The Equilibrium, a key to success!

Hello asgcorp,

That would indeed be a very interesting idea, unfortunately, not all big big players offer a data feed for brokers. Deutsche Bank is one of the largest Forex traders in the world and as far as I know they are not providing all data to a broker. Most trades with the broker (except ECN brokers) are not forwarded to the interbank market anyway. If 20,000 customers are short and 20,000 customers long, there is no risk for the broker. Only if the ratio of long and short positions is unbalanced does the broker secure itself via the interbank market. That's why many of our trades do not even come into the market, and thus no volume is created. The interesting thing is that the future volume is already very close to the Forex volume. The price movements of the EURUSD are identical to the Euro FX. The future price minus the swaps is equal to the forex price. The EURUSD forex market is only about 100 times larger than the Euro FX futures market. If the future DOM trades at a price level of 400 lots, then 40,000 lots would have to be converted into the forex market. But you are absolutely right with your idea, unfortunately this will remain an unfulfilled dream for all of us. But we are creative and know, how to help each other. With the absorption at the individual price levels, I have already come a long way in the last few days and will report about it in the next few days. The big players work with all the tricks and today I understand why I lost at the beginning of my trader career. The forex market is the heaviest market in the world, but with the right data and interpretation it will be a lot easier.

I wish you a successful trading week.

Best wishes

Forex and Future Hyprid screens


Hello dear traders,

With our new project # 7 we try to use the data and information from the futures market for our trading in the forex market. The experiences already made are very promising and show interesting perspectives. The data from the futures market are much more demanding because they also contain the correct volume and the number of trades. While we get two correct data streams in the Forex market (OHLC and Time) there are already four correct data streams in Future Market. This opens up an incredible field of data interpretation. In the past, I have traded my resistance and support zones based solely on supply and demand in the Forex market. Maybe luck, chance and my experience helped make it profitable for me. When my brother asked me many years ago what strategy I am using, my answer was: intuition and experience.The problem with intuition and experience is that you yourself can not define any measurable progress. Only when you research and write down your personal strategy will you be able to analyze, improve and recognize the changes. As an independent trader, you do not have a boss who asks for a regular work report or who asks you what you have done in recent weeks to get better. You can only change or improve things that you are aware of.

Uniting the forex market with the futures market is a challenge. Although the volume, the footprint chart, that Oder Flow and the Volume Profile are an interesting alternative in the futures market, these tools are not a holy grail. Whether the EURUSD possibly reaches the parity or rises back to 1.60 I do not care. If my friends ask me where the EURUSD currently stands, I often can not say it because it is unimportant to me. My basic definition of the market is supply, demand and equilibrium. In the Equilibrium or sideways market, big players collect Ask or Bid because they are pursuing a particular goal. Once you have the required number of contacts together, you have to confuse the market to take as few participants as possible up or down. So accumulation, then movement up and then comes the distribution, then the movement down. Accumulation and distribution does not always have to be in a sideways phase or in an equilibrium. This often happens towards the end of a trend. The challenge is to recognize this absorption in each phase. As I have written many times before, news is of no importance to me. Here's an example: Imagine the big player Goldman Sachs accumulating a large number of Ask in an accumulation phase. That can sometimes be fast some 100,000 Lot. Suddenly, information is coming in that the euro is getting weaker and the dollar is getting stronger. What is Goldman Sachs doing? They push the course up brutally and then gradually realize their profits. The press then writes that the euro has recovered. Of course, the big players are focused on market data and currency strength. But we must never forget that it is the big players who determine with their strategies where the market is going. So let's forget the news and concentrate solely on the strategies of the big players. The footprints of the big players in the market are the large absorption packages from Bid and Ask. We have to identify these, interpret them and create our strategy from them.

For the project number 7 I tried to direct my eight screens to the forex and futures market. For this I have created a short video to give you an impression of it. Please note that we are in a project and therefore I use different screen views that are constantly changing. On the eight screens I only use the price data from the EURUSD Forex and the Euro FX from the futures market.



