upward candle is very weak due to the pullback. Although the bulls are trying to push the course up again, but the course is initially a bit down. Based on the pullback that forms in the bearish candles, you realize that it is not a strong return. Our resistance zone at point C will not be overcome.

E
A strong bullish candle with no pullback arises, showing how strong the resistance zone was.

F
The price is now very high and the two bearish candles are not strong. From point E to point F, the strongest bullish movement in this trend occurred.

G
On another return, we see the bearish candles getting stronger, but the bullish strength is still at an advantage.

H
Although this is only a small return, but you can already see here how strong the bearish pressure is slow. Exactly this area is already a sign to me that the course will not run too far up. However, a strong resistance zone once again forms a strong bullish candle with a small pullback that keeps the price higher.

I
In the area you can see clearly that the bullish candles lose significantly in strength. There are three strong bearish pullbacks. With the information I have already received at the point H & G on the strength of the bear candles, a good sign of a turnaround.

J
The price is initially down and a key candle is forming which could stop a possible uptrend.

K
The course is initially held back by the strong movement that has gone up from point H out. However, one can already see here that the pullbacks in the two bullish candles are very strong. This shows that they are weak upward candles. Our resistance zone at point C will not be overcome.

L
The downward movement is getting stronger, the small upward candle is relatively weak, which suggests that the price is still down.

M
The bearish move downwards becomes significantly stronger, which is also logical, because from point E to point F we had the strongest bullish movement. To break this zone you need many sales orders.

N
The course also stops short of this resistance zone and you can see that the upward movement is relatively strong. But the previous strong downwards candle can not be broken.

O
Here you can see that the bulls are slowly starting to fight back, but the bears are still on the stronger side.

P
The bears are getting weaker, which is due to the opposite equilibrium at point B.

Q
The downtrend has weakened a bit. That gives the bulls the opportunity to fight back.

R
The two upward candles are medium strong. The bulls had their chance but it is not yet so far.

S
The bears had to fight because the bulls got a little bit stronger and now there was a very strong bearish down movement. However, this movement was directly opposed by the bulls. Then another uptrend began.

Of course, you can not pinpoint each turnaround with the help of candles. Due to the Bioniccandle I get significantly more signals that give me better information than a normal candle.



Since candles experience moving in a zigzag line up and down, it is relatively difficult to compare these candles with each other. I wanted to create an environment where I could compare the bionic candles next to each other. The Bioniccandle survey indicator was created for this purpose.

Surely you have already noticed that the indicator does not display Doji, or in this case an empty field is created. Although a doji means an uncertainty, but since open and close are the same, it is not relevant for me course. Basically, the indicator distinguishes between upward and downward movements. We distinguish between main movements and pullbacks. In the case of the bullish candle, the pullbacks are drawn in red and in the bearish candles the pullbacks are drawn in green. Of course, you can design the colors differently.

In addition to the main movement and the pullbacks you will notice that there are candles that are completely gray. This is a candle without a pullback. These candles can also be displayed in different colors. With the help of this indicator you will be able to see immediately how strong the individual pullbacks are in the movements. This makes it easier to compare individual candles. I have deliberately separated the main bullish and bearish movements in the indicator. You could also place all the candles next to each other, but that is very confusing.

This indicator is very individual and flexible, we look first at what he can do everything.



On the left side you can see the individual settings that are possible. For that it is important to know which settings cause what exactly.

With 0 and 1, you decide whether a pullback is displayed or not.

With 2 and 3 you decide whether the main movement should be displayed or not.

With 4 and 5 you decide if the candles should be displayed without pullbacks.

With 6 and 7 you decide if a line should be drawn. Please note that the line does not take the pullback into account, but only includes the main movement.

On the right side you will find the concrete settings for the lower display. The line width of five was only created to improve the presentation. In the main chart I work with a width of 2-3. I optimized the main movement with DarkGray and the setting of 515151. That's the best way for me.



This is basically the same setting as before, except that the candles that do not have a pullback are shown with a different color.



In this case, all candles with a pullback were omitted and only the candles are shown that have not formed a pullback.



Here you can see only the pure pullbacks. This is a very interesting presentation but takes some getting used to. The smaller the pullbacks are, the stronger the trend. The color might be a bit confusing, but you can change that at any time.



