The Equilibrium, a key to success!

tks

Bionic currency calculator


Hello dear subscribers,

Two days ago I provided you with a calculator that allows you to calculate an efficient currency pair to get the best chance of winning.

Bionic currency calculator

I have now calculated a few indices and precious metals based on my individual data.



The USA Tech, USA 500 and the DAX are now above the EURUSD, but the EURUSD still has the highest liquidity with a trading volume of $ 2 trillion per day. With the calculator you will achieve different results depending on the spread and you may still find an more efficient currency pair, indices or precious metal.

I wish you a successful trading day

best regards
Michael

1 volume chart

Hello extjsjquery,



I hope you are happy with it.
best regards

Hi Michael

I believe that you are familiar with the trader and coder GomCD who is I guess one of the pioneers in the cumulative delta indis. The indis and codes from him are open source and for data futures, for platforms that we use.

I guess you can try take a look and this can save you some work and a little edge since it is all open source.

Hope this can help.

Cheers have a great weekend

Cumulative delta


Hello Dcrs,

Thank you for the tip, this variant could be a cheap alternative for many traders. I dealt with GOM Price Ladder, Market Delta, and Order Flow a year ago, but the presentation is not sufficient for me. In addition, I don't find the Ninja Trader quite as professional. In my Prop software I can use all the indicators I have programmed myself, even though the system is not open source. Sometimes that's a good thing, especially when it comes to a lot of money. The big problem is that all software providers focus on the market orders. They move the market, but they don't show me in which direction the price will go. Limit orders are solely responsible for this, and it is precisely in this area that most providers have significant weaknesses. I'll go into that in more detail at our project 10. Thank you again for the idea.

I wish you a successful trading day

best regards
Michael

No problem Michael

The idea was only a shot to try give some help and save some hard work for you in coding.
I used to use Gom in the ninja 7 platform not on this days anymore....
As you know this has been long time ago since ninja for quite a while is on version 8 much more faster and "better" if we compare with the old one version 7, but I also preffer to use the same platform that you use in present.

Tks good weekend to you too buddy.

Strong Buy Limits on Thursday


Hello dear subscribers,


A crazy week is over and on Friday once again proved that the big players are doing exactly the opposite of what the masses expect. Let's take a closer look at that.



Last week we can see very well how sell limit orders were collected on Thursday, Friday and Monday (point A, B, C) and the price was finally pushed down on Tuesday.



Although we had a stronger short on Tuesday, the sell limit orders continued to be collected on Wednesday. The sell limits at points A and B suggested that the price could go lower.



On Thursday the price went down again and we can see at Point A that buy limit orders were increasingly collected. I suspected that the price should be pushed up a bit again to stop the short traders and then continue to go down.



At the time, like many others, I would not have expected on friday, the course to go this far. At Point B we see that further strong buy limit orders have already entered the market on the high.



In the overall overview, however, we can see that smaller sell limit orders were collected at Point A on Friday. The majority of traders assumed that the price would go down again on Friday to close the open gap. I suspect that the big players realized that on Thursday at Point C, many traders went short, to be part of another move down. Larger sell limit orders entered the market on Tuesday and Wednesday, so I could imagine that there are still some open positions in this area. If so, the price should come back relatively quickly. The big player may also be out of his short position on Thursday because so many traders were hoping for another short. With this, the big player could not have made big profits in the area of short positions, but by moving up, he would have got a much better start for a short.



In the overview of EURUSD in Forex, we can see that the market was waiting for another short on Wednesday and Thursday. There was another strong breakout on Thursday and Friday, which also supported the assumption. With the breakout upwards, the price first took out the high from last Friday (point B). With my zigzag indicator you can see stronger breakouts upwards at points C, D, E, F and G. From the respective starting point, the traders were very bearish there. There were some stronger moves down, but the strong moves up were outnumbered. This means that the majority of retail traders in this equilibrium were bearish. A big player only pushes the price in a certain direction if the majority of retail traders are oriented in the opposite direction. This upward reaction could have been foreseen, but I have paid less attention to my zigzag indicator over the past few days. I will definitely keep an eye on that next week.


I wish you a successful trading week

best regards
Michael

Problems for the big players?