To say it basically, you do not need an eight screen to be successful. Perhaps eight screens can also distract and confuse of the essence. The advantage of eight screens is the speed. In certain market phases, I do not have to switch to other time units or upload certain charts first. Within a trading day, all eight screens are used in certain phases. This saves me time and I am able to react faster. Another aspect is very interesting. If I have found a new screen setting or a new display style, I am able to test this setting for a certain amount of time without affecting my main view. Within a few days I will be able to find out if this screen shot will help me or not. By that I do not mean new indicators, but the pure presentation of my existing indicators. In the forex market, I work exclusively with the price and currency strength in the futures market with the volume and number of trades. Very interesting is the time display in seconds how long the price has been in certain price regions. My screens are a kind of ongoing project, and are constantly changing. The market out there is also changing every day, so we too must be ready to face this change. It is interesting that with this strategy I can look deeper and deeper into the market and at the same time optimize my view. Anyone who thinks that many screens are confusing should never work on the New York Stock Exchange or get to know day trading legend Stephen Kalayjian. Incidentally, he works very successfully with more than 50 screens. The following video accompanies Stephen Kalayjian a day in trading.



Kalayjian has more than 30 years of trading experience in stocks, futures and currencies. He began his career on the American Stock Exchange, followed by positions on the New York Stock Exchange, the COMEX Division of the New York Mercantile Exchange and the Chicago Board of Trade. From 1992 to 2004, he traded his own capital as well as various family offices and became a successful day trader trading nearly two billion shares of US equities. He works without volume with a Pattern Recognition. He earns between $ 250,000 and $ 500,000 a year. But one more important thing to note is the type of automobile he owns. 2013 Honda and 2002 Mazda. I find that impressive when people stay normal despite their success. We realize that you do not necessarily need the most advanced volume, footprint, DOM and Oder flow trading platforms to be successful. Perhaps training at the New York Stock Exchange and having a 30-year experience will help. There is no substitute for experience. Since I do not have more than 30 years experience, I concentrate on our further project Nr.7.

Certainly my strategies and techniques in the forex market will change over the next few years, which is also a prerequisite for success in a rapidly developing market. But despite all the changes and adjustments I have remained true to my principle in trading for 10 years. Demand, supply and equilibrium are the keys to success. This will not change in the next 10 years.

I wish you a successful trading week

best regards

great post as always Bionics

In the footsteps of the big players


Hello dear traders,

In the past, I enjoyed working with the COT data, which was released every two weeks and showed the positioning of institutional and retail traders. Through a friend of mine, who accompanies our project 7, I was made aware of an interesting indicator in the trading platform ATAS. I have analyzed today and the result is incredible. With the indicator one is able to display the traded lot within one day as delta. So you could simulate a kind of short-term COT indicator, although no open positions are shown here. With a filter I have now divided this traded Lot. 1-4 lots for retail traders and 5 to 100 lots for big players. 5 lots are often used by the big player algorithms to buy Bid or Ask very quickly in sideways markets. With it, you can buy up to a few 100 lots within seconds, without displaying large purchase orders in the DOM. With this is a big player able to disguise his true intentions. That's why I chose the classification in the indicator.



In the upper area you can see the price history of today. The yellow line is the delta of the traded 1-4 lot and the blue line is the delta of the traded 5-100 lot. Up to the blue arrow at 2:35 am the retail traders were still on the right track. After that, the delta has slipped into positive territory. This means that the majority of retail traders today were long-oriented. The majority of big players were short-headed. In principle, it is also logical, because if all traders wanted to trade down and no one up, the price would not move. As we known, the big players move the market, also we try to follow them. It is interesting that this indicator can also be used in the tickchart and thus can recognize very fast and up-to-date information about the orientation of the individual market participants. A course can only moved if there is a participant who wants to buy and gives another participant who wants to sell. The question is, which participants would like to follow in the long run, in order to act profitably. In principle, this indicator is very interesting, but it should be noted that in the so-called accumulation phases, the indicator could not help in the short term. And once again it becomes clear why so many retail traders lose. They lack important information about the actual market events. Unfortunately, we do not get this information in the forex market, but if you want to be profitable in the long term, you should deal with stock market data sooner or later.

I wish you a nice evening

best regards

I have used similar techniques using prop software I no longer have access to. If this is legit, I would be very interested in using it. However when I ran a search, I came up with two initial sources - and there may be more, I stopped at two.

Now, I was going to ask you which one (if either) was the one and post the two names of the sites, however that's going to see your thread in the Commercial Section, so I won't. What I have done, is message you instead. Please feel free to ignore this if you wish, as I know you will share the info in some way at some point in the future.

[quote=lemercenaire;12524334]{quote} I have used similar techniques using prop software I no longer have access to.