Here you have the complete package, containing the main movement, the pullbacks and the strong moves without pullbacks. Of course, you can change the colors of the three different types of movement.



In the example, only the pure main moves without pullbacks are made visible. Thus, a trend strength can be detected quickly.



In order to visualize the representation a bit better, you are able to use a line to narrow down the main movements.

The indicator can be used both in the normal chart and in the tick chart. Although this is an indicator, it directly reflects the price scale and is based on the calculations of the bionic candle. If you work with the indicator, look at the pullbacks in the individual movements and try to create a derivation. Still, the biggest benefit is to immediately realize how strong a single candle is. Of course you can not foresee the next candle movement, but we know that trading is all about probabilities. And they may now be able to turn the odds slightly in their favor.

I wish you a great success and would be pleased to receive your feedback

best regards

Hello dear subscribers,

After the turbulent and interesting last days, my wife and I decided to spend a few days in Italy. On Lake Como, we will relax a bit and enjoy the delicious Italian food. On the return journey we will make a short stop in Switzerland. There I meet with a friend who worked for Virtu Financial for several years. Virtu Financial is one of the largest high frequency trading and market making companies operating on over 230 exchanges and markets. My friend has made many experiences in recent years with the controversial high-frequency trading strategies and knows the tricks with which many high-frequency traders proceed. There may be some tips to protect us a little more. I am very curious how we can use this for ourselves.

I wish you a successful trading week

best regards

Its going to be an interesting discussion!!
Have nice trip

first of all thank for thread.so much information.can you make a video with summarize all this information.thanks again

Hello rosalieone,

Yes I am convinced that there is interesting information. Tomorrow I'm in Switzerland and then we will hopefully know something more. I will definitely report in detail by the end of the week.

Lovely wishes

Hello dear shonx,

First of all thank you for your compliment and your kind words for our block. I basically like your idea very well, but there are two major challenges.
Since I worked as a trainer for communication for many years I know that in a lecture not only the words, but especially the rhetoric is a decisive factor. I was born in Germany, my English skills in the area of rhetoric are rather modest.

In a video lecture about 100 words per minute are spoken. Since my blog consists of 300,000 words, it would create about 50 hours of video material.
Editing and cropping video takes about 4-6 times the time of actual video. That would be a time of 300 hours or 40 working days. The biggest problem, however, lies in the language barrier. In addition, we communicate with each other in a very specialized area and that does not make the whole thing any easier.

At first glance, a video seems to be the faster knowledge transfer, but that is deceptive.

On average, you read 300 words per minute. That means after about 17 hours you would be through with this blog. That would be 3 times faster than watching this blog in 50 hour long videos. Creating a synopsis is also not easy as this blog is an ongoing development, a kind of never-ending story. Leaving some things aside could lead to misunderstandings.

The blog Equilibrium the key to success, I originally launched to create a kind of diary for me and to explain my own procedure. As you begin to write, you'll gain more ideas and insights over time. This opportunity should not be missed and I can recommend this strategy only to anyone who wants to progress.

The different blogs at FF often contain awesome information and really good tips, and for that the reader does not have to pay a dollar. The problem is filtering out the right information out of the huge amount of information. Whether my blog contains good and important information will show the future success of subscribers present here. If a subscriber optimizes his success based on this information, I would be happy about it in two ways. First, because he earns more money and secondly, because it reinforces the assumption of my market view. This will bring us all a little further. And that is exactly the goal of this blog.

Lovely wishes

So the discussion ? interesting ?

Learning from high frequency dealers


Hello dear subscribers,


As I've already said in a few posts, high-frequency traders have entered the stock markets in recent years and have made life difficult for big players such as banks, asset managers, life insurers, pension funds and mutual funds.

A meeting with a friend from Switzerland who worked for Virtu Financial, one of the biggest high-frequency trading and market-making companies, has opened my eyes in some areas. Basically, our trade is clearly different from the high-frequency traders. It's like comparing a car to a Formula One race car. The processes and the strategy are not comparable, so it is very difficult to derive concrete recommendations. Nevertheless, there is a ray of hope to which we can orient ourselves.

High-frequency traders are, in principle, scalpers who trade within seconds after having previously scanned the market for supply and demand. In principle, every trader who has enough money can get the same market overview. The art consists in the interpretation of the data obtained. Of course, among the high-frequency traders, there are also some candidates who read certain data by means of unauthorized means, which can be heavy proven by the regulators.

