The Equilibrium, a key to success!

The right training


Hello dear subscribers,


For many years I have tried to understand the behavior of the big players in order to follow them. A year ago I started experimenting with tick charts. This eventually led me to the stock market data that I use today for trading in Forex. Germany is a modern country, but England is significantly further ahead in the Forex area and America in the Future area. It is therefore not surprising that the most experienced traders come from these countries. Unfortunately, you only notice these traders when they establish themselves as trainers. Why does a trader become a trainer or a coach? Perhaps it is the challenge of the new task and the recognition as to act as only for yourself. Another aspect is the security of a regular income. It's a way to change from daily speculation to a regular income. And people often prefer security. My attitude towards coaching in the area of trading is still critical because a beginner who pays for it does not get ahead in the area of his personal setup. Of course he gets from a coach important information, but he could also get it for free on the Internet.

I would like to elaborate on that first. In Germany there are some prop companies that advertise extreme on YouTube and earn their money primarily from new retail traders who have to pay high fees for their application. The best prop companies in the world are rather unknown. The prop houses in this category are characterized by the fact that they do not care to be known, have no marketing budgets and are completely unknown in the retail trading scene. The retail trading scene is not the real target group of these houses, but rather the professional traders from the banks.

Many traders who worked for smaller prop companies had to complete 200-300 trades per day for months without a strategy. The goal was to learn from the initial losses in the demo account in order to create your own setup. If these traders had been given a clear strategy in the beginning, the success curve could have been significantly lower. This shows that success on the stock exchange has more to do with screen time spent than with a given strategy. If a trainer gives you a possible strategy, it is questionable whether this strategy will make you successful. With the setup of Michael Schumacher's Formula 1 car, no other would have been world champion 7 times. And Schumacher created this setup for himself by training around the clock and optimizing his setup.

This means that if a trainer explains his success to you, you have to create your own setup from this information. This is the decisive factor that takes up the most time and the respective trainer cannot help you with that. So it is absolutely sufficient to get important information from the Internet or from books to create your own individual setup. Of course, you have to filter the numerous information for this, but if you learn from a trainer, you also don't know whether this is exactly the right information that will help you.

I find some statements from a former trader very interesting, Anton Kreil born in Liverpool and former dealer of Goldman Sachs, J.P. Morgan and Lehman Brothers (from 2000-2007). He has also developed into a paid trainer, but he has gained some experience as a trader with the big players. It is absolutely sufficient to watch some of his published videos to get ideas for your own setup. I can recommend a video to you, he uses it to indirectly advertise his seminars, but some of the statements made in this video are very interesting. Especially the statements of participants who give important information between the lines.





It is primarily about the crucial data with which a trader makes his trading decisions. Then this data is used to identify the strategies of the big players in order to achieve a trading advantage. This information is absolutely sufficient to create a possible setup. The actual setup is the biggest challenge and you have to be willing to invest a lot of screen time.

As already mentioned, the most successful prop companies are rather unknown, which unfortunately also applies to the best traders in the world. These work for the largest banks in the world and have a confidentiality clause in their contracts. This means that you must not speak publicly about the strategies of the big players, with very few of you actually being involved in all of the strategies. You could never earn the money you earn as a trainer or coach, so you stay with these banks and at most switch to another bank. The strategies of the big players change every day because the market also changes every day. A trader who has left the big player group for more than 3 years no longer has any current information about which strategies are actually being used. However, he has a big advantage, he has worked at least once with the big players and has a little more experience with it than someone who has never had anything to do with it. The information from these people is valuable, but you should not believe all statements and trust in your own intuition.

So my advice: get some information from these successful people on YouTube or books but save your money for expensive seminars. I do not want to say that seminars do not work, but the most important seminar is your individually created trading setup and no one can help you with that. You only need a lot of screen time for this. You can use the time when there is not much going on in the market to train yourself. And that is exactly what takes you further in order to optimize your own setup. It is the time invested, a good sense and your experience that will advance your success. That's all. A trainer or coach will always disagree on this point, the reason for this is obvious.