Hello Lem,

ATAS is not the only professional software, there are many good trading platforms available on the internet. I have also been using ATAS for a few months now and have already found some bugs. The software is currently optimal for my needs, but there are significantly cheaper trading platforms. If I am not satisfied, I change the platform. It really does not matter which platform you use, the crucial thing is that the stock market data is translated so, that you can do something with it.

best regards

Cool. I was interested in the specific indicator you were talking about above post, #1064.

Hello lemercenaire,

the indicator calls Multi Market Powers

best regards

First of all, thank you Michael for this very informative thread. Those who understand the value of the information you are sharing here would have to appreciate your work (which I do )

I just wanted to mention that my successful machine learning based scalper Expert Advisor is fundamentally based on Order Flow. The velocity and acceleration of the market are just two of a pool of features that the model employs. But without Order Flow, in my experience, the long time trade results in a large drawdown (although with overall good profit). I get Order Flow by combining different available sources on the net - both free and paid (Free sources such as MyFxBook community outlook, I do not mention paid services in this forum). Hope this further emphasizes the importance of Order Flow (the equilibrium) for those who are looking for a profitable long term trading strategy.

[quote=MathTrader7;12527548]First of all, thank you Michael for this very informative thread.

Hello Matt,

Thank you for the great compliment for our blog. I've been following your work for years and am impressed with your knowledge and experience. That's the advantage of FF. It's hard to filter out the really good information, but once you've found it, it'll make things easier. I am convinced that many traders benefit from your great ideas.

best regards

EURUSD where is the journey going?


Hello dear subscribers,

For over ten years I have been acting on the principle of demand and supply. That means before I start trading daily, I get an overview of the current market situation. Of course I am not able to determine the future course of the price, but I am able to identify certain resistance zones where the price may be turn.



No matter which system you work with, you usually need a reference course for it. For example, a strong POC from the past. When a price goes up, I took the downtrend as the reference price before. When the price goes down, I need the reference price of the uptrend from the past. Our current reference price from the past is in 2016 2017.



At the moment we are in a very interesting resistance zone, which we want to take a closer look at. On April 24, 2017, the EURUSD had a large gap of 178.5 pip. This gap was exceptional because of its size. I do not care if the price goes down to close this big gap or not. Crucial for me is a completely different matter.



After the price had gone down from 1.40 to 1.03, a large sideways market arose over two years. At point A, there was a very large demand market pushing up the price. Point B once again resulted in a very strong supply market, which pushed down the price sharply. At point C they tried to push the price up again, but the weekend came in between. In the next week, the first price requests were almost 180 pip higher and it was a big gap. In principle, this gap is a great resistance for me because it was a very strong demand market at the time of its creation. It is not important for me now whether the gap is actually closed or not. For me, only the reference price is crucial to which I can orientate myself.



To compare this reference price with the current price, you would have to juxtapose the two yellow-bordered windows.



That would look something like this, where December 2004 was compared to January 2018. There is an interesting indicator developed by the outstanding programmer Nicholishen. With the help of this indicator, we can place the two windows side by side in a diagram in real time. The POC lines that we draw in window 1 in 2017 will automatically be taken over in the second window. No matter what time unit, no matter how many diagrams, all drawings are transferred exactly to the second window. I have already published a detailed report on this procedure in February 2018. I will gladly provide the link for you.


Simply draw POC from the past


One of the reasons why I like to work with the EURUSD is the detailed history. The more course information is available, the more accurate I am able to create a concrete POC. However, you should update its history database in MT4. You can find a video in my link.



If I go back three years and want to see the reference price and the current price in two different charts, the time keeping is a decisive factor. Three years equals about 780 trading days. In the M 30 are 37,440 candles, that the MT 4 would have to provide me with, so I can look at the price history three years ago. Since I have 50.494 candles from the M30 in my course history, this is no problem in this case. A smaller time unit is not possible because the required history is not available.

For the analysis of a possible price course this indicator is an indispensable tool. Thank you very much to Nicholishen for this great idea.

I wish you a very successful trading day and a nice weekend

best regards

Dump Money against Smart Money


Hello dear traders,

Never buy the euphoria for the start of trading is a stock exchange rule that often comes true in the EURUSD. The institutional money "smart money" waits for a while, while in early trading, the private investors (like also unflattering "dump money" called) exposed motivated. The fear of missing something is very strong.



