The Equilibrium, a key to success!

Ok i got my last screen working 70 dollars at a repair shop well spent money so now i am ready do go on hard next week and try to stay positive until i make a big deposit Friday for me atleast some 6-800 dollars so my account will be 12-1400 dollars then i can trade 1 lot and not risk more than 1.5% pr trade give and take....I started a new account to try and make a trackrecord again cause i had huuuge dradown do to a micromartingale EA i had on and had to trade huuge lots to get out with profit and when i use the hidden stoploss i can not move it and that saves me from any bigger losses and the way i trade i have high winrate but many times just a pip ore two that is why i trade with so high leverage so the broker makes more than me some days...lol...But i will say very satisfayed after first two days...Thank you for everyting you provide Bionics......I saw a webinar from this guy here it wasnt this one,but i think he has done several over years and have managed big funds and worked finacial for years as you have.....But he contradics totally the way we are trading using one pair and other tings atleast i do,but a lot of what he is saying is really good....The fundation of the forex market and all.........Let us know whats your view of what he sais if you have time to watch it he as a around 2 hour webinar that i think you will find if you search on him ore hes company....

On the right way


Hello FXsniper111,

First of all, I am happy that you are making progress with your personal setup and achieving regular success. Even as a scalper, you can earn significantly more than your broker on you if you also work with stock market data. You can also work with a hidden stop loss that you can see at any time. Here you can find more information about an interesting and free trading EA.

Orders quickly and effectively

I find some statements by Anton Kreil (former dealer of Goldman Sachs, J.P. Morgan and Lehman Brothers from 2000-2007) very interesting. Unfortunately, he has developed into a paid trainer, but he has gained some experience as a trader with the big players. You can find some interesting information here.

The right training

I know many of his statements and his approach to trading, but I follow the path of high-frequency traders rather than the path of institutional traders. This is simply because, as a scalper, I act at shorter notice than the big players. However, you have to know exactly how the big players work, so as not to fall into a trap.. Basically, the videos of him are absolutely worth seeing, but you should be aware that many videos are only advertising to sell training. Paid trainings bring some information, but they do not help with your own setup. Every trader has to create this for himself and this is exactly where no trainer can help with. That's why I view the trainers in this market rather critically. This does not mean that their information are bad, but everybody can find this information free of charge on the Internet, he just have to search properly.

I wish you all the best for the future

best regards
Michael

@ BIonics

Hello , i read through the read in preview and was intrested in the data section . I was wondering what can be of equal in regards to ticks data on mt4 plaforms showing atleast a Certain number of cummulation of ticks at a certain price ? We have things like market profiles that tend to collect some levels in regards to cummulated tick data in a certain period like example M15 M30 H1 H4 etc ! What do you say or think of that ? Can that be of use to collect the information as u are using on the other plaforms ?

Regards .

Thank you for the thread it keeps me informed .

Ticks in the forex market


Hello Moneyshs,

First of all, welcome to our blog and thank you for your kind compliment. A market profile in the forex market is calculated from the ticks, while a market profile in the exchange market is calculated from bid and ask. This is a crucial difference, which I have described in detail here:

Volume in forex

The calculation is similar for the footprint chart, I have made a comparison Forex / Future.

Footprint chart in the forex market?

Around 100,000 ticks are generated daily in the futures market with an average volume of 150,000 lots over the past 40 trading days. On average, a trading transaction contains an average of 1.5 lots. Generating a general derivation from this is dangerous and a market profile / footprint chart in the forex market fails. I have examined different alternatives in Forex, but have not found a specific way to do without stock market data. You can find a project here that was calculated from the tick data and should represent a kind of time and sales list. You will also find the right indicators with a precise description.

A kind of time & sales for MT4?

The volume information we get from our forex broker is definitely wrong. I tried to calculate the volume from the price, which is closer to the stock exchange volume than the broker volume. Here you will find the article with the corresponding indicators.