I wish you a great weekend

best regards
Michael

Hey, thanks Bionics for all your generous efforts. I'm sure I will find some ideas, next week I'm home, so I will at least have some time to read through some pages. For the rest I always try so solve things my self. Mostly I'm too stubborn to ask for help, ha ha. But if I weren't stubborn, I would have given up trading already a long time ago. A trading friend of mine gave me access to some good trading books, I started reading, but because of lack of time, I tend to think it's better to trade live or making my system better. So, I still have to read those books further. I think life is too short, my son plays foot, so I go and see the matches, also training, I go to the dogschool, spend a lot of time to my plants, my wife needs attention, our 4 kids need sometimes help for school work, I like to watch TV too, and next to that all I certainly must read some Forex books, yeah, sometimes I sleep too.

Have a very nice weekend and merry Christmas !
Wulong

Christmas 2019


Hello dear subscribers, hello dear traders from all over the world,


Another year is coming to an end and Christmas is a good opportunity to reappraise the past year. What went well, what was not so good and what were the reasons for it? These questions should not only apply to our work, but primarily to the family, health, friends, leisure, finance and much more. It is also a good opportunity to sit down with your life partner to work through the past year.





Write down what you both liked or didn't like last year. Criticism is always a help to get better and at the same time a great opportunity for change and a better cooperation. So you can use the time around Christmas for a shared annual balance sheet and the time after Christmas to prepare the resulting changes for the new year. The writing down and regular visualization manifests the goals in the subconscious. In the annual balance sheet at the end of 2020, you can immediately see whether the good intentions of 2019 have worked. It is not crucial that you reach 100% of your resolutions, but that you achieve the important goals together.

I would like to thank all subscribers for the suggestions, questions and attention this year. What I liked most was that we treated each other fairly and respectfully in order to improve together and we can all be proud of that.

I heartily wish you a nice Christmas, contemplative days, of course health and a lot of joy with the people you love above all else.

Merry Christmas 2019
Michael

I wish Merry Christmas to everyone who celebrates it and with wish comes health first then everything else that make you happy.

YYZ

Hi Bionics,
I have been drawing some RS lines on a M30 chart, starting from 02 december, just as an experiment. I have drawn the lines based on areas in M30 where I saw some equilibrium zones. Tomorrow I will see how price reacts to those horizontal lines. Normally I draw lines from past years on my H4 chart, but those start from the longest wicks in the past. That procedure seems to work too, I started from 2017, already in 2018 I did not have to draw that many lines, even fewer in 2019, they mostly were already there from earlier ...

I also connected my computer to my tv, so now I have an extra (enormous) screen. Will use my tv to keep an eye on this very simple, at least for me, chart.

Best regards from Wulong

Hmm, it seems to work, or I was lucky, haha, price did respect those lines.

Billions


Hello dear subscribers,

today just a series recommendation on the topic of trading

Billions is a 2016 US television series starring Damian Lewis and Paul Giamatti. The series Billions is playing about the New York financial world on Wall Street and the investigation by the United States Attorney Chuck Rhoades (Giamatti) against the successful but also unscrupulous hedge fund manager Bobby Axelrod (Lewis). The astute prosecutor is doing everything possible to convict the ambitious hedge fund manager Bobby "Axe" Axelrod of criminal activity. But Axelrod knows how to fight back - because billions are at stake.

The series is an interesting pastime for traders, whereby the topics around trading are treated only sparingly. Nevertheless, you can guess what chances you have as a retail trader in this game. As a viewer, you are often on the side of unscrupulous hedge fund manager Bobby Axelrod, who despite his billions has remained human in many phases.

The series runs on Sky and Amazone Prime.

Kind regards and have fun
Michael

Pattern identification


Hello dear subscribers,


At the beginning of my trading career, I dealt with many things, including different patterns that were caused by the course. At some point I came to the conclusion that there are no clear patterns that significantly increase our probability of winning. Possible patterns that we believe to recognize on a regular basis are initiated by the big players in order to get their strategies through. However, there are patterns that we as traders would never recognize as a pattern. Unfortunately, this has nothing to do with the course, otherwise there would be many billionaires.