Point A
A footprint chart is basically a zoom-in to the candle. On the left side, we see the number of lot that have been traded on the bid. On the right side, we see the number of lot traded on the ask. Trading on the ask means that the traders buy the euro and trading the bid means the traders buy the dollar. The color-highlighted numbers represent an imbalance within the candle. We do not want to deal with this imbalance today.

Point B
Here is a graphical representation of the volume delta. It shows the result between Ask and Bid. In the first candle, 649 lot were traded on the ask and 721 on the bid. 72 Lot more Bid as Ask were traded, so the delta is negative.

Point C
In the cluster statistics you can see the summary again. The session delta is the summary of bid and ask for the entire trading day. We see that the total 4905 Lot Delta is in the positive range.

Point D
The blue line is basically a graphical representation of the session delta. In the stock market there is now the interesting possibility to group this session delta into different lot.



In the Euro FX, we look at the price development on Friday. For the big players we have chosen a range from at least 17 lot to 200 lot , which is shown with a red line. For the Dump Money we have chosen a range of a maximum of 1 lot, which is shown with a green line. The minimum bet in the futures market is 1 lot. We assume that someone who invests only 1 lot loses with a higher probability than someone who invests between 17 to 200 lot . Point A shows the overall price development in the 32 Tickchart, the price trend is bullish. Point B shows the delta of the big player and point C the delta of dump money. While the delta of the big players is also bullish, the delta of the dump money is bearish. Since both deltas calculate values of different sizes, they are calculated in two different fields to make the percentage change clearer. The Dump Money shown here is in more than 90% of the cases wrong during the day. From this one could derive an assumption. When the smart money moves in the opposite direction to the dump money, I follow the smart money. During the course of the day, smart money shows the possible price trend. However, one should be careful in the absorption phases, there the smart money will run in the opposite direction.



Here is a video as an excerpt from the afternoon



Let's look at a section of the 128 tickchart within the day. At the blue arrow the number of volume deltas of the big players increases strongly, also the price course is bullish. The question: Was there bought Euros or sold dollars to push the price up? Why is this information important?



Point A
If the market price in the EURUSD rises, it means that the euro is stronger and / or the dollar weakens. If the market price falls, the dollar is stronger and / or the euro weaker. You will also receive excellent information in MT 4 about the currency strength. I have already reported on the currency strength indicator several times.

Point B
When someone presses the buy button in the EURUSD, he buys the euro and at the same time sells the dollar. Once he has reached his take profit and gets out, it means he is selling the euro and buying the dollar at the same time. If the price moves down after the entry and triggers the stop, the euro is being sold and the dollar is being bought. When someone presses the sell button, the opposite happens.

How does that help us?

When we are in an accumulation phase, the big players in this sideways market are increasingly buying in a large number of Ask. Before pushing up the price, you usually want to get rid of smaller traders who also bought Ask. That's also logical, because if they take the smaller dealers up, they will eventually get off. When the smaller traders get out, they have to sell the euro and buy the dollar at the same time. Depending on how many get off on the way up, this could slow down the course significantly. To avoid this scenario, before the actual eruption, there is an outbreak down, with the aim of stop fishing. So, once you've identified an accumulation phase, in the forex market, with an 8-tick chart, you'll be able to see when trader stops are triggered. At that moment you normally only see the course go down fast and hard. Many then assume that it is a breakout down, get in and get stopped.

Point C
If the price goes up, you should always ask yourself whether the euro is being bought or the dollar is being sold. If the price goes down you should always ask yourself if the euro is sold or the dollar is bought. This question can be answered a bit easier with the stock market data, but usually this will be a big challenge. In certain market situations, this approach may help further.



Let's take another look at the previous example. At first the price went up and there was a sideways market with a slight upward tendency. The bullish volume has fallen, so many traders have assumed that the market is now down. The big players pushed up the market again with a high number of Ask, triggering the traders' stops. As a result, the market has been pushed up again. At the top high, the big player has sold his euro while buying additional dollars. That pushed the price down sharply. After that, the course went down. Of course, this situation must not have happened the same way, but it helps if you know how a big player in the market. The more accurate you become in this area, the more likely you are to be able to see certain course progression ahead. Of course, we are fooling ourselves regularly, but if you try to implement those ideas, you will most likely be able to optimize your profits. It is very important in the sideways or equilibrium to pay close attention to whether the big players buy more Ask or Bid. This absorption in the Ask or Bid are rarely handled with large contacts, but algorithms help the big player to perform the absorption in small numbers. Nevertheless, one is immediately able to determine in the chart that the positive delta of the big players rises sharply. At the same time, there is often a negative delta in volume within the sideways market. In this case, it is an accumulation and you just have to wait for the right entry up.



