The Equilibrium, a key to success!

Stock market data


Hello flockofpips,

I warmly welcome you to our block and I am pleased that you are interested in this information. I initially worked exclusively with Forex data (supply and demand) for many years by trading the short movements within an equilibrium. The tick charts was the reason, that I looked more closely at the stock market data and found that this data has a similar structure. In the past year, this resulted in some projects that were very time consuming. I compared different providers of stock market data, got closer to the high-frequency trading / big players and looked for suitable software that was able to translate the stock market data according to my specifications. Today I trade almost exclusively with the information of the stock exchange data in the forex market. However, this was a development over 2 years, which you can read about in this blog. Two years ago I started a kind of trader's diary in this forum, with the requirement to document my further development exactly. Trading in the forex market is one thing, but explaining exactly how and why one trade, is a bit more difficult. If you want to describe something, you are forced to have precise information. This creates a need for information, which forces you to research carefully. This creates further questions, that you want to answer for yourself. My creativity made me ask myself questions and take paths that I would never have thought possible. I try to find new ways to achieve my goals. It may sound crazy, but I was never as sure about trading as I am today. I am not concerned to being the best or the most successful, I am aware that there are many ways to succeed. When I read my trader's diary, I see an enormous development in recent years. The important thing is that my trade has become much more efficient and secure. However, I have also invested over 10,000 hours in the past 3 years. In this blog you will not find a specific system, but many creative ideas with which you can create an individual setup for yourself. Among other things, I describe exactly what the forex data have in common with the futures data. I am convinced that you can use some ideas, but I recommend that you work through this blog from the beginning. While this takes around 17 hours, only one crucial idea you find, can potentially change everything.

I keep my fingers crossed for you and wish you to find the information that will help you.

best regards
Michael

Thank you for your response, I will like to work my way around supply and resistance my self but I need advice and it's not very easy knowing the equilibrium

[quote=Bionics;12736206]Stop loss Hey bionic Michael,

Lately, I have been busy making a new MT5 scalping template, based on M5 and of course it's completely my style, fast indicators combined with medium fast and slow indicators, all made by Mladen and MrTools, so no repainting whatsoever. It's a pity my chart is not bionic, but that's no problem, I'm starting to 'see' equilibrium zones on a normal chart too. Only starting of course, ha ha. I have never traded with MT5 and the indicators are totally different, I should get used to them rapidly. I recently bought a second screen. Now I'm going to add a third screen in the form of an old Sony laptop, that one should be still good enough for one MT5 scalp chart. I have also seen the 'price' is not always the same, the Mt5 has a simple Metaquotes account and that price is sometimes a bit different than that from my broker and MT4 charts, but not much, but still it's good to keep an eye on that.
Maybe later on I will switch to Future data, but first I will prove to others and to my self, that I can make it in Forex alone with a complicated system with, of course 'lagging' but still good indicators.
Anyway, thanks for your answer !

Sleep tight.

Ha, ha, I just witnessed a rather big difference, on my MT5 price was just a moment ago 1.10444, while on MT4 it was 1.10424, now it's equal again….

Market data, from futures and etc... is "Life" in my humble opinion and experience.

If you use all Intel provided here by Michael and as he said before, be able to build your trading style and see how things really work.
Is just matter of time to be successful in markets.

PS. Of course this is something like personality, each one has one.

"Once a very wise person said... No matter how many times you fall/failed... what truly matters is you don't give up and keeping forward."

Green pips to all mates special to bionics - Michael

One thing that Michael mentioned here and i never saw before is how DXY can help for those who trades Majors currencies cross with USD.

I realized that last year by myself and until that never saw nobody mention that.
NOT SAYING THAT NO ONE KNOWS THAT OR MENTIONED BEFORE, JUST SAYING THAT I NEVER SAW PEOPLE TALKING ABOUT IT.

Stophunting project


Hello dear subscribers,


I would like to provide you with an additional auxiliary indicator for our project No. 9. The ZigZag lines are calculated from the fractals, which provides an even better representation.



As you can see, the fractal indicator (yellow lines) manages about twice as many movements, as the normal ZigZag indicator (blue lines) with a setting of 4/2/1.