Amazing discovery in volume

In the forex market we do not get a specific volume (bid and ask) so we never know what is going on inside a candle. But that is the prerequisite for being able to act profitably. Unfortunately there is no way to calculate the exchange data from the forex data, so I recommend using additional exchange data for trading in the forex market.

I hope this helps you further.

best regards
Michael

@ Bionics,

Thank you for your reply . seems we the retail traders drive with tinted windows ! thank you for your efforts! apreciate all your work!

Thank you again !

hey bionics read this whole thread, big fan
setup a couple indicators based on your theory and a couple other theory's
top indicator looks at the strength of bulls/bears by separating the red/green candles and measuring it against the average strength, with a blue setting for indecision
second indicator is my attempt at a supply/demand zone, with on price volume indicator to look for volume gaps, obviously not as good as yours and would love some advice on how to set up a better one in pro real time
third one is a volume/trend squeeze indicator, which uses 20 rsi periods, 20 stochastic periods and 20 roc periods to show me any divergence, trend patterns and volume pressure, with arrows to show me automatic divergence, also has a zigzag indicator built in which when volume goes above causes a sharp price drop, not sure how this works, but it is an interesting phenomena,
this indicator is based on spuds stochastic thread theory which im not sure if you've heard of but i'll leave a link https://www.forexfactory.com/showthread.php?t=37111

appreciate any response
all the best



top,middle,bottom of a wave

Pattern sequences in forex


Hello murit89,

First of all a warm welcome, I am very happy that the information in this blog help you. Every trader is looking for individual pattern sequences in order to generate trading advantages. I've practiced this myself for over ten years by combining different information from the Forex market. Although I was able to identify certain pattern sequences, I was unable to derive a general derivation from them. In the Forex market you can refer to the price, time and tick data, but you do not get any information about BID and ASK. The inclusion of market orders from limit orders is the real reason for price movements. The Forex market does not provide this important data. The stock market data is not a holy grail, but with certain filter settings, you can get faster information about future price movements. The faster you discover this information in front of other trading participants, the greater a possible trading advantage. The DoM, the time and sales list and the heat map provide the fastest data in the stock market. I therefore recommend filtering this data in order to identify pattern sequences from it. With the right tones, you can improve your trading response four times.

Striking the right note

Unfortunately, I can not show you a way to analyze gaps in the volume even more efficiently, the real reason is that the volume information in the Forex market is generated from the tick data and thus you do not get a concrete market insight.

Volume in forex

Your approach is very creative, the crucial point is that you can use it to create general derivation that will help you in your daily trading. At the weekend, I will present a way of using the stock market data to predict a medium and short-term price trend even better. In addition, a truth comes to light that every retail trader should know.

I wish you great success

Best regards Michael

Thanks so much for the reply, will take your advice onboard and glad to see im on the right track. Looking forward to the release of your new system.

Big player is watching you!



Hello dear subscribers,


When looking at a chart, every trader immediately asks where the price could go next. Different indicators are used to identify possible turning points. Fibonacci, MACD, RSI and Moving Average are intended to help determine possible support or resistance zones. Logically, this information can only be calculated from past price trends. From my point of view, a reliable prognosis of a future course course cannot be made from a past course course. This has to do with the fact that a past course in most cases has nothing to do with the future course. Exceptions occur with pullbacks, within an upward and downward movement. The key point is whether the big player is still in position or not. Therefore, any price movement should be viewed as a closed entity, as traders' opinions change at any time. The background for this approach lies in the way big players work. Now let’s take a closer look at that.

First of all, we limit ourselves to the facts. Twelve big players control 85% of the forex market. The winning rate of the most successful big players and high frequency traders is between 90 and 99% and the big players win $ 400 million daily in the EURUSD. The Big Player approach is usually always similar. First you collect a certain number of ask or bid within an equilibrium and then drive the price into your profit zone. For this reason it is crucial to find out what the big players collect in the current course. In 90% of cases, this collective action is carried out via limit orders, using small iceberg orders that are between 10 and 20 lots in size. The price is held within a certain range and driven up and down. Within these price movements, retail traders choose a long or short position. As soon as the price is pushed in the opposite direction, the stops of the retail traders are used to record them with the limit orders. This process can sometimes take hours or days before a decisive breakout triggers the future trend direction.