Comparable is this approach with the Darknet, which obscures the IP origin. While access to the Internet via the Internet provider is running, in the Darknet access is routed through different computers to hide the origin. For this purpose, the data is encrypted and sent to a random computer in the network, this forwards the data, but retains the address of the sender. So the next recipient will know from where the data packet came last, but not where it originally came from. The final recipient decrypts the data packet, processes the request, and returns the answer in the same way that it came. This is how a data exchange takes place in Darknet.

However, the stock exchange always knows which address gave up buy or sell orders. But if a trader in London uses his order to scan the market for supply and demand and transmit that information to another trader who gives up the crucial orders, it's hard to prove.

If you imagine the stock market as a big sea, it is logical that a large container ship produces larger waves than a small speedboat. This makes a container ship faster to locate. In addition, a container ship takes forever to turn, while a speedboat can turn almost on the spot. A speed boat on the stock market could change a lot.

More than 10 years ago, a number of successful investment bankers, creative computer scientists, specialist network engineers and physicists with doctoral degrees have joined forces to usher in a new era on the stock exchanges. The approach of the idea: size is not important, you have to be fast.

First of all, the algorithms were developed that could automatically deliver massive orders within milliseconds. By hand, a few hundred traders would not be able to.
The high-performance computer systems built for this work with the fastest processors that are not yet on the market. The money does not matter, because you can afford a lot of technology for $ 2 million profit per trading day. The fastest processor takes much less than 1 microsecond to exchange data. Thereafter, the processors are still overclocked so much that the computing power for the algorithms only takes 0.1 microseconds.There are special employees at the chip manufacturers, who only take care of these optimizations. By contrast, the computing power of the new Intel Core i9-9980XE @ 3.00GHz is very sluggish.

To send the orders to the stock market, fast data lines are required. Fiber was previously a fast standard, after which the microwave was able to transmit data up to 40 times faster. Data is transmitted within fiber optic cables by means of light pulses. With a new technology from Australia, this light is simply turned and can therefore absorb more information. This allows the data to be transferred up to 100 times faster than before.

The stock exchanges sell the high frequency traders trade data and computer places directly beside the stock exchange computers. The shorter the way to the stock exchange, the faster the trading implementation. The decisive advantage lies in the deeper insight of the electronic order book, in which all buy and sell orders arrive. The exchanges offer different packages. A five-fold data update per second or in the luxury version ten times more data feeds. So within 1 second up to 10 data updates can be received from the main computer.

Of course, Goldman Sachs' big players can afford those data feeds, but the key point is that the custom algorithms evaluate the data feeds and place them in a dedicated platform. From this, the trading decisions are made.

Every microsecond the buy and sell offers are displayed on special screens. The trading platform does not comply with our known principle of price-time priority. The basis is breaks in the trade between 10-50 milliseconds, thus creating a uniform starting point. Just as there is always a fixed volume value in the tick chart, the breaks of 10-50 milliseconds are written down there. A kind of microequilibrium. Now we realize how important Equilibrium is for successful trading. That was a decisive hint for me.

Parallel to this run special calculators that scan the market and look for hidden orders and stops. Among other things, they work with the tricks already described: Wash Trades, Quote Stuffing, Spoofing and Sniping. The resulting losses are in principle only a small collateral damage. The information of these particular computers run into a host that internally makes the decision: yes or no and buying or selling and then gives up the ultimate order.

Thanks to the special programming, the main computer recognizes when a given address always buys certain stocks or currencies within seconds. From this a recurring principle is recognized and the high performance computer comes before the secret buyer. Within a millisecond now very high quantities are bought and thrown back a few seconds later with a high profit in the market. This works in 4 of 5 cases. Very interesting is that the calculator can distinguish the different buyers or sellers from each other.
When an ACDC concert takes place, you are standing at the front of the people queue at the ticket counter and there are still 15 cards, then you know supply and demand. They buy the last 15 tickets for $ 1,500 and then sell them to the highest bidder. You will earn at least $ 500 within a few minutes. According to a similar principle, the high-frequency traders work because they always know supply and demand with their special programs and strategies.