In the M1, the individual movements are drawn even more precisely, so that stophunting can be identified even better. The optimal setting for the indicator should be 2. You can use it to refine the lines. For those who do not yet know project no. 9, please click on the link, then you will come to the project start. There you will find the information and all the indicators needed for it.

Stophunting, Project No. 9 starts

I hope that this presentation will help you. Try to use my examples to understand which stops the big players will start next. From this you can quickly see where the next movement is going. As soon as you have gained your first experience, you are welcome to post a presentation with a detailed comment.

I wish you much success
best regards
Michael

Michael

My congratulations and thanks to you.
What a thread this one that you create and start to build, so noble, share all your knowledge with no selling things to new and more experience traders, or fake promises.

For those who are new into financial markets maybe not know how hard it is to get some help and even such structured project like this one that I can say, not saw before, not in this level of environment, friendship and respect.

All my respect and wishes of the best to you dear Bionics/Michael.

Michael,

I´m deeply impressed as well and love to read all of your valuable information.

Fair enough to say that I have still problems to find out how to use for my trading style as a trendfollower

who takes trades based on development on daily timeframe. But we will see ... perhaps one day it makes "klick"

and I understand how to work with .

Best greetings from Germany.

Probabilities of winning with stop loss


Hello dear subscribers,


first I would like to take the opportunity to welcome all new subscribers to this blog. I am very happy about your participation and hope that you will find many good ideas in this blog. This blog is a kind of buffet where different ideas for scalpers, day traders and swing traders from the forex and futures market are available. From this, everyone can create their own individual setup that takes them further. I keep my fingers crossed for you and will continue to try to post creative and informative contributions in the future.

The question I get often asked: Should one work with a stop loss or not? I cannot give a specific answer to this, as it depends on the individual case of the trader.

First of all, there are three options: You use a stop loss or do not use it. The third option is to use hedge strategies. I also like to use a hedge strategy when I have a good run. Then I run my trade and only trade the individual pullbacks. If I have placed a sell limit order and realize that the big players still want to get the stops above, I also use hedging, to expand my stop. As a rule, I try to get an optimal start with the future data and the identification of the Stophunting. If that goes wrong, I let the trade run into the stop, usually I get out of it manually beforehand. Since I complete 10 to 20 trades daily, there are enough opportunities for a new chance. It is not the daily result that counts, but the monthly result. When trading with money that can be dispensed with when in doubt, trading is much more relaxed, although a loss is always a confirmation that you have overlooked something important.

At the beginning of my trader career, using a stop loss was hell. No matter where I started, my stop loss was often triggert and kicked me out of the market. Today I know that it was the big players who focused on stophunting to generate new liquidity. After so many years they have become so professional that they manage to make life difficult for scalpers, day traders and swing traders at the same time. Initially I was really frustrated when I was stopped, but I was more relaxed when I stopped by myself, even though I lost there too. Losing is not a nice thing, especially when it comes to your own money. However, you have to learn to lose in this game to be able to win. And that takes time.

Many beginners increase their stops, in the event of a loss, because they hope the price will turn bullish again. So the Trade 10 Pip runs into the minus and suddenly the price turns and goes up again. As soon as the price has risen somewhat, most beginners close their trade and are happy not to have lost. If you ask them why they got out, the answer is: the price has now gone up 10 pip, the likelihood is high that it will go straight back down. One crucial thing is saved by the beginner: "It was good to increase the stop loss, so I didn't lose." But one day this habit becomes a big loss. In principle, it's more about psychology than losing a few dollars. Losing unleashes fear of losing, whoever loses more than 50% out of 10 trades, has a difficult time psychologically.
Before we get a little more involved in this area, we have to speak about a few basic things first.



Let's say we have a 80% chance of winning, which is very high in this market. Our risk-reward ratio is 0.5, as we get $ 5 if we win and get $ 10 if we lose. We make 80 trades in profit, earning $ 400. With 20 trades, we make a $ 200 loss. This is initially a profit factor of 2 because we made twice as much profit as loss. We made a total of $ 200 and an average of $ 20 per trade. These $ 20 are our expected value for future trades.

In the second case, we have a 40% chance of winning and a risk-reward ratio of 2 because we earn $ 10 on every win and lose $ 5 on every loss. After 100 trades, we made $ 400 and lost $ 300, which equates to a profit factor of 1.33. Our expected value is $ 10 per trade. Now it is likely that the first example will be more successful than the second example. At first glance, this seems to be true, but in reality it behaves very differently.