The big players use 65% limit orders and 35% market orders, while retail traders restrict themselves to market orders. There is no way to get ask or bid in the forex market, so you should always use stock market data. Just looking at the market orders in the future market does not help, since the limit orders determine the long-term market situation.

With a little trick it is also possible to make the limit orders visible in the exchange data. Here we take advantage of a stock exchange law that supports us. The fact is that every market order that appears in the time and sales list must be accepted by a limit order at the same time. This means that every market buy order, simultaneously from a limit sell order and every market sell order, must be taken up simultaneously from a limit buy order. Of course, at the moment we don't know whether a market buy order is a euro buy or a dollar sale. In addition, they do not know whether the limit sell order that has just taken up a market buy order sold the euro or bought the dollar. However, we are initially able to display the limit orders in the chart by simply swapping the colors of ask and bid. I have already written some articles about this, which you can find here

A completely new market view

I use this self-developed limit delta profile to monitor the big player collection.



On the right we see the limit delta profile of the total volume that was recorded within a certain period. On the left we see the limit delta profile with a filtered total volume that was recorded in the same period. I remove the market orders placed by the big players, which are only used to push the price into the stops of retail traders. All that remains then are the market orders that are relevant for a possible collection. With the help of these filter settings, the individual collection actions of Bid and Ask become clearer and clear contours are created.



Here I have shown the corresponding course. In the filtered limit orders, we can see from points A to C that the collective action in the area of limit sell orders led to the price being pushed down again. For the unfiltered limit orders, on the other hand, there was an accumulation of limit sell orders only at point D. It is striking that the points E & F indicate a strong accumulation of limit buy orders. In this area, a big player has collected a large number of questions, so let's look at the entire course of the price and how the price reacted to these zones.



Point A
The limit delta profile created was created from the zone of the two blue lines.

Point B
In the equilibrium at point B, a large number of questions were collected, after which the price was pushed up.

Point C
Here an equilibrium was created again and we can see from our limit delta profile that additional ask has been collected. The course reaction afterwards is clear.

Point D
When the course came to Point D, an equilibrium was created again. Then the course was pushed to Point E.

Point E
Now the course came to the zone where the most ask was collected. Within this equilibrium, further questions were collected and ensured that the course went up.

Point F
Further questions were collected here that were not included in the visible limit delta profile. The course initially went up and was then pushed back into Zone F.

Point G
Ask was also increasingly collected here, after which the course went up again.

The green zones that we see here in the chart are actually not resistance or support zones. It is crucial to recognize what the big players collect within an equilibrium and when they get out of their position. The course of a course is usually always similar, let's first look at different upward movements.



Before a longer upward movement begins, ask is first collected. This ask is recorded via the limit buy orders, which are shown here with green lines.

Point A
Here Ask was collected at different price levels, the price went up.

Point B
Here Ask was bought again massively, which speaks for a further rising price.

Point C
This is where the big players begin to step out of their position. To do this, they need Ask from other market participants who believe that prices will continue to rise. They collect this ask with their limit sell orders and thus come out of their position.

Point D
This is where the big players start buying the dollar via their limit sell orders in order to push the price down again.

We notice that the limit order volume increases within a price trend, we can clearly see this on the left picture. In the lower area there is relatively little volume, which increases with the price. This phenomenon can be explained by the fact that as the price rises, the big players collect more and more ask, which emerges in the form of the larger limit sell orders.