Hello dear subscribers,


Before we take a closer look at limit orders in our next project, I would like to take a closer look at a big player that I admire very much. Goldman Sachs is one of the best and most professional traders in the world in my eyes. In the past 20 years, this group of traders has achieved above-average results. I have reported about this several times in the past. In the last few days, I have looked a little closer to Goldman Sachs' numbers and worked out a few interesting points. The detailed business data of Goldman Sachs can be found here:

Goldman Sachs Group Inc (GS) SEC Filing 10-K Annual report




I used the numbers to create a table for you that lists Goldman Sachs' last ten years in sales. At Point A we see the gains or losses Goldman Sachs made on different trading days. The green fields show the positive trading days, the red fields show the negative trading days within a year. At Point B I have averaged the past ten years.

Point C
On average, Goldman Sachs completed 253 trading days per year, including 221 trading days in profit and 31 trading days in loss.

Point D
Profits were made on 87.6% of all trading days, which I think is an excellent achievement. At first glance, you might think that Goldman Sachs is doing well. However, that is only half the truth. Because what counts is what you earn on these positive trading days (87.6%). For this, I have created a calculation that can deviate significantly from the realistic numbers, as these are only approximate values.



At point A, I first took an average to create a calculation. The annual reports use $ 25 million increments, so I used the average here. At Point B I also assumed this mean for the losses. At point C this results in the total profit and the losses that I calculated from point D for each year. This resulted in the total profit per day at Point D. At first glance, everything looks excellent.



Goldman Sachs generated approximately $ 51.3 million in earnings from 2010-2014 and $ 37.7 million per day from 2015-2019. This is actually a decrease of 26.5%. For such a professional company, this is already a significant decline. While the profit and loss days have not changed in the past 10 years, the daily profit has decreased significantly.



In my article: "The new generation of traders" I have already estimated that the big players win around $ 400 million a day. With over $ 40 million in daily earnings, Goldman Sachs would have a 10% stake. Deutsche Bank and other major banks would share the remaining 90% and there are certainly bigger big players than Goldman Sachs. Nevertheless, Goldman Sachs was able to prove over 20 years that they are among the most profitable players, for me it was crucial how Goldman Sachs has work in the past decade.

You can find my contribution here:

The new generation of traders

The big question is why has Goldman Sachs made 26.5% less money a day over the past five years than from 2010-2014? On the one hand, it is certainly due to the high-frequency traders, who make the big player's life more difficult, and the institutional traders, who can access ever better technology with optimized algorithms. Another reason could be the other big players e.g. Deutsche Bank who manage to act more efficiently. In addition, I also believe that there are more retail traders today who work with significantly better profit rates than 10 years ago. The reason is better data feeds and a deeper insight into the markets. Brokers are also interested in keeping their customers long-term and provide their customers with better information today than they did a few years ago.

Of course, we cannot determine exactly why the market for a large player like Goldman Sachs has become more difficult than it was five years ago. We definitely notice that spending on analysts and high-quality technology no longer offers the big advantage. On the other hand, this could also be an opportunity for the professional retail traders who are active in the market.

Now one could assume that if the market gets heavier for a big player, it actually also has to automatically become harder for retail traders. This claim needs to be differentiated because the trading strategies of big players and retail traders differ significantly from one another. If a retail trailer has chosen a certain price level at which it would like to get started, this is immediately possible. An exit can also take place immediately. A big player may have to collect a certain number of Bid or Ask over a few days and then push it in a certain direction. Even getting out takes some time and cannot even done immediately. Of course, the big player can move the market because of his large capital, but there are other big players who have to represent the interests of their customers. This often leads to conflicts of interest that can mean millions of dollars in losses. In addition, a big player is exposed to a risk of loss much longer, since it takes significantly longer to enter and exit as for the retail trader. Last week, the big players bought a large number of sell limit orders to push the price further into the open gap. Unfortunately, many retailers and institutional traders jumped on the bandwagon at the same time. The big players had to create a new plan last Thursday, sold their positions to retail traders and institutional traders, and then pushed the price up. As we can see, collecting bid and ask is becoming an increasing problem for big players.

We retail traders can take advantage of this disadvantage of big players. We can enter and exit the market almost at any time. To make the right trading decisions, we only need the right tools and the right market view. The question is always how to use these options. We will never get the full view, but we learn from our mistakes and get better every day. In the next few weeks, we will be dealing with an interesting market analysis, that I have never seen anywhere else. I am convinced that this could be another milestone on our blog.