Let's first look at the probability that we win. The red bar shows the stop loss, the yellow bar the entry and the green bar the take profit (TP). We do not take spread and commission into account here. In example A we see that the stop loss is as far away as the TP. The probability that the TP will be reached first is 50%. The risk / reward ratio is 1. In example B we use a stop of 1 pip and a TP of 3 pip. The risk-reward ratio is 3 because I have the opportunity to make three times as much profit as loss. The probability that the stop loss will be reached before the TP is 75%. In case C we increased the stop loss to 3 pip and reduced the TP to 1 pip. The risk-reward ratio is 0.25 and the probability is 75% that I will achieve 1 pip profit. The calculated probability refers to a trade that I blindly place in the market without using a strategy.



Point A

In this example we assume that we calculate a stop loss of 1 pip and a TP of 4 pip. The spread is 1 pip. Normally we would have a risk / reward ratio of 4 as we take 1 pip risk and expect a TP of 4 pip. However, this is not correct since we have to take the spread into account as costs. This reduces the risk-reward ratio to 1: 2. The probability that my TP will be reached is 20%. Now we calculate 100 trades that will be carried out. I calculated $ 10 per pip. We close 20 trades for $ 40 each, for a total of $ 800. We close 80 trades at a loss of $ 20 each, for a total of $ 1,600. In total, we have a loss of $ 800. It is interesting that the broker earns $ 1000 over the same period.

Point B

Here we proceed according to the same principle, whereby we set a stop loss of 4 pip and expect a TP of 1 pip. The risk-reward ratio is 1: 0.2. That means I have to win 5 trades to make up one loss. The probability that my TP will be reached is 80%. If we calculate 100 trades again, we will make a profit of $ 800 and a loss of $ 1000 at the same time. That's a total loss of $ 200. Overall, we have $ 600 less loss on 100 trades as in Example A. If we set the stop loss to 100 pip, we would have a profit of $ 990 and a loss of $ 1000. But even with a 99% chance of winning, we would still have a $ 10 loss. Nevertheless, the loss is lower with a higher probability of winning. At first glance, this proves that the further the stop is in relation to the TP, the more profitably the probability works. However, this is a false bill, because holding an 80% probability of winning is already an extraordinary achievement. Let's look at the example below.



In the previous examples, only the pure probability was initially calculated. Let's assume that in example A, with a profitable setup, we are able to increase the probability from 20% to 40%. That would give us a profit of $ 400. In example B, we increase the probability from 80% to 90% and would also achieve a profit of $ 400. However, increasing the probability from 20 to 40% is easier to achieve, than a increasing from 80% to 90%. In the second case, there is simply too little room for improvement, which makes it significantly more difficult for us. Working without a stop loss certainly means increasing the likelihood in your favor, but it also involves an unpredictable risk, so I would recommend working with a stop loss.

With this example, we can guess that exchange trading is always a losing trade in terms of probability. The advantage of a trader is to influence the likelihood in his favor by generating a market advantage from information that brings a higher probability of profit. In gambling, the cards or the lotto balls have no memory. In trading, certain processes, for example in Stophunting, are always carried out according to similar principles, because they are based on people who have a memory. This makes trading less of a gamble.


In this context, I would like to make one more important point.

I keep reading that traders claim the big players are waiting for certain numbers from Europe / USA or certain meetings from the ECB / FED to make concrete trading decisions that drive the price in a certain direction. In my opinion, that's a mistake. As we know, the big players first have to collect their positions and then push them in a certain direction. Depending on the volatility, these collecting actions can take anywhere from a few hours to a few days. If the Fed were to make a decision that would have a positive impact on the dollar, the big players could only start collecting the dollar afterwards. That would be a bit difficult in this case, since everyone wants the dollar. This means that the big players must have made their decision many hours before the actual breakout. If the big players collected the euro and the FED gave positive news for the dollar, the big players would still push the price up to make their profits. What comes out of the important meetings is less relevant for the big players at first, but what is more important is the increased volatility that then takes place at that moment. The mere fact that prices are going up and down at this moment shows that traders have different opinions. In this back and forth, the big players further shop on and finally push the price in their direction.