The stock market and supervision have no problem with the market becoming divided into a two-tier society. As long as everyone who can afford it gets a quick data feed, that's ok. The stock market sells their fast data feeds and earns ten times as much on a scalper as on a daytrader. In addition, the high-frequency traders increase volatility tremendously. This is a good figurehead for a stock or currency on the stock market. So why bother the high frequency trader?

Virtu Financial made losses only on a single day within 5 years (2009 to 2013). That was a total of 1,238 trading days. Goldman Sachs lost about on 124 days in the same period. Goldman Sachs is absolutely top with a 90% win rate, but with a 99.8% win rate, the Scalper Virtu is clearly outperforming. Scientists investigated on Virtu's trading activity found Virtu not taking much risk in trading. Scalpen seems to be the more profitable business.

In the meantime, however, that has changed a bit because other high-frequency traders have joined the market and make future business difficult. Long-term players such as banks, asset managers, life insurers, pension funds and mutual funds have already reacted to the high-frequency traders. They migrate to other markets, or set up their own markets, which are banned for high-frequency traders. As high-frequency traders take advantage of speed, more and more big players are throttling their orders and trying to get all of their sub-orders to hit different exchanges simultaneously. For example, high frequency wheels lack the time to respond to orders spread across multiple exchanges - and big players and funds can buy their paper at the current price.

Virtu has gone public, many believe that there are emerging problems for the high-frequency traders, because Virtu did not need money. Many high-frequency traders have withdrawn and the technical progress is already exhausted. Virtu has earned $ 7,000,000,000 in revenue over the last 9 years. The money is missing from the other big players. Earnings after taxes were around $ 850 million. Virtu's earnings after tax of $ 284 million in 2018 shows that it still works great.

The platforms these professionals work with can not be compared to a Metatrader or Ninjatrader. A lot of things are fully automatic, people only intervene when computers and algorithms fail. Sometimes the algorithms are written so elaborately that even the programmers have problems finding possible sources of error. As a result, there were always failures or massive problems in the past.

About the existing EAs on the market, my friend could only smile. If one would compare the programs of high-frequency traders with a EA, it would be like comparing a NASA space program with a code that controls a refrigerator. The algorithms of the high-frequency traders were programmed according to the market, each market has special requirements that are taken into account. Within a market, the algorithms are changed within seconds to respond to new demands. Even if an EA were elaborately programmed, the challenge would still be with the processors and the data lines.

A major disadvantage is the programming language MQL4 or MQL5. Although both languages support all object-oriented programming standards except multiple inheritance: data encapsulation and type extension, inheritance, polymorphism, overloading, and virtual methods. I already noticed this difference with my Java knowledge. The downside of MQL is that you are not able to build independent applications because MQL is only connected to its corresponding platform and the programs only work there. Java, on the other hand, has platform independence and runs on the phone, workstation, or enterprise class server, regardless of the type of operating system or hardware. Write Once Run Everywhere. Interfaces can be developed to all environmental systems and thus fit into most existing IT infrastructures.

Java programs are initially compiled into neutral byte code. These bytecodes are similar to machine instructions, but are not specific to a particular machine. The source code in Java is compiled into .class files that contain the program in bytecode. These bytecodes can now run on any platform that supports Java. They are almost interpreted and executed at startup.

If MQL had a similar structure, one could easily integrate its indicators or EA into other systems. Another problem: Our EA and indicators require a lot of performance and may delay trading execution. Therefore, a trading screen where we sell our orders should be free from all indicators.

So far, the big players such as banks, asset managers, life insurers, pension funds and investment funds have claimed the market for themselves. Then, 10 years ago, the first high frequency dealers came onto the market and took away money from these big players. They in turn have upgraded and made a counter-attack. Therefore, the market has become even more confusing and difficult. And in the future, it will be even harder to earn money in these markets.

An important insight is that predicting a future course from the current chart is wrong in most cases. The recommendation that we pay less attention to the current chart image and focus more on the Equilibrium, so the small breaks in which the price is balanced.

How can we protect us from the high frequency traders?

One possibility would be to switch to markets that are uninteresting for high-frequency traders. These are markets with low volatility. But we also need some volatility to be successful.

The second option would be to switch from EURUSD to the trading hours from 05:00 to 09:00 CET, from 11:00 to 14:00 CET and from 21:00 to 00:00 CET. But even that makes only limited sense.

High-frequency traders are only active in markets with high volatility, the bigger the better. The higher the volatility, the greater the chance of unpredictable breakouts. Since I seldom handle high volatility this is rather positive for me.