I wish you a successful trading week

best regards
Michael

Very nice Michael

I also admire the Goldman and Sachs for the last years they really took the top from other and are this days the number 1, in my opion.

The K10 report I had taking a look for the last years by myself.

Very interest your post.

Can not wait for see what you are going bring to the blog on next project and your approach of it.

I am Curious about your view/approache on limit orders.

The cumulative delta was a point and is something personal to me that I like a lot to trade.

Tks and congrats

Goldman Sachs

[quote=Dcrs;12772769]{quote} Very nice Michael


Hello Dcrs,

First of all, thank you for your kind feedback. This report on Goldman Sachs was created by accident because I have not been able to understand some situations in the last 4 days in EURUSD. That is why I again dealt with the question of how the big players operate in the market. In doing so, I rediscovered the K10 reports of the past 10 years and roughly readed the 2000 page annual report. From this information my last post about Goldman Sachs arose. To learn how the market works, we need to understand how big players work.

The challenge is that the big players fly an airplane while the retail traders are driving a car. When a pilot tries to explain to a driver how to control an airplane, the driver is overwhelmed. The way big players and retail traders work differs significantly in how they work. The volume chart, the footprint charts and the market profile are exclusively geared towards market orders, even the DOM and the time and sales list almost only provide specific information about the orders that move the market. This may be an advantage in the short term, but in the medium and long term only the limit orders determine the direction in the market. And it is precisely this approach that is not provided for in almost all trading instruments. We retail traders try to track down the big players' planes with a car navigation system. There are streets in the sky, but we cannot find the big players with the market orders because they only place iceberg orders in the accumulation and distribution phases. And these limit orders are almost impossible to locate. That's why volume charts, footprint charts and the market profile don't really help. But I have found a solution, so we have to look more closely at the individual order types. In the past few weeks, I have already developed a few records and strategies that I still have to formulate. It is just a new way of looking at the markets, it is not a system, but a way to improve your setup. It is interesting that we cannot do without the forex data, since they have an indispensable advantage over the futures data.

The combination of futures and forex data, when viewed correctly, gives a concrete view of the markets that has not previously been considered. While the volume trader has felt an advantage in recent years, my long-term approach is exactly the opposite. If you want to follow the big player, you have to act exactly like the big player. Anyone who tries this only by looking at market orders will not get anywhere.

I hope we can start our new project at the end of this week.

I wish you a successful trading week

best regards
Michael

Hi Michael

I totally agree with your post, and thoughts.

I actually have a personal view that If I share here at this moment others would probably call me crazy, and I do not want to create any kind of discussions and not even close take the focus of this beautiful thread that you create and are keeping very alive and more and more interesting.

Unfortunately I am barely having time to read and keep up on a few threads like this one that I truly have identification with me as person, trader and market views.

Current sell limit orders in EURUSD


Hello dear subscribers,

Here is some current information from the EURUSD.



The week before last, a large number of sell limit orders were collected in the zone at Point A on Thursday, Friday and Monday. Then the price was pushed down on Tuesday. Initially, further sell limit orders were collected on Tuesday and Wednesday. Since many retail traders believed that the price would continue to move downwards, the sell limit orders of the big players were given to the retail traders. The big players collected stronger buy limit orders on Thursday and pushed the price up on Friday. Now you start building stronger sell limit orders again in zone C.



Yesterday, stronger sell limit orders were placed on the high and today we can see that in the known zone C an increased collection of sell limits is continuing. We should watch Zone C today, an equilibrium could possibly take place there where further sell limit orders are collected. If the stronger sell limit orders at point A represent an exit from the euro, the current collection in the distribution phase could mean a further downward decline. This zone seems interesting and we should definitely keep an eye on they today.

On the other hand, there are still a few buy limit orders in Friday's market. There a stronger buy limit delta was generated on the high. Then the price went down on Monday and may have eliminated long traders. It is not uncommon for stronger buy limit orders to be high, but in our case the number is already very high. If the price doesn't go down anymore, it could trigger some nice longs.

We'll be surprised

I wish you a successful trading day

Greetings Michael

36 pip move in EURUSD


Hello dear subscribers,


Another clever strategy of the big players in EURUSD.