Money makes the world go round. We should keep in mind that around 20 million lots are traded in EURUSD per day. The big players trades round 16 million lots. In this respect, it should be completely logical that news, meetings or rumors in no way affect the way big players work. Of course, statements from the FED or the ECB will have an impact on the markets in the medium or long term, but once the big players have collected the euro, they will push the price up, no matter what happens. The meetings used to be a game of luck for me because I never knew where the course could go. With the information I have today, I can estimate and calculate that much more precisely. In 80% of cases, it is already clear where the course is going before a meeting. However, that is only my assessment.


As you know, there is, in my opinion, no concrete upward or downward trends, but always only movements that are aimed at getting traders to stop in order to obtain the necessary liquidity. The goal of a trader should be to trade precisely these movements. Depending on the time unit, there are different movements in the course of a day.



One should take a closer look at these different movements. Here ten different trends were compared in different time units. In addition to the seven known time units from D1 to M1, I have added three more time units in the tick chart. T32 corresponds approximately to the 30 second chart, T16 corresponds approximately to the 15 second chart and the T08 corresponds approximately to the 8 second chart. A tick chart has the habit of forming significantly more candles when there is high volatility and significantly fewer candles when there is low volatility. This means that with less volatility, no unnecessary space is wasted on the chart.

In the example shown here, an average ATR of the last 10,000 candles was used. The average ATR in D1 was 82 pip in the last 10,000 days and 4 pip in M5. This means that 0.06 pip per minute was reached in the day running and 0.81 pip per minute in the M5. The pip size to be achieved was 82 pip in the D1 and 1166 pip in the M5. The T08 shows the largest fluctuation range with 5774 pip. It is quite clear, that the number of these pips can never be reached in one day in the trade.

The following calculations are pure averages and of course change daily. With a zigzag indicator with the setting 8/4/2, there are an average of 25 trend lines per day in the M5. An average of 12 candles and an average of 12 pip per trend line. However, this does not mean that each candle reaches an average pip because there are bullish as well as bearish candles. If you were to trade these 25 trend lines correctly each day, you could get 300 pip. On average, a trend line runs for almost 1 hour and 0.2 pip is reached per minute. This 0.2 pip is an average for the whole day. From 09: 00-11: 00CET and 15: 00-17: 00 CET the greatest volatility is within the EURUSD. Frankfurt and London are in the market in the morning, New York, Frankfurt and London in the afternoon. Within these 4 hours you can more than double the pip size per minute.

You can find the complete contribution here:

Increase our hourly dare?




Another point to influence the probability and reduce the risk is the length of stay in the market. Using this comparison, I found that the downward moves in the EURUSD are between 30 and 40% faster than the upward moves. This is an important finding, since I believe that the longer you are in the market, the greater the risk of being stopped by an unexpectedly strong movement. In this case, if I only bet on a downward trend within the EURUSD, I could reduce my time in the market by 30-40%. Provided that the price movement would continue to behave in the same way in the future.

You can find the complete contribution here:

Who is faster the euro or the dollar?






I have found that the efficiency of my sell orders is almost twice that of buy orders. That means when I go short I have almost twice the efficiency as when I go long. Of course, this often depends on the trend currently prevailing in the market. In our example, if you only concentrated on the short positions, you would have 200 pip win in the same period without changing your trading strategy. Of course, this result does not have to be so, but the probability is high.
After that, it's all about optimizing the win rate, the pay-off ratio and the expected value in order to trade profitably.
You can find the complete contribution here:

Easy increase in trading efficiency!


Conclusion:

A high probability of winning only satisfies your own ego, but is rather counterproductive in terms of probability. A high probability of winning does not mean that the strategy is also profitable. What matters is what we win and lose on average. For this we need the profit factor. If the profit factor is 1, it means that you invest $ 1 and get $ 1 back. There is no profit from this. If you get back less than € 1, your profit factor is less than 1 and your strategy would not be profitable. If you get back more than a dollar, you will make a profit. The profit factor would be greater than 1, making your strategy profitable. The higher the profit factor, the better the strategy. As an adjusting screw, I would rather work on the risk-reward ratio than on increasing the probability of winning. High odds of winning over 60% with a win rate of 1: 1 are fragile and cannot be maintained in the long run. The first goal should be a profit factor of 2, which you can then optimize. With the expected value you have a basis to calculate future profits.