After the accumulation phase, a kind of zigzag run begins. Whenever enough long traders come together, the price is pushed down by the big players and the stops (bid) of the retail traders are recorded with the limit buy orders. The big player needs part of this to get out of his dollar position, which he had to take to push the price down. The remaining ask remains in his portfolio and helps him to increase his profit. When the price is pushed up again, the stops of the short traders help the price to accelerate upwards. The higher the big player drives the course, the more ask is in the big player's portfolio. When exiting the euro, the big player must therefore sell more ask than he previously collected in the first Equilibrium.



When moving down, the same principle is used only in the opposite direction.

Point A
Here bid was collected at different price levels, the price ran down.

Point B
Here again bid was massively bought, which speaks for a further falling price.

Point C
This is where the big players begin to step out of their position. For this they need the bid of the market participants who believe in further falling prices. They collect this bid with their limit buy orders and thus come out of your position.

Point D
Here the big players start buying the euro via their limit buy orders in order to push the price up again.

Of course, the big players are different market participants. When a big player leaves his position, he doesn't necessarily have to open a new position to act in the opposite direction. We recognize that looking at the filtered limit orders gives us a very good indication of the medium-term price movements.



Let's look again at an upward movement that was active from June 12th to 16th.

Point A
The course was in a downward trend. At point A, a large number of questions were collected in a small equilibrium in a relatively short time.

Point 1
I like to call this limit zone a kind of initial spark. After a larger number of limit buy orders were collected, the price increased more. The main reason was to stop short traders and collect this ask with their own limit sell orders.

Point B
We can now see that the course runs again and again through Zone B and a higher number of ask has been collected there. This is an accumulation phase.

Point 2
After completing the collection phase, there is an initial spark that takes the course to a higher level.

Point C
We recognize that the course keeps going through Zone C, collecting an increased amount of ask. Both the short and long traders are misled. This is a re-accumulation phase.

Point 3
After the end of the re-accumulation phase, there is the initial spark again, which drives the course further up.

Point D
After the price rises, we can already see from the limit sell orders that some euro positions are being dissolved.

Point E
In this phase, most big players already exit the euro.

Point 4
First the course runs down a bit and at point 4 there is another initial spark that pushes the course up. The big players use the price increase to get out of their remaining positions.

Point F
The course has now formed a new high and the big player is buying a higher number of ask again. The background is that he is interested in pushing the price higher again in order to buy the dollar for a longer downward movement at this stage.

Point 5
There is another initial spark that drives the course further up.

Point G
The retail traders are now convinced that the price will continue to rise. Even in this increase, massive sell limit orders are being served. The big player allows a new high to be formed, which brings further long traders to the market. Then the big player pushes the price down sharply and begins the distribution phase in the equilibrium. After that the course went down 125 pip.



Here you can see 11 different limit delta representations of my previously described price history. All limit orders are included on the left. Now I have started to filter this limit delta by assuming a minimum number of accumulated lots.

Point A
When the course was pushed up at the beginning, the ask had to be collected very quickly. Therefore, the display is best seen between 9-20 lots.

Point B
In the first accumulation phase, the big player was allowed to take the time to collect the necessary ask. Therefore, the clear representation is best seen between 0-2 lots.

Point C
The re-accumulation phase did not last that long and the big player managed to collect a higher number of ask within a shorter time. The best way to see this is from 3 to 5 lots.

Point D
The exit from the euro position was relatively quick, which can best be seen from 6 to 20 lots.

Point E
The big player took a little longer to buy the dollar, so this can best be seen between 0 to 2 lots.

Depending on the market situation, it is advisable to work with different filter settings in the limit delta profile to get a clear overview. The procedure and the principle are always similar, it is important to know in advance what the big player plans next. As you know, this blog is called: Equilibrium, the key to success. 70% of the price histories consist of an equilibrium. The Equilibrium gives me the greatest chance to immediately see what is happening in the market. The combination of the Limit Delta Profile with the Equilibrium gives us a clear view of the future course. As a scalper, it is essential for me to know in which direction we are headed. In combination with my key candle and Stophunting, this approach is already a clear market advantage.