In principle, a currency pair in the stock market can be compared to a living being. It is irrelevant whether it is an animal or a plant. First you have to create an emergence-based abstraction that approximates the real behavior of this living being. In addition, factors such as integration patterns of wind and weather, natural enemies and other things must be taken into account. This creates an abstract simulation. This simulation is also used in modern video games.

The stock exchange market is initially also about creating an abstract simulation for the respective currency pair by combining different information that represents the effect of the dependency. For me this is the number of bid and ask that come into the market within a certain level of liquidity. This simulation can only be implemented with level 2 data.





First I started to assign different filter settings to the bid and ask.


Point A
Bid and ask are shown separately here and the number of 1 + 2 and 3 + 4 are summarized. This representation is useful for identifying rapid intervention by a large player. This intervention by the big players takes place within an equilibrium in order to keep the course in a range, for short erroneous eruptions and course corrections or for the start of a stopfishing. As a rule, very small orders are placed in order to disguise the actual procedure. Likewise, a large ask order of 100 lots that occurs on the high and is immediately sold again with a smaller bid lot can be identified with this representation. More information is available here: Mad world


Point B
The filter setting differentiates between larger orders that have been placed by the big players. On the one hand, there are the larger orders, which are visible to all market participants in the Oderbuch and which have not proven to be course-sensitive at the given period. Then there are the smaller orders which, with the help of algorithms, also result in larger order packages on the market within milliseconds. These orders are course-sensitive in the medium term, for example to prepare a stopfishing.

Point C
The bid and ask filtered here depend on the respective liquidity of the buy / sell limit orders in the market within level 2. Special patterns can already be recognized here within certain price trends, but these still need to be examined in more detail. The solution seems to be filtering the Bid and Ask depending on the respective liquidity. This could be a key that identifies certain algorithms. The challenge lies in the fact that a given ask can stand for a euro purchase or dollar sale and a bid placed for a dollar purchase or euro sale. By filtering with the liquidity prevailing on the market, we come one step closer to this breakdown. The way big players operate produces similar patterns, which the high-frequency traders also use. However, these are limited to milliseconds within an equilibrium. My approach relates to the available liquidity regardless of the time.


If a large player has acquired a large number of ask in an accumulation phase, after a possible stopfishing, he first pushes the course up. More buyers enter the market and push the price further up. As soon as the big player notices that interest in the euro is waning, he begins to step out of the euro. To do this, he must now bring a large number of bids into the market. This presupposes that there is still strong liquidity in the euro at this point. So there must still be enough buyers who drive the price up despite their bid duties. At the same time, the big player has to make sure that he does not take too much of this euro liquidity, because that would initiate a downward slide and significantly reduce his profits. The big players are even able to predict liquidity and adjust their strategies accordingly. And this situation can be calculated based on the prevailing liquidity on the market. The patterns are always similar in certain situations. In principle, it is about decoding the liquidity patterns in the market that require the big players to react in a certain way.

If we apply this information to the respective currency pair, we are able to predict their possible delta by following the simulation, because nature also follows the abstract one. However, many simulations still need to be created to develop a reliable pattern. First of all, the stock exchange data must be saved on a server and then examined with different filter settings. Accumulation with subsequent stopfishing can be easily recognized afterwards. The crucial thing is to examine what exactly happens in the area of bid, ask and the respective liquidity within this time. From this, concrete patterns can be identified that can be used for future simulations.

It is a kind of secret language in the form of different letters and numbers that do not make sense at first. In the next few months, it will not be a matter of completely deciphering this secret language. To gain a market advantage, it is enough to decipher a few characters. The interesting thing is that there are no specific patterns in the course of the price, but only patterns within the liquidity that cannot be recognized under normal circumstances. This is a very interesting challenge for the next few months. Of course I will publish the results regularly.


I wish you a great weekend
best regards

Hi Bionics,



Excellent observations as usual from you.

Can you please put together all your experience in sort of indicator like this.

Can Dom information be captured by way of an Mt4 or MT5 indicator like this?