In addition to the ability to group the volume delta into different lot, I'd like to see the change in the total delta. On the right side you can see the time, Bid and Ask and next to it the session delta. With this information you can capture the market situation faster.

Who wants to swim with the big sharks, must know how they move and why. That's why I started to deal with these big players a few years ago. I've found it's very hard to catch the breakouts and get pulled up or down. Therefore, the crucial phases are the sideways markets where I can trade back and forth within Vol H and Vol L. Nevertheless, it is possible to take the breakout phases with you and then let the course run for a few hours. If they are able to think like a big player, they are also able to guess where most of the trader's stops are and can accurately see when those stops are triggered.

If you move your take profit too fast in strong up or down phases, you will be stopped relatively quickly. When the price move up I often put my stop under the second low, when the price move down I put my stop over the second high. Should I be stopped then I'm not annoyed, because I earn my money in the sideways phases and not in the breakout phases. If I could get through a breakout and follow the big player up or down, I'm glad because it's a nice extra income. If I'm stopped at the second low or high, I have not lost any money. I do not work with a traling stop, because he is not able to recognize the strategy of the big players. Moreover, every situation is unique and not predictable from the outset. So I decided not to work with an autopilot. My favorite folders are the Market folders, where I've gotten used to buying in a falling price and selling in a rising price. If I have calculated the resistance zone correctly, I am thus faster in the profit.

Awareness of the market is crucial. Similar to a piano book with notes, the price history in EURUSD also tells us a story. We have to translate this story and we need to be able to see what is happening right now by the price history. When I am in the market during the day, I also try to interpret the courses and find out who is battling against whom. Over time, you will be able to more accurately identify trends and course trends. Of course, there are also days for me that does not work at all and I am completely wrong. Then you just take a break, get back in later or wait for the next day. The worst thing is boredom trades or revenge trades, because you think you have to make a profit. There are days when nothing works properly, then you should not act.

It also does not matter if you lose 1% in a day, much more crucial is how the result looks at the end of the month. If you deal with some of these things in the future, the monthly result could be much better. I wish you that from my heart.

A great weekend and a great start to the new week

best regards

Just one word Master ... BRILLIANT! kk
your method is still so advanced to me, definitely it is one of the most important missing in my knowledge ... but I think i can catch the basic idea after reading some of your posts & will try to study more if have spare time!
//
btw, your footprint chart,... & volume delta seem not available for Mt4, isnt it?
have a good day master!

[quote=aPhong;12531896]{quote} Just one word Master ... BRILLIANT! kk your method is still so advanced to me, definitely it is one of the most important missing in my knowledge ...

Hello aPhong,

First of all thank you for your kind words for this blog, I pass this compliment on to all subscribers who support this blog. Without them the blog would not be what it is today. For a master I'm unfortunately still too young, my findings are based solely on experience that I have made over the years. And experience is usually painful and less masterful. Masterfully, on the other hand, are the results, the big players, who every year put on a performance that we all dream of. I am very happy if this blog helps you, because that's why it was launched. For your question about the Footprintchart please read the following article:

Footprintchart in the forex market?

A rough overview of the different topics can be found here.

The best chance to win

I wish you a lot of fun and even greater success.

best regards

Strong up, or down a bit?


Hello dear subscribers,

As I suspected a few days ago, the course is exactly at the gap, that arose in April 2017 failed and again run up. Courses often have a habit of closing gaps. This gap was special because it was almost 180 pip. On the other hand, gaps at their starting point are also considered a kind of resistance, since from this price level a strong move to the top took place. I would like to describe some scenarios without giving an outlook on a future share price because I am unable to do so.



Above and below the gap are two resistance zones that I have drawn. In between there are two more resistance zones where the course could fail first. As I said earlier, it's pure speculation and most likely it will be different.



At the same time, in a market profile, I looked at the price development in the weekly chart within the Euro FX. Just below the Value Low is within the Market Profile a zone where there is less interest. (Point A) Interestingly, this zone is exactly where the price would be able to close the gap (Point B). This would be a price target of 1.08145 in the Euro FX and a price target of 1.07545 in the EURUSD, if we did subtract the current swap. However, this would mean that the gap is not closed in EURUSD. I could imagine that the swap may change to close the gap in both cases. Interestingly, the gap has been one of the strongest moves in the entire uptrend to 1,255. This could potentially cause a major turnaround that will bring the course north again next year. On the left side we can see how much the downtrend of 1.40 has gone down. Initially, this has caused a steep downward trend from 1.255, which has calmed down a bit.