This approach I have presented is medium-term. This is because the big players first collect ASK or BID at certain price levels and only then act in the corresponding direction. The challenge is to recognize as early as possible whether stophunting will take place afterwards. For this you should keep an eye on the short-term area. As a scalper, I am interested in being able to accurately predict very short-term price movements. I have developed an idea for this over the past few months, which I would now like to present to you. An upward or downward movement begins with an accumulation or distribution phase, where the big player collects a certain number of ASK or BID within an equilibrium. Then the hot phase begins where the big player wants to bring his previously collected orders to profit. The big player now moves the course up or down in zigzag movements. In this hot phase, the big player pays close attention to every market participant that enters the market.

As we know, the big players are constantly on the hunt for the volume of retail traders. Stophunting is the only way to trap the volume of retail traders. Retail traders always enter the market at different price levels, but the stops are very close together. This is due to the market wisdom that a stop should always be above the last high or below the last low. My stop is always a pip or two below my entry, when I am stopped it is because I chose a bad entry time. I have long thought about how I can determine short-term price movements as precisely as possible.

6000 institutional traders lose $ 43 million daily and 900,000 retail traders lose $ 90 million a day in EURUSD. The loss rate for institutional traders is 60%, for retail traders the loss rate is 90%. So it is easier to take money from retail traders than from institutional traders. This is largely due to the fact that institutional traders are increasingly working with iceberg orders. That's why I was looking for a way to make retail traders visible on the chart. In the Future Market Euro FX the minimum bet is 1 lot ($ 125,000), whereby the highest bets can be as much as a few 1000 lots. The weakest link in the chain is clearly the retail traders, who achieve the highest loss rate in the future market and also in the forex market. In order to find out in which direction the market is not going, the identification of the retail positions is crucial.



With a special filter process I managed to make the 1 Lot Retail Trader visible in the chart. I had to implement a few ideas to filter out the big players and institutional traders.

Point A
On the left side you can see my limit delta profile. The green lines show the limit buy orders, the red lines the limit sell orders.

Point B
The red and green areas represent a greater willingness to absorb the limit orders in the heat map. This means that you can immediately see whether a big player has made liquidity available to itself or at which price level greater absorption has taken place.

Point C
Here we see the market buy orders (green) and the market sell orders (red) of retail traders in the amount of 1 lot. Green means that the euro is bought or the dollar is sold, red means that the dollar is bought or the euro is sold.

Point D
Here we see the accumulated market orders from 4 lots that come into the market. In an upward trend, green circles usually appear, showing the absorption of the stops by short traders. The big players record these stops with their limit buy orders. In a downward trend, red circles usually appear, showing the absorption of the stops by long traders. The big players record these stops with their limit sell orders.

Point E
On the right side you can see a filtered time and sales list. The red fields show the market sell orders and the green fields show the market buy orders. The blue arrows show where these market orders are on the chart. The white numbers that have not been marked in color are either single orders larger than 2 lots or cumulative market orders. So that you can get an impression of it, I have recorded a video.



According to my calculation, these color-coded orders should mostly be retail traders' entries and exits. The uncertainty factor is due to the fact that even a big player could accidentally place a single order and the possibility that retail traders can also place a 1 lot order that are contained in the cumulative market orders of the big players. In addition, a retail trader can of course also enter the market via a limit order.



What advantage do we have when we see the entry and exit of retail trades?

Point A
First of all, we are in an equilibrium and we find that an increased number of ask comes into the market through retail traders. The price is pushed down and the long traders are stopped.

Point B
Some short traders collect in the falling price and are stopped immediately in the rising price.

Point C
In the now rising price, a large number of long traders gather again, which are stopped immediately.

Point D
Although the price has dropped somewhat, retail traders still expect the price to continue to rise. The subsequent movement to point E shows that their assessment was not correct.



At points A to E, the price was pushed up or down more. At that time, no retail trader was able to make an investment in the market. The course of the price clearly shows how the subsequent price reacted to the small breakouts.