3 hours ago from 09:30 CET to 10:10 CET came 2,681 Lot Buy Market in the market on one price level. We were at a price level anyway, where many assumed that the price could go up. Now suddenly an extremely large number of buy market orders entered the market, which prompted many traders to take a long position. We will now take a closer look at why the price went down after.



From 9:30 a.m. I noticed in the order book that buy market orders came into the market and were absorbed at a price level. At first, this is nothing special, since absorption takes place regularly in the market.



First I looked at the limit orders and found that a big player was absorbing strongly in the sell limit area. If you look at the footprint chart in M5 (1st slide) again, you will find that there was not that much liquidity in the market at that time. For this reason, no one would have absorbed so many buy market orders at this moment. So how was that possible?



I first looked at my headmap and found that a big player made liquidity available to himself. Now let's see how that went



The green circles at point A represent the cumulative and non-cumulative buy market orders. In addition, you can see from the blue arrow, a great willingness on the sell limit side to accept this large number of buy limit orders at exactly the same time. The big player now had around 2000 Lot Market Buy and 2000 Lot Limit Sell in the market. At point B, the big player started to dissolve his buy market order, the price went down and triggered some stops of the long traders. The majority of traders were convinced, that the market was going up. New buy market orders came in. The big player used these purchase orders to get out of his remaining position. At point E it was a good time for me to start with a short. I did not assume a stop run from point E upwards, since the fewest traders assumed a short at the upper price level. When the price went down from point D and was pushed up again, the goal was to push possible short traders below point D out of the market. So for me point E was the last high in this game.



In the yellow line of Forex Chart M1, a total of approximately 270,000 Lot Buy Market was brought into the market, since the Forex market is 100 times larger than the future market. We recognize, from 9:30 am-10:10am CET the cumulative delta has risen extremely. For many, this was also an indication that a big player is buying extremely heavily into the market. The overall strategy was very smart as traders in the futures market could only see the buy market orders. At first, many thought that there was a strong resistance zone that needed to be broken. Very few knew that the big player had provided itself with liquidity. In recent weeks, I have noticed more and more, that the big players are increasingly making themselves lvolume available. At this point you are making some loss with your market orders, but you are making up for them with your limit orders. With this strategy, you are able to initiate larger trend movements immediately without having to laboriously collect. To see how things are going today, you should pay attention to how the limit orders continue to behave. To get out of the dollar, the big player needs a large number of ask. However, this may not be necessary at this point in time, because the big player may push the price further down, which would increase profits. I hope that I was able to show you how important it is to pay attention to the limit orders. This is exactly what we will deal with in the next few weeks.

I wish you a successful trading day

Greetings Michael

Own liquidity for the big players


Hello dear subscribers,


In my last post I reported over another strategy of the big players, as I have noticed more and more in recent weeks that the big players are increasingly making volume available to themselves.

36 pip move in EURUSD

First, let's take a look at what exactly happened yesterday.




Yesterday around 10:00 CET at Point A a delta in the sell limit area of 2658 lot was created. A big player put round 2000 Lot Market Buy on the market, which he also absorbed with his own limit sell orders. At the moment, the market saw only the strong buy market orders that came into the market, so many go long . The market has been pushed down and an equilibrium is forming at point B, where the big player may have left his short position. At point C buy limit orders came into the market and the price was pushed to point D. The same thing happened there as at Point A. The big player placing large buy market orders, which he also absorbed with his own sell limit orders. The market of course saw this too and wanted to do it right this time so as not to be stopped again. Many position themselves short here. Overall, a delta in the sell limit range of 2404 lots was created at the same price level. Then the price was pushed up.



Here you can see the data from the future market, in the area of the limit order. The strong delta was created at point A and the price was pushed to point B. There you can see that the stronger orders for limit orders entered the market. Then the price was pushed to Point C where the big players again made available liquidity and a large sell limit delta was created. Basically, I cannot yet say exactly which positions are still open and which have been closed, because this strategy is too new for me. First of all, it is important that we are able to recognize when a big player is making liquidity available to itself.

In my last posts I described the differences between big players and retail traders in the area of their actions.

Follow Smart Money !!!