A second scenario is the possibility that the price on the now existing resistance zone (point C), goes up. This resistance zone lies at the bottom of a very strong weekly candle, which has also run strong upwards. With a downtrend running on average 40% faster than an uptrend, I would be more pleased if the price continues to move downwards than if we see another moderate upward trend for another year or two. As of January 2017, the EURUSD began its upward trend, the course has gone up on some days over 100 pip and I thought, he can not continue, he has to turn sometime. But the course continued unabated. Fortunately, with the volume information from the futures market, we are a bit further ahead and can actually see if there is any further buying interest. Maybe we are now at a crossroads, it goes still a bit down or strong up. At best, we will see a nice sideways market until next year. In such situations, I am glad that I am not a swing trader and can take the small moves with me. What we can say with certainty, it will certainly be very exciting until Christmas.

I wish you a successful trading day

best regards

Avoid stop fishing


Hello dear traders,

When I started to trade, I thought the big players were after me, as they fished my stops over and over in the outbreaks. It is indeed annoying when you have made a correct forecast but still makes losses. This is because most retailers have positioned their stops at a similar price level and the big players know that very well. Why are the big players in the wrong outbreaks interested in fishing the stops from traders? Now, first and foremost, the big player can get liquidity and improve its position. At the same time he throws all trader out of the game he would otherwise have pulled up. Although this is not a problem for the big player in the beginning, it becomes a problem when the first ones get out of the market and thus slow down the course. This solves the big player two problems in one fell swoop, the market unfortunately works like this.

These outbreaks with stopFishing are most likely to occur in the accumulation and distribution phases. With a little flair, you may be able to avoid the mistakes in the future. I would like to give you a few examples and a few tips on how to avoid this in the future.



Here we see a 512 tick chart in the EURUSD from August 23rd. On the left side we see course down again and flows into a sideways market. At point A, the price seems to rise again, but that happened a short time and then there was a downtrend again. In the equilibrium point B is the course goes slowly up, that has a very specific reason we will look closer. At point C is a false breakout after that, the course runs 100 pip above. Of course, this works in the opposite direction in a distribution. If we look closely, we realize that we have to deal with many false outbursts several times a day because they are not just in the accumulation and distribution phases.



One way you should pay attention is the market profile. At the points A, B and C we recognize a kind p in the form of the profile. This is often an indication that the course may possibly goes down again. Oppositely there is the b that often signals an upward trend. Of course you can not always rely on the market profile. In that case it would of course have worked. Please note, however, that this market profile unfortunately does not work in the MT 4 because, as already mentioned, there is no concrete volume. I will publish a separate article on this.



At point A and B, the big player would have had the opportunity to buy Ask and then push the price higher. In the outbreak is striking that he does not run under the last low, but that does not always necessarily happen. The background is this: if the big player pushes the price down, he does not have to invest too much in that, because he knows that there are the stops of the traders there. As soon as the first stops are triggered, a kind of chain reaction develops and in our case the course accelerates downwards. Possibly the big player would have had to kick again, but he has renounced in this case. When the course triggered the stoppages, the big player closed its position immediately and threw an additional buy order into the market. As a result, the price has gone up very high. At this high point, many traders have dropped out and the big player has bought many of these orders and pushed the price further up.



Let's take a brief look at the Equilibrium phase just before the outbreak. At point A and B we see a strong negative delta. This means that in this candle more Bid than Ask has been traded. Nevertheless, the price has risen rather than fallen, which shows that someone has bought at this point so the price could not continue to run down.



As we zoom in on this equilibrium it becomes clear that there was a very good way to buy Ask.



For a better overview, I have aggregated the footprint chart. You can now see more effectively what has been done on each level. Overall, the big player would have had the opportunity to buy in the nine candles 7800 Lot Ask. Of course that would not have been possible because there are other market participants. But I'm convinced that he has shopped here again.



With the horizontal volume representation, you can see very well in which area was heavily purchased.