An ATR calculation for e.g. The last 500, 100, 50, 10 and 5 candles are recommended, so you can immediately see a strong increase and can act with extreme volatility with caution.

My friend has absolutely confirmed me in some things. Trading in the tick chart with the simultaneous consideration of the equilibrium are the best options for me. One would only have to pay more attention to the Equilibrium. In addition, Scalpen is the best trading strategy because you are short on the market and have done your business in seconds. So you can switch from one market to another and keep the risk low. The higher the lot and the shorter the length of stay, the less risky the trade. However, one must also have the right information, otherwise it costs the right amount of money.

We should look for medium volatility and wait for extremely high or low volatility or go to other markets. If the big players argue in the market, you can only lose.

Positive he finds the small stops of 0.5 pip, but a chance risk ratio of 1:10 for him is a much too high risk, because one are far too long in the market. The smaller the unit of time, the better, with time being an uninteresting factor in the market. The focus on the Equilibrium is interesting because it shows the uncertainty of the market. Out of certain equilibrium, it can only run up or down a lot.

You do not always have to be the first in a turnaround. His recommendation: First let the others initiate the turnaround and then you wait for the pullback. When you realize that more are coming into the market, you just step in for a few seconds. If the 10 lot win is not enough for you, you can increase the number anytime. Virtual stops that the broker does not see are beneficial. He was enthusiastic about the fact that I could act as a professional trader with a maximum of 1: 400 and in the case of total loss no additional payment must be made. In addition, there are no requotes and an additional 20% discount on my spread. That puts me at 0.4 to 0.45 Pip total cost per trade. While these are still lunar prices versus the high frequency traders, I have far less risk in case of total loss.

High frequency traders do not have this advantage. Nevertheless, their success is much greater.

In the future, speed will no longer bring the absolute advantage, the new strategy is called confusion. In doing so, a course is moved in an equibribrium until most are stopped out or get off. Then comes the decisive movement until the next equilibrium.

At the renko is the pip, at the candlechart the time and at the tickchart the contracts the fixed factor. For the Equilibrium there is something like that not yet in the MT4.

I will think about these suggestions in peace, possibly a new Equilibrium chart will be created, which defines Equilibrium as a fixed value. Or there is a combination of both. Because the advantage in the tick chart is the number of plumb bob we get. In combination with the Equilibrium this could be very exciting.
Incidentally, my friend confirmed to me that the high-frequency traders work with the Fibonaccis. The Fibonacci are included in the algorithms of the calculation programs. Not to generate trades, but to find other traders even easier. Of course, there are other indicators that are respected.

Nevertheless, I believe that the best algorithms have their limits because they were programmed by humans. Although they are able to execute much faster jobs, they are not able to react properly in exceptional situations. And these exceptional situations will trigger the long-term investing big players again and again and thereby prevent the high-frequency traders have a safe market entry and massively miscalculate.
The programmers are convinced of their algorithms, but very few would use their own money to trade with it. In addition, different algorithms have been programmed for the high-frequency wheels for safety reasons, so that a single programmer can never have a complete overview. A good protection against possible competition.

When the two towers of the Deutsche Bank were built in Frankfurt in 1984, there were 20 different companies responsible for different alarm systems in the main safes. This made it impossible for a company to rob the safe at a later date. Trust is good, control is always better.

My Swiss friend also read some posts from me and was impressed by the many creative ideas. Of course, my trade is no protection against a sudden breakout of a high-frequency trader, but he has given me something very important. With the nature of my trade, I am very rarely in the focus of high-frequency traders. In other words, I have little exposure to these high-end scalpers because I am dealing in zones that are either too uncertain or too unattractive for high-frequency traders. In any case, there is still need for action to catch even better entrances. In return, I often catch the zones of the long-acting big players and this guarantees a faster and more sustainable trend, which has a positive effect on my trade.

Furthermore, the tracks of the long-acting big players are the most important indicator. They have responsibility for millions of retail investors and investors and therefore need to be long-term and strategic. We should avoid the high-frequency wheels because we can not follow your actions anyway. For this we need a deeper market insight. I always thought that the DOM in the futures market would bring this market insight, but there are an incredible number of pseudo orders that are deleted within milliseconds again. This creates a false truth of supply and demand. The only truth is the resulting candle, but the moment we see the candle, that's already the past.