The three most important values are the total return, the drawdown and the average monthly return. Trading success does not result from the optimization of the hit rate, but a top performance results from the optimization of the exit. And to ensure that we enter the market at the right time, we continue to deal with stophunting.

I wish you a successful trading day

best regards
Michael

What a post

About the big players a could not agree more.
I guess would be a huge mistake think that the big ones don't have the information before it is released to "rest" of us.

In a market where 12 institutions control the price...

Very naive in my opinion think that.

Naive view

Hello Dcrs,

First of all, I am happy that the articles will help you and you can benefit from them. Different opinions are responsible for the fact that the stock market can function at all, so it is perfectly okay that you have a different opinion, which I fully accept. Basically, people are described as naive who cannot adequately assess circumstances and actions or who are ignorant. Since there is no proof that the big players already have all the information before the figures are released, one can only speculate about them. Also a assuming regular collusion with the ECB / FED or governments would also support a hypothesis or a statement that is considered to be unprovable. In this case, it is actually not possible to adequately assess the circumstances and actions. In this case, one cannot start from a naive view.

I wish you a successful trading day
best regards

Bionics / Michael

I am sorry if I expressed myself wrong, I was not intend to offend you or anything like that.

When I mean naive about the privilege information of reports and etc... for big players I really mean about that.
I understand your opinion and respect very much.

But let me take an example.

Years ago when I was basically studying and focus in trade high impact news, I had a very interesting in Bloomberg platform for it, so I scheduled a meeting with the company here in my country, 2 experts attended me and gave full explanation about the platform and it's functionality and they said something that I already feel, like I said here: " about the high impact news the information it is already in our platform before to be released but we can not give you..." , you are right about the proofs of any kind of special and the big players had previous information before us.

But still on this days I guess we do not need to have a full case and proofs to know or think, believie in something like this that who has the power will do everything to keeping.

But this is my personal opinion and experience.
Perhaps I am share too much my personal experience and thoughts.

Tks Bionic for you respect, you have all my and admiration too.

Have a great weekend.

High impact news

[quote=Dcrs;12743686]{quote} Bionics / Michael I am sorry if I expressed myself wrong,


Hello Dcrs,

First of all, thank you for your kind words. First of all, it is very difficult for all of us to express ourselves clearly in this forum. The background is the different mentalities, the languages with translation and the fact that the future and forex market is very complex. Misunderstandings are inevitable. I already thought that, which is why I formulated my answer very generally.
I only know the Thomas Reuters Eikon platform , but I know that Bloomberg is still relevant and leading decades after its introduction, but also in terms of price. I didn't find the $ 20,000 annual fee efficient for me, especially since I only work with one currency pair. Information is indeed shared very quickly there, but the problem is that retailers react differently to messages.
I wrote an interesting report 2 years ago:

NIO, three factors that make it difficult to trade!

The big uncertainty factors are not the news, but what the dealers interpret from it. In addition, the forex market is a billion dollar business, the big players win about $ 400 million a day, so that there are often irregularities. Even if the big players have many advantages over us smaller traders, we are on two points in Advantage: If we want to buy or sell, we are immediately in the market and if we win a few thousand dollars we don't even stand out. Since I spoke with some high frequency dealers about their work, I have a little more respect and my view of the market is differently. If I had known, at the beginning of my trading career, how difficult this market was, I probably wouldn't have started. If you play against world champions on the soccer field, you know where you stand after a game. As a trader, you only sit in front of your PC and cannot see your opponents. Nevertheless, you have a realistic chance of 1:95, which is significantly better than with the Powerball. To gain a statistical advantage from this, you have to work really hard and be creative. Still, it's the most beautiful job in the world and I love the challenge.

I wish you a nice weekend

best regards
Michael

Tks Michael
You have all my respect and good wishes.
This thread is soo useful and your sharing knowledge here is amazing.
I will continue studying/reading here.
Another thing that I already mentioned here is always open mind and learning every day, thr markets are so endless that every day I learning something new.

So tks again and good weekend to all buddys

Cheers

A good source for information is Hedgeye. They have different information packages at different prices. Reasonable prices for active traders.