More interesting for me is the horizontal volume delta, because it can represent the zone a little more accurately. In the volume delta you see a clear surplus in the area of the ask, for many traders this is an indication that thr price has to go up. However, one does have to do exactly the opposite in order not to lose. So, first of all, act down. The moment the other traders' stops are triggered, this is a fast and clean business. However, one must not be so greedy otherwise the nice profit is faster away than you can blink. Green deltas at the outbreak signify the activation of stop-sellers and entry into a trap of reckless buyers. Red deltas in the support push mean the activation of stop-loss effects of the buyers and the entry into a trap of reckless sellers. Of course, that always depends on the time unit.




Although the forex market is one of the heaviest markets in the world, there is a very interesting strategy in this tough game. You have to earn your money where others lose a lot. And that's exactly the moment where the trader stops are caught. The advantage of this false breakout is that it is very fast and usually gives you a good chance of winning. Wherever they lose the most money you have the chance to win the most. So it is very interesting to act the wrong outbreaks. However, one should also know that it is a false breakout and realize its profit as quickly as possible. If you are still fast enough you have the opportunity to act in the opposite direction.



In order to become professional in this area you should always know where you are right now. Therefore, it is essential to determine if you are currently in an accumulation or in a distribution phase. With a little practice, this can be achieved over time and as soon as the first gains are achieved it is even fun.

I can only give the recommendation to get into the position of the big players. In my recent contribution from Dump Money and Smart Money, I showed you the positions of each trader. I admit that sometimes I do not know exactly what the big players are planning to do, but then I focus on the retail traders and just do the opposite. Of course, this does not always work because sometimes the retail traders are right. But that is usually only for a short duration.

In 1912, G.C.Selden wrote the book: The Psychology of the Stock Market, citing an interesting wisdom:

The biggest mistake of 99% of investors is that they are optimistic at high prices and pessimistic at low.

Likewise, the following quote comes from him:

I believe that the desire to find a simple mechanical formula accounts for most of the losses on the stock market.

Perhaps to stop the attitude of finding the holy grail and concentrating on the essential facts in the market could lead to a more profitable future. The correct stock market data could be a solution.

I wish you a successful week

best regards

Thank you so much for great knowledge Master! .. recently, the first thing for me to do in the morning is checking whether you have a new cool post haha!
... in my head... Its been always a big question that How the hell MMs can effectively use their Algos to secretly load their Orders & trick Small Money while still creating very nice PA at the same time ... that sucks!

In 1912, G.C.Selden wrote the book: The Psychology of the Stock Market, citing an interesting wisdom:


Attached

Volume in forex


Hello dear subscribers,

As promised in my last post, I would like to go into more detail on the volume in the forex market. First of all, it is important to know how the volume is calculated in the forex market and future market.



We start at point A in the futures market and take an M1 candle as an example. There are market participants who buy dollars (Bid) and market participants who buy the Euro (Ask). In a footprint chart, the number of bid and ask on a price level is juxtaposed. The numbers in this candle are the number of Lot traded within Bid and Ask at each price level. This is a bit different at Forex Market Point B. The volume is calculated here from the ticks. A tick corresponds to a price change within the forex market. However, the number of ticks has nothing to do with the amount of Lot within Bid and Ask.



Let's take a look at an example from the exchange-regulated market, where there are concrete and comprehensible information that is the same for everyone. Here is a short snapshot of 6 minutes in a 1 tickchart from last night. A tick means a trading transaction that has led to a price change. We can see that up to 25 lots have been traded within a trade to bring about a price change. Up to 20:00 CET last night, 204,000 Lot were traded, an average of three Lot per second. on the right side you can see a footprint, on the left side the number of traded lot and next the number of trades. In the middle candle 63 Lot with 42 trades were carried out within 1 minute. This means that tick volume indicates the number of trading transactions. We know, that the volume in the Forex market indicates the number of trades, while the volume in the stock market reflects the number of traded lot. We compare apples to pears. The only reason a price moves is the number of traded lot on the Bid and Ask and not the number of trades.



Let's take a closer look at this in the exchange-regulated market. Within 23 trading days, the daily ask, bit and total volume have been analyzed.



On the left side you can see the calculation of the volume and below that the calculation of the ticks. On October 12, 304,008 lots were traded in 165,768 ticks or price changes. At first glance, the two tables look similar, but on closer inspection and there are significant differences. On the right side, I have listed the individual days exactly. At Point A you can see the traded Ask and Bid. The number of ask and bid is almost identical, which is also logical, because a trade always involves a buyer and a seller. At Point B, we see that the average daily trading volume was 158,155 lot. PointC: On average, there have been 90,954 trade changes or ticks per day. Point D: On average, 1.73 Lot were involved in a price change. You can see that the volume / tick value changes, there are deviations up to 30%, in the overview on the left side you can not see that.