I have not found the optimal solution yet and maybe there will never be a correct solution. But the crucial point: The most successful traders in the world rely exclusively on the Equilibrium. This path seems to be the right one, now it just has to be optimized. It looks like a lot of work and time, but in the end it could pay off for us all.


best regards

Thanks a lot, super interesting !
more than 1200 days without losing, i nearly fell from my chair.
Interesting the fibo mention and the ATR.
Problem with equilibrium is to be overbought or oversold all the way up or down until it reverse.
Maybe ATR is a solution

Hello rosalieone,

I also found the information very exciting, to what extent they will help us, we will see.

An idea that I brought from Italy could help us. Every day on Lake Como we watched the kite surfers, how they started, their turns and their extraordinary jumps. Most of the time they did not start until around noon and a few hours later it was all over.

To go kitesurfing you need wind. Which wind is suitable for kitesurfing? Today, almost every kite manufacturer has a light wind kite in the offer that promises the gliding experience even under 10 knots. With the right board and the right driving skills, this is actually possible. At the top, of course, it gets more and more dangerous and at some point is reserved for the pros. The best is a constant wind, which side-shore (the wind blows parallel to the shore) or side-on-shore (oblique onshore wind) comes. With appropriate material and enough experience, winds of more than 40 knots are possible with a kite. Beginners are in good hands between 12 and 22 knots.

The wind direction is almost more important in kitesurfing than the wind force.

Since kite surfers mostly drive at right angles to the wind direction, in side- or side-on-shore winds the kiters always drive away from the shore and then back to the shore. As a result, everything is better distributed on the water. Onshore wind can of course also be gekitet, but then all go parallel to the shore and depending on how full it is in the water, it is difficult even for experts to come through. Onshore wind also has the disadvantage that falls near the shore can be very dangerous, because there is a risk of being pulled onto the land.

Depending on the experience, kiting is possible between 10 and 40 knots of wind speed. Every kiter has to find his comfort zone individually. If there is not enough wind you can not get ahead, too much wind could be dangerous.

We traders should also find our comfort zone, the ATR helps us. Too little volatility means one is too long in the market, too much volatility may mean loss of control.

It is recommended to calculate the ATR in the time unit in which one acts. I have three different ATR areas that are critical to me. The last 900, 30 and the current candle. The last 900 candles are a longer term average, the 30 candles a medium term average and the last candle the current situation. With these three values, I can immediately see how the ATR behaves and align my trading style with it.

It is crucial to find out in which area you feel comfortable and act best. Once you've set your range, an alarm could show that the range is leave.
The ATR is just one point of many to watch out for, but it's definitely a start once you've found your comfort zone.

best regards

If we put 3 MA on a chart with different periods and we've got a movement up or down the three MAs separates until an exhaustion where they stop and come back to an equilibrium. Same with ATR ? What about calculating a speed of separation between the 3 periods and then we could see if it goes up to some ''usual values'' ?
About kitesurf a friend of mine took a first lesson in africa. The wind came, lift him 15m and he fell back on earth breaking his both feet.

[quote=rosalieone;12342627]If we put 3 MA on a chart with different periods

Hello rosalieone,

Kitesurfing was very dangerous. In the past, there were no safety systems, which sometimes led to very bad accidents. Nowadays, there are quick-release systems, in principle as in skydiving: you simply pull on a red tab and then can be detached from the paraglider. This makes kitesurfing safer.

There are many good ideas for optimally displaying the ATR. With a 16-tick chart (15-second chart), I quickly see a change in volatility. In addition, I let the chart show the above-average traded lot, which clearly improves the overview. In the M1, an ATR strategy makes sense, but I know so less. There are different calculations of an ATR the calculation of Wilder differs significantly compared to the Bioniccandleberechnung.

Crucial is what you want to derive from it. As a Scalper, I'm looking for the harmless entry points of a turnaround, the ATR helps me in this area less, it only informs me about the volatility that currently prevails in the market.



Perhaps this indicator could help you, it shows you the range in the chart and you can enter the number of candles to be calculated. I hope this helps you further.

best regards

Thank you.
I've got the chanel but not the numbers

Hello rosalieone,

There are no figures in the ATR indicator, this is the Bionic Supply and Demand Indicator Post 833.

best regards