A volume indicator which clears noise from the market and shows only major deals. Transactions that happen which are shown on the chart in the form of big volume spike something like the indicator will only show the big buy or sell volume and filter the noise created buy normal traders by not showing their buy sell activity at all or in the form of very small spikes .

The chart given below give a rough estimate of volume or probably deduced from whatever information that can be obtained at MT4.

However, MT5 is being used by futures brokers like AMP and Optimus futures. That will be able to get the futures real volume and not deduced one.

https://optimusfutures.com/tradeblog...latform-review

:Real Volume shows how many currency units traded.
Transactions show how many orders executed.
Tick Volume shows how often prices updated

I am attaching another indicator which may be coded for MT5 to get actual volume information.
Kumo volatility indicator is as well attached. I don't have mq4. Obviously a variation of Moving Average.

You will find the answers if you go through all Bionics posts.

Found the MT5 indicator. Basica one. Has a choice of giving tick volume or real volume. Not both.



Similar kind of indicator is being sold. The link explains how best to use their volume indicator.

FF rules don't allow posting of commercial links but those interested may scan Google with following keywords

tick-indicator-better-volume

The Minion guys from Brazil have provided all free indicators on MQ5 site.
Aggression volume is the one that may interest you as well.

Data analysis using algorithms


Hello simnz,

First of all, thank you for your numerous ideas about the volume and the different perspectives. MT4 and MT5 are free platforms, which is why they are so common.

MQL4 / MQL5 is an object-oriented programming language that was specially developed for the Metatrader platform. Both languages support almost all standards of object-oriented programming, with the exception of multiple inheritance: data encapsulation and type extension, inheritance, polymorphism, overloading and virtual methods. The disadvantage of MQL is the inability to build independent applications. Graphics programming is very memory-intensive and slows down Metatrader enormously.

For this reason, neither the MT4 nor the MT5 is an alternative to display the futures data in such a way that market advantages can be generated from them. For Forex data, the Metatrader is absolutely fine.

In order to optimally read the futures data, I would use high-quality software with which the data can be individually configured and programmed. The providers of high-quality stock exchange software usually have fast servers that have already saved important programming functions. As soon as you start the software, it accesses these servers and the self-configured data is downloaded and then processed with the current stock exchange data. This saves time and resources.

Inserted Video

In the video you can see the bid and ask that have been filtered in different liquidity levels. Such programming is possible to a limited extent in the MT5, but would make demands on its own cost-intensive server in order not to reach storage limits. In addition, the programming effort is enormous.

Inserted Video

Similar challenges arise in the graphic representation. Complicated algorithms are already used here, which can be individually modified to assign smaller lots to a single big player. The identification of spoofing in the DOM is also calculated and evaluated by already integrated algorithms. This is impossible to program in the MT5.

A crucial step for me is collecting and combining information. This creates new forms of ideas that are crucial for me as a dealer. The last step is to create indicators that do not yet exist and to collect information from them that give me additional arguments for my decision.

Therefore I recommend using professional software for future data. On the internet you can find different providers for stocks, raw materials or currencies. The decisive factor here is the individual requirement that a trader places on software. Therefore, every trader should first get extensive information and test different software extensively.

Lovely wishes
Michael

Happy new year 2020!


Hello dear subscribers,

In a few hours the old year will be history and we will devote our full attention to the new year 2020. But we should remember which measures made us successful in 2019 and which obstacles slowed us down. It is not just a cliché: it is easier to look back on past successes in personal projects. These influence our self-image, which leads to less doubts. This makes future success easier to achieve. However, past success is no guarantee of future success, especially in our profession.





Many years ago I defined my basic strategy for trading: supply and demand within the equilibrium. This strategy is set, but what changes regularly is my setup, with which I implement this strategy. This means that my screen views change weekly, but my approach does not. It is basically about optimizing my market view in order to be able to make more efficient and faster decisions.

This optimization can be compared to an optician's eye test. For this purpose, a phoropter (optical device) is used, through which one looks through to determine the individual vision in the distance. At the end, the lenses are changed to determine the optimal glasses thickness. First there is a rough setting, which is then fine-tuned. It can happen that our view is blurred again due to an incorrect setting. The solution, you go back to the starting point where you last saw sharply.