The only disadvantage that big players have is the fact that they cannot immediately enter the market with large positions because there is simply not enough volume and liquidity. As a rule, they have always used the equilibrium to build up their position and had to wait for ECB or FED meetings to push the price up or down in an increased volatility. So sometimes it took them days to build up their position and then realize their profits. On the one hand, this costs time and on the other hand, with your open positions, you are exposed to a certain risk compared to other big players. In my report on Goldman Sachs you can see that the daily sales figures have dropped by almost 30%. 30% less sales with the same risk is a significant factor for a large, successful company.

Problems for the big players?

I am convinced that the big players are currently trying out a new strategy in different currency pairs by making massive amounts of liquidity available to themselves. Basically, this approach is not new because it has been used time and time again, but this strategy has increased in recent weeks. I think the big players are looking for a solution to get liquidity faster.


In principle, this is initially a hegde if you absorb your market buy orders simultaneously with limit sell orders. The positions secure each other, but we must not forget the double costs involved. Of course, the big players do not have the same costs as a retail trader, but they are actually twice as high at this moment. Of course there is now the possibility to first push the price up and get out of the market buy orders on the high. After that, the price could be pushed down to exit the limit sell orders on the low. One risk that arises is that if you exit your market buy orders on the high, you are still in loss, as the limit sell positions are still open and double spread fees have to be taken into account. If the big player then does not manage to push the price down, he automatically runs into loss.



Now let's look at a few other options.

Point A
2000 Lot Market Buy Orders will be absorbed by 2000 Lot Limit Sell Orders. The big player tries to exit his limit sell orders at a loss, whereby the dissolution of these orders could help him push the price up. The strong market buy orders are perceived in the future market.

Point B
2000 Lot Market Buy Orders will be absorbed by 2000 Lot Limit Sell Orders. The big player tries to get out of his market buy orders at a loss, whereby the dissolution of these orders could help him to push the price down. The strong market buy orders are perceived in the future market.

Point C
2000 Lot Market Sell Orders will be absorbed by 2000 Lot Limit buy orders. The big player tries to exit his market sell orders at a loss, whereby the dissolution of these orders could help him push the price up. The strong market sell orders are perceived in the future market.


Point D
2000 Lot Market Sell Orders will be absorbed by 2000 Lot Limit buy orders. The big player tries to exit his limit buy orders at a loss, whereby the dissolution of these orders could help him to push the price down. The strong market sell orders are perceived in the future market.



I am convinced that this approach is a kind of experiment that the big players conduct to check whether it is worthwhile to provide liquidity or volume themselves. Basically, I think that a hedge makes sense to hedge positions, but I am still very critical as to whether it can be used to develop a profitable strategy. The big player would definitely have a time advantage, since he is able to create liquidity on the market faster. This contrasts with the risk of two positions and twice the cost. I believe that the big players will examine and evaluate this more intensively in the coming weeks and months. The trading range may decrease somewhat if the big player initially leaves both positions open.

First of all, this approach is new and somewhat unusual for me, but it creates a little more movement in the market. A major disadvantage that the big players have not yet noticed: If they provide themselves with liquidity at one price level, this is noticeable in the market. In the past, they were able to collect iceberg orders in the accumulation or distribution phase without the majority noticing. If you now make your own liquidity available, they will come out of the darkness and everyone can see them. With the right tools, it's only a matter of time before one know exactly what you're going to do next. Big players may find a way to make even faster profits , but they are also more predictable. For the successful retail traders, this means a significantly higher probability of winning.

The crucial question we have to ask ourselves: Why does a big player change his strategy? The answer is very simple: Because he is no longer so successful with his previous strategy. If his strategy were successful, he wouldn't change it. That means the big players have bigger problems than they did a few years ago. In this respect, they have a great need to act to increase their daily profits again. This change in strategy shows that they are no longer as successful as they were a few years ago and are looking for a solution. On the other hand, if they don't win as much anymore, that means that retail traders don't lose as much anymore. It is basically a positive aspect, it shows that the retail traders are on the right track.

I noticed that my approach in the past 12 months, I have come a lot closer to the big players. The price and trends can be calculated much more clearly and efficiently, and breakouts are easier to predict if you know what the big players bought before. You will never get a 100% market view, with the right money management and setup 50% is enough. Every percent that can be improved has a direct impact on profits. I hope that by the weekend I will be able to start our new project number 10, where we will deal with exactly these things.