Here on the left side we can see again the average ticks of 90.954 in the 23 trading days in the stock exchange market. The volume in the forex market refers to the ticks and there were on average 80,123 ticks during the 23 trading days. Since the Forex EURUSD is much more volatile than the Future Euro FX, I doubt the correctness of the volume in the Forex market.



As I have proven with videos several times, the movements in EURUSD and Euro FX are almost identical. The price difference results exclusively from the swaps. In the stock market, you do not expect pip but ticks. When the futures market moves one tick, the forex market changes by 5 pipettes. Often you can see that the price in the futures market remains at a certain price level, while in the forex market the price moves back and forth. So if the volatility in the forex market is significantly higher than in the futures market, the tick volume in the forex must be higher.



As we know, the EURUSD Forex market is about 100 times larger than Future Euro FX. If the calculation of the ticks in the forex market were correct, this would mean that in the forex market within a tick a volume of 212 Lot and in the futures market just under two Lot are traded.

What speaks against, that the number of the volume in the Forex market is right?

This is clearly counteracted by the higher volatility that takes place in the forex market. If we have 10 price levels in the futures market, than we have in the forex market 50 price levels. This also speaks for a higher volatility in the forex market.

What speaks for that the number of the volume in the Forex market is right?

Since the forex market is 100 times larger than the futures market, it would be logical that the number of plumb bobs per tick should be 100 times greater. Another argument that speaks for it is, that very few retail traders actually trade in the Forex market, basically only through the platform of each broker. Most brokers do business internally. That means, only from the time when there are more buyers than sellers, the brokers secure themselves over the Forex market. This hedge is usually a higher number of Lot. That would explain that in the forex market, in fact, only a higher number of lot would be traded. Effectively, I am convinced that the volume in the forex market is not correct, because if you trade exactly in volume, you would lose in 90% of the time. Moreover, in the interbank market, the actual volume is obscured, since the banks themselves have to protect themselves. We know that many banks earn up to 60% of their annual profits through the forex market.



If we know that the price movements in the Forex and Future are moving in parallel, then the volume would have to behave in parallel in parallel. As we can see in this comparison, this is not the case. The volume calculated here in Forex is the volume we receive from our broker and this volume is clearly wrong.



I now had the crazy idea not to use the volume of the broker, but to calculate from the price of the Forex market. You can see this calculated volume from the price in the middle. Although it does not yet approach the volume of the futures market, it is much more accurate than the calculated volume of the broker. I am convinced that this calculation can perform much better calculation in the forex market than the volume of the broker. That is why I will once again provide this indicator today.

Conclusion:

The interbank market is the largest market in the world and the largest banks see this platform as an excellent way to maximize their profits. This market is not regulated by the stock exchange, so there is no reason for the banks, that we can look into their cards. That's why the volume we're seeing is definitely wrong. Even if we could see the concrete volume of the banks, that would not help us. The volume is nothing but the result of Bid and Ask. But to make trading decisions, you must seen the number of Bid and Ask on each price level side by side. This information is not available in the forex market. That is why I use the stock market data to obtain detailed information which I can then implement in the forex market. I hope I have been able to show you exactly why volume trading in the Forex market brings more losses than profits. The indicator I provide will work better than the volume of the broker, but stock market data remains the best choice.

However, there is a small bright spot in the forex market, the calculation of the price is correct depending on which broker you use. The price arises from the ticks. This means that if you want to break down the price in order to better recognize resistance zones, you should only work in the tickchart in the future. Over that I will publish another article in the next few days.

I wish you a successful day

Best regards

Hello aPhong,

Thanks again for your kind compliment, I am very happy that the information help you. The approach of big players is unfair and only a disadvantage for those who do not know what is happening in the market. For those who know it is a big advantage over some 100,000 other traders. And that fact is more positive than the fact that the big players are unfair. If you are able to follow the big player, you are also unfair to the other traders. Those who want to earn money in this tough market must be unfair. Unfortunately that's how it is. Since I often manage to follow the big player, I am also unfair, but I inform our subscribers about my approach and possibly relieves me a little.

best regards