This is exactly the strategy I use to optimize my setups. I usually use the weekend to set up my new setup for the coming week. After that I work with this setup and make minor changes within the week. Whenever the view is unclear, I go back to my last clear setup and start over. Sometimes my view of the markets was so unclear that I rejected the current setup. Then I always go back to the last setup that worked and start over. I slowly feel my way forward to regularly sharpen my view of the markets.

Complete views are not always deleted, but successful views are optimized and views that do not help me are replaced by new ones. This procedure creates creative ideas that can be combined with each other. Since the markets change every day, you can safeguard yourself with this approach and at the same time react faster to changes. This also gives you a more comprehensive view of the markets. The goal is to build on the strengths while reducing the weaknesses.
If the old year was successful, then look forward to the new one. And if it was bad, you can be doubly happy, because it can only get better.

On January 1st, 2020 we start to write a new book. The book has 366 pages and we determine what should be included. I sincerely hope that your book 2020 will be a bestseller.

Happy New Year 2020

best regards
Michael

Have a grand New Year yourself, Michael. Your thread here has been a breath of fresh air. Such depth of knowledge giving those who are interested a chance to take a look behind the curtain.

May the coming year bring you continued success.

2020 targets


Hello Lemercenaire,

5 months ago, at the beginning of August, you wrote me the following words:

I have to say that this is one of the most original and in depth threads on FF. The sheer amount of information available here for free is staggering. The fact that traders are then able to pick and choose the aspects that are of use to them directly is purely a bonus! I have no idea if you will be able to sustain this level of knowledge transfer without burning out but for now, well done and long may it last.

For this reason, I am happy if this blog is able to pass on important information. Thank you for your high quality compliment. However, I would like to pass on your compliments to all subscribers, because they all ensure our progress with their questions, views and ideas. One can achieve a lot alone, together you can achieve everything.

I will endeavor to achieve further interesting contributions in 2020, for which I already have a lot of creative ideas. The fact that this blog is a source of ideas for individual setups supports the common goal of all of us. Here no one is forced to stick to certain strategies in order to be profitable, but everyone can decide in which direction to orientate himself. This is a bit more time-consuming for each individual subscriber, but in the end he created his own setup and is independent. This is a crucial goal for a successful trader.

I wish you a successful 2020 and would be happy if this blog can a little contribute to that.

Best regards Michael

Happy new year Michael! <3 ;D

Happy New Year


Hello aPhong,

First of all, thank you for your New Year's wishes and I sincerely wish that in 2020 you will achieve all the goals you have set for yourself. Tomorrow this blog will be exactly 2 years old and I will publish an important summary of these 24 months tomorrow at noon. I believe that this information will help you and I wish you a nice weekend.

best regards

Identification of bid and ask



Hello YYZ,

Thank you for your question, I would like to deepen my statement a little. The screen views that I change primarily refer to the following representations.





This is the time & sales list, the DOM, various displays of spread tape, bid and ask filtering in combination of the different liquidity as well as the bid and ask representation on the chart. Basically, I only change views that don't give me a deeper insight into the market.

The strategies of the big players are in recurring patterns, which, however, cannot be depicted in a course. Price trends appear to be random, the use of bid and ask always runs similarly in certain phases. A stopfishing can be identified with a bid and ask filtering in combination of the different liquidity and graphically represented in the chart. The decisive factor is the correct setting of the different filters. It is also possible to see whether the euro is currently being bought or sold. If you analyze a chart, it becomes clear what is happening there. In an accumulation phase, a big player buys massive ask within an equilibrium. Then the stops of the buyers are started in a Stophunting and then the price is pushed up. A chart is therefore perfect for creating an analysis of a past price trend. This is only of little use to a trader, since he needs to know what is happening in the current course of the price. The invested bid and ask clearly show us what will happen in the future. And this is exactly why these individual bid and ask have to be translated exactly and assigned to different market participants. I will go into this in more detail in the next few months.

best regards
Michael

Hello dear subscriber,

I wish you a great weekend

best regards