I wish you a successful trading week

best regards
Michael

Big player experiment "own liquidity"


Hello dear subscribers,


In my last post I wrote about the experimentation of big players on how to make liquidity available to themselves. Tuesday once again showed this impressively. After the course on Wednesday, I have a rough idea how it could have happened the day before yesterday. First of all, I think that two big players have teamed up to do this joint experiment.



At Point A yesterday on Tuesday 10:00 CET, 2000 market buy orders were absorbed by 2000 limit sell orders. Then the price was pushed down over 50 ticks. At Point B, the big players might have left their dollar position with 2000 limit buy orders. In the area of point C, the big players could have collected around 500 lot buy limit orders again, after which they pushed the price up. At Point D they played the same game again around 5:00 CET. Again, 2000 market buy orders were absorbed by 2000 limit sell orders. The majority of the market has assumed that it will go short again, the same as at 10:00 CET in the morning. The two big players take advantage of this and push the course very quickly and massively higher. At Point E, they placed 4500 Limits Sell in the market and got out of the euro. At that point the market was very bullish and you can see from the candle at Point F that there were enough buy market orders to service the large limit sell order. Of course, the limit sell orders was activated at different price levels so as not to deter long traders. Then the big players bought another 500 limit sell orders and pushed the market down to point G. There they gradually released their still open dollar positions. Then they was complitly out of market.



The entire experiment would have made a profit of over $ 2 million in the Future Market, but the number of lots in the Forex Market is approximately 100 times larger. That would mean that the two big players would have earned over $ 100 million each with this experiment. Now one might have to deduct the costs and assume that they could not entirely resolve their last position in profit. In order to push the price up and down, however, they also had to bring further market orders into the market, which of course also made a profit. I did not take these profits into account. $ 100 million a day profit is an interesting amount considering Goldman Sachs only earns about $ 33 million a day. If Goldman Sachs was involved in this experiment, you would have tripled your earnings in a day. This would not have been possible that quickly with the available liquidity on the market. However, since the big players provided themselves with liquidity, this was still possible in this case. This day was probably so positive because there was relatively little liquidity in the market at the time. However, the risk could increase dramatically if there is more liquidity in the market. Then the course could quickly move strongly in another direction. As long as the big player has a short and long position in the market, the risk is technically manageable, but it becomes problematic when he has dissolved a position and the market moves strong against him.

Basically, I find this procedure very interesting, exciting and easier to calculate than if you had to collect for a long time. The market movements are smaller, faster, and more manageable. With the right tools, the situation can be grasped quickly and effectively and it is relatively easy to act on the move. In addition, the range is calculable and you can easily see when the big player gets out of his position. As soon as he is out of one position, we know that he still has an open position. In order to close them or bring them to profit, he has to drive the course in the opposite direction again. So we know when a course is going in a certain direction and how far it has to run. I'm curious if this experiment will be included as a future strategy among the big players. If so, we will be able to significantly improve our chances of winning.

The big players have been trading in the forex market for over 20 years, pay billions of dollars for analysts, traders and algorithms and should therefore know the market very well. The fact that they have suffered considerable losses in the area of their profits in the past 5 years shows a lack of creativity in their approach. They are now trying to correct these losses because shareholders continue to expect dividends and an increase in the value of the company. In addition, some banks have achieved up to 60% of their total profits in the stock exchange area. Now they are trying to eliminate their weak point (lengthy collecting at a price level) by providing themselves with liquidity. Of course they will adapt their new strategies, but the “own liquidity” experiment is easier for us to act than if we have to wait for days until the big player has collected his positions. Another advantage is that very few traders know this strategy and can act. Should this procedure prevail among the big players, we only have to scan the individual markets for these situations and enter the market as soon as the big player has dissolved his first position. But that would probably be too good to be true.


I wish you a successful trading day

best regards
Michael

Bionics, you are an amazing person, great professional, trader, analyst and mentor. I sincerely hope to count on your contributions for a long time. My deep recognition of your selfless work, thank you very much for your share your great point of view.