I perfectly understand what bionic teaches here and I think the solution to all retail traders is knowing the real volume and ofcourse lot of trade place by the market movers or should I call them stop hunter. Thank you bionic

Hello Bionics,

Thanks a lot for your posts which contain a lot of valuable information on the Forex market internals. Please take a look at the below chart which shows the GBPUSD move upwards 15 seconds before the BOE news release. It is a clear sign of how these figures can be leaked to big institutions to give them the upper hand.

Key candles in Stophunting

Analysis of the past week


Hello dear subscribers,


Today's article is again about the identification of stophunting, today we will take a closer look at the key candles. In order to take a closer look at the course of the past week, we need an overview in the daily chart of the EURUSD.



First, let's look at the price from September 1, 2019. There we see a yellow key candle (point 1), which is a stronger upward trend that has broken a strong resistance zone. Since many traders only got involved in the course of this strong price movement, it was initially not necessary, to look under the zone for stophunting . We recognize that points A, B, C and D were at a similar price level. At point C, many traders, who had placed their stops under points A and B were stopped out. Interestingly, the course went up strong after that. Last week the course reached point D, was rejected again and reached point E earlier this week. I plotted Point F because a key candle was already plotted at the beginning of September (Point 2). This area could again ensure that the course goes up a little bit again.



Let's zoom in a bit closer to take a closer look at the last two and a half weeks. On Thursday two weeks ago a strong key candle emerged which I outlined in yellow. This strong downward movement has broken through some resistance zones and many traders have only entered later the movement. For this reason, I did not expect a stophunting over this key candle. Of course, that could have happened, because I'm not allways perfect at identifying the key candles either. I got the first confirmation last Friday when there was a very strong move up and it stopped in the last quarter of my key candle. In the Asian market on Sunday, the price initially went down a bit. On Monday, I first expected the course to go back to the open price and then head down. I was wrong. My goal at the beginning of the week was the end the purple zone. This zone was reached during Wednesday, but was not breached. Thursday was very efficient, but the price did not reach the end of the purple resistance zone. At first I thought on Friday that the price could move higher again, but with my future data I could see that the dollar was bought strongly. During the course of Friday, the course broke through my purple zone and ran right up to the blue zone below. By the way, on Friday of the penultimate week the price reached an above average Pip /10 value per candle. The number 515.5 shows me a high level of market willingness to bring the price above this high in the medium term.



Let us first consider the last three trading days in EURUSD H1. In this downward trend, four key candles were identified. On Tuesday and Wednesday a strong resistance zone formed at points 1 and 2, which allegedly could not be broken. Many bet on a further upward movement here and were kicked out of the race by the strong key candle at Point B. You can see from the further movement that the big players found it unnecessary to push the course up again to get more stops. On the contrary, another stronger key candle formed at Point C immediately afterwards. A few hours later the course slowed down and an equilibrium developed. Around 9:00 CET on Thursday there was a small breakout to motivate further long traders. This movement ended exactly in the key candle of Point C. When the USA came onto the market, the price went down sharply and a new key candle is formed at Point D. In the late afternoon the course slowly went up again and ended on Friday morning, in the area of the key candle at Point D. Then the course went down more strongly and formed a new key candle at Point F. When the course went up again to Point G, It ended exactly in the area of the key candle of Point F. First of all, the big player is always interested in suggesting to traders that it is an upward or downward movement and then to drive the price in the opposite direction. This trade is usually done with a strong move up or down. Few traders are able to take this movement from the start, so you usually only start in the middle of this movement and set your stop according to your requirements. Since most traders enter the market with a market order, the big players can identify exactly in which area most traders have entered. Most stops that are worth running are located immediately, below or above this entrance. For this reason, stops are rarely above these key candles and show us very precisely where a possible trend reversal can begin.

With the identification of the key candles there are some challenges to be overcome. Different time units naturally show me different key candles. Not every strong movement is automatically a key candle, it essentially depends on what happened in the course of the course before. A key candle automatically results from the fact that it is a movement that nobody could have foreseen. In this case, the big player is not likely to find interesting stop zones above this key candle.