Traces in the sand


Hello jusiur,

First of all, thank you for your recognition and the great praise. Of course I am happy if a subscriber benefits from the market from my point of view and progresses personally, but you should note that my view of the market only reflects my opinion, which can also be completely wrong. I see myself less as a mentor because this blog was created to explain to myself why I was able to act profitably in the past. This thread then developed from this. In this respect, this blog is not entirely selfless, because it primarily helps me. However, I am always happy to help my subscribers if they have any questions or suggestions. One hand washes the other, so we all come one step further every day. What makes me particularly happy is the fact that the information helps you and that is, the most important and decisive point. Of course, I will continue to share my work, because with our next project No. 10 I will publish a view that no one has yet considered. So the real work only begins because we are still at the very beginning. I am aware that my information involves a certain risk for me. On the one hand, successful things get around quickly, which are then copied or misinterpreted. The more retailers follow the same path, the more unprofitable a strategy becomes. But I'm not afraid of it because I only share my views and no setup. Another point could also be crucial. Let us assume that my view of how the big players operate in the market and outsmart us happens to be correct. If the affected big player got this information by accident, they might change their strategy and our advantage would be history. A strategy is only good if nobody knows about it. For this reason, sometimes it would be better not to tell everything. But I think we will get closer to the big players in the next few years. They can change their strategies as they want, it won't help them. It always takes some time, but in the end we always see what they are doing. An elephant always leaves larger traces in the sand than a little mouse. Therefore it is easier to follow the big players than a retail trader.

I wish you a successful trading week

Lovely wishes
Michael

The Big Player bag of tricks


Hello dear subscribers,


Today, the market was once again very interesting and volatile, and the big players gave me the opportunity to discover another strategy. We want to take a closer look at that.



From 07:00 CET to 10:00 CET I was a bit lucky and was able to do some long trades. At lunchtime we were already 60 pip above the open and at first I wasn't sure if it could further go up. From 10:00 CET there was a three-hour equilibrium at Point A. I saw that the big players placed buy limit orders in the market. That was a nice confirmation, for an upward movement. My exit was at point B, because I saw that the big player started to get out.

The strategy of the big player was again like textbook. At Point A, massive buy limit orders were initially placed in the equilibrium. After completing its collection campaign, the course was pushed up. The respective downward movements in the market were used to bring further buy limit orders into the market. Now there are two things to consider. First, the big player collects a large number of buy limit orders within an equilibrium. In order to push the price up, the big player must buy market orders. That means on the way from A to B he buy a lot of Ask. For this reason, the big player has already started to exit at Point B.



We can see that again in the heatmap. At Point A we see that sell limit orders of over 400 lots have been waiting for execution, but were not touched at first. First the long traders were stopped again and then the price went to point B. There the big player started to dissolve his euro positions. He has to be very careful, because if he had dissolved all of his position, the price would have run massively down. Therefore, such an exit must be done very strategically.



The price continued to rise and we can see at points A and B that the big player used the stops of the short traders to get out of a position. At Point C, we see that he has put very strong sell limit orders in the queue, which have not picked up. This means that the big player still had a few euro positions that he could not sell to date.



Now the market started to run down and the big player still had some open euro positions. For this situation he used a very interesting trick. At Point A, we see how the big player, when walking down the course, instructed his algorithms at ten price levels to put strong sell limit orders in the DOM queue. The reason for this was simple: the one who placed the order first is always served first.



The price continued down to point B. At point C, the big player pushed the price up sharply in his sell limit orders. With these sell limit orders he took over his still open euro position. I think it should have been around 1500 lots. He was now out of his euro position and had 1,500 lot sell limit orders on the other side. That was a smart move, because in the downward course he would hardly have found anyone to buy the euro from him. So he bought the euro himself with his limit orders and thus also bought a bid. Since the market was already running down strongly, its position was optimally aligned.



Here we see again how the price was pushed up and the big player with sell limit orders took over his euro position in small pieces. After that, the price continued to go down. Now the big player only had to get out of his dollar position and he solved that quite easily



The price initially went down more sharply and we see at point A that the big player immediately got out of his dollar position. As a result, the price has risen very sharply. The big player was out of all positions and actually did everything right.

Of course, I can only guess whether all of this really happened based on my information and my personal opinion. Nevertheless, it is very exciting to watch the big players at work. Unfortunately, we retailers don't have enough money to use these strategies for ourselves. But we have the chance to study their strategies and to get information based on their reactions that significantly increase our probability of winning. And after all, that's a little ray of hope.

I wish you a successful trading day tomorrow

best regards Michael