Based on the key candles, the price in the Forex market can unfortunately only roughly calculate a possible turnaround. There is no concrete information in the form of volume and liquidity that can only be obtained from the future market. Let's look at a small example from Friday between 2:30 p.m. and 4:00 p.m. CET. Around 14:30 CET we can see at point A and B that large sell market orders have been absorbed in the market. These were long trader stops that were fished. At the same time, some buy market orders were placed, which pushed the price up briefly. At Point C, strong sell limit orders ensured that Ask was absorbed, which ultimately slowed the price. Then the price was pushed further down. From points D and E we can see that larger buy market orders have entered the market. This could be partial sales of the dollar and the purchase of the euro. Since there was no strong absorption at that time, it was a nice opportunity for me to go long. The representation of the heat map, however, is somewhat inaccurate for me, because you cannot see at what price level how much solder was absorbed. Nevertheless, you have a rough overview of where it is worth taking a closer look. I have discovered an interesting way to make the specific limit orders visible in the market and am thus able to make even better trading decisions. It is true that market orders move the market, but limit orders determine where the market will go in the future. And precisely these limit orders cannot be identified.

That is exactly why we will deal more closely with these limit orders in the future. The big players are forced to collect larger portions of volume in order to generate an advantage. And this collection of volume takes place exclusively with limit orders. The advantage of these iceberg orders is that nobody can see them and there are no major market movements at the same time. In our new project 10 we will then discuss in detail how to identify them down to the smallest lot.



On September 27, 2019 (Point A) I pointed out that the purple zone is a strong resistance.

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. Basically, this gap is a major resistance for me, because it was a strong demand market, at the time it was created.

Here you can read the post again and find a very interesting auxiliary indicator.

EURUSD where is the journey going?


Of course, at that point in time, I couldn't know whether the price was closing the gap or not. But when the course was strongly rejected, I knew that this resistance zone could possibly work. In such a case, you can look for long trades in the medium term. Next you should identify the key candle. At point A, the price went up again strongly and formed a new high at point B. At first, the price went down unexpectedly sharply and then formed an equilibrium. Many assumed that the price would go up again and were surprised when the price continued to go down. In this yellow move at Point B, relatively few traders were short positioned, but enter the market later. Therefore, there was no reason to go beyond the high of point C because fewer stops were suspected there. A little tip. No matter what time unit you are in, simply look at the individual movements and first draw a possible stop area under each trend reversal. If a turnaround was caused by a strong up / down move, chances are that most traders only entered the market in the middle of that move. The big players will rarely look for stops under these key candles. A trend reversal could then occur within this key candle. However, you always have to see this, in the overall market context.

What is much more interesting, however, is the fact that the price has come back near the big gap. First of all, there is the possibility that the price in Zone D will go up again, but that gap (Point E) could also be closed. That would mean a price slide to at least 1.07300. Regardless of whether the gap will closed or not, the purple zone is initially a very strong resistance zone and could cause the price to move towards 1.25 again. But these are pure speculations that are not relevant at first. The decisive factor is how the course will behave in the next few weeks. Because of the Stophunting, a course always runs in ZigZag lines. We must always pay attention to the key candles that initiate a turnaround that simplifies our forecast for the coming days or weeks.

In my daily trading decision, it is always helpful to know whether we are in a medium-term upward or downward movement. Therefore, as a scalper, you should always keep an eye on the larger time units.

I wish you a great weekend

best regards
Michael

Stophunting


Hello flockofpips,

First of all, I am very happy that you like this blog and that you receive important information from it. I agree that the market only moves because the market orders (volume) meet the limit orders (liquidity). Since the big players almost exclusively use limit orders to collect Ask or Bid, they need market orders, if possible at similar price levels. This volume can only be obtained in large quantities in the form of stops, which is why they specialize in stophunting. I created this blog over 2 years ago to write a trader's diary for myself and find like-minded people with whom you can exchange on a high level. Through the exchange with individual subscribers, questions arise that I have never really thought about and from this projects develop, that bring us all forward together. I don't want to teach here, because I don't advertise a system or want to earn money from what I say. I know you didn't want to put it that way, it was just important to me to emphasize that again. My trading style is characterized by strong creativity, but I would never say that my approach is better than that of other traders. I respect every opinion, as long as it does not try, to influence my way of working. Although I am always open to ideas and creative perspectives, as long as these are things, that only a few traders have thought about so far. The traders will find many ideas here with which they can create their own setup. Of course I am happy to help my subscribers if they have any questions about my theories, statements or ideas. Because at the end, that helps us all. Quit pro quo (one hand washes the other)!

I wish you a nice weekend

Best regards
Michael