Conclusion:

With the help of my medium-term and short-term considerations, it is possible to determine the course of the course more precisely. A filtered limit delta profile can be used to determine what is collected within an equilibrium. The positioning of the retail traders shows in the short term how the big players have to react in order to get to the respective stops. The following aspect is frightening. If I, as a small trader, succeed in determining the positions of the retail traders, I am firmly convinced that the big players have significantly better data about when each participant enters or leaves the market. In my opinion, this also explains the exact stophunting that the big players practice every day. Since I started using this strategy, I have been stopped out much less. If you work with this representation for a while, you can see exactly where to get in to take a movement safely. The big players cannot stop out all retail traders; the retail traders who enter the market at the right time survive. You can also immediately see when a large number of retail traders are gathering at a certain price level, so the reaction of the big players is more predictable. This information also helps to find an optimal exit time. I once read in a trading book that it is not the entry that is decisive, but the management of the trade and the exit. I believe that with this presentation I can prove that the start of a trade is also a decisive factor in increasing its profitability. So far, however, there has been no concrete way to recognize where the best time to start is. This could change now.

With this display you can not only see when and where the retail traders get in or out, but you can also see exactly whether the big players are able to stop them. Retail traders are not always stopped immediately, it always depends on the strategy of the big players. It is crucial to look so deeply into the market that you always know what is happening there. It is interesting that I have only been working with stock market data for a year and what I have discovered so far is only the tip of the iceberg. For this reason, I am really looking forward to the future.

At this point I would like to emphasize again that this market assessment is based solely on my opinion and experience. I have no claim that my assessment is correct because the market provides too much uncertainty for it. Basically, it's just about getting a possible market advantage. This market advantage can only be achieved with information that is not available to most market participants.

In my next post, I will show you in more detail how the big players operate to carry out a long-term upward or downward trend. There are interesting insights that can significantly improve your chances of winning.

I wish you a nice weekend and a great start to the new trading week.

Best regards, Michael

Great work Michael!

"I will show you in more detail how the big players operate to carry out a long-term upward or downward trend." Was is time horizon for that "long- term" you are focused?

Viele Grüße, Renko

Time horizon in trading

Hello Renko,

Thank you for your compliment, I am glad that the information in this blog helps you. In recent years I noticed that the time factor in the Forex / Future only plays a subordinate role. This has to do with the fact that the big players carry out their collection of liqidity in an accumulation or distribution phase and are dependent on the volume of retail traders. Only when you have collected a certain number of bid or ask via your limit orders, do you push the price in the corresponding direction. Therefore, their approach is not time-dependent, but more volume-oriented. They use the increased volatility at ECB / FED meetings or the publication of numbers to accelerate their collection campaigns or to push the price in their direction.

For the identification of the medium-term collection campaigns and short-term movement sequences, I therefore work with time-independent charts. This is the quickest way to identify the big player's plans. A decisive advantage is the precise identification of retail traders. Where do they get in, where do they get out and where are they stopped? From this, concrete derivations about a future course of the course can be created. I described that in my last post.

Big player is watching you!

Unfortunately, this is not possible in the Forex market because the decisive volume is not available. Another disadvantage is the fixed time units M1, M5, M15 ... to MN, but this can be avoided with the tick charts. The biggest big players are primarily day traders and try to complete their actions within a day. This does not always work, since their entry and exit is always dependent on the necessary volume of retail traders. Unfortunately, the platform I work with is only able to display cumulative trades of up to one week, which limits my time horizon to the last 7 trading days. As a scalper, however, this is an acceptable framework to work with, especially since most of the big players carry out their main actions in EURUSD within European and American trading hours. I'm interested in what happens in an equilibrium within the limit orders , so one can predict the short-term movements very precisely. As a rule, a big player carries out 3-4 larger actions a week, which is what I focus on.

I wish you a nice weekend

Greetings Michael

Equilibrium, the fastest trend indicator



Hello dear subscribers,


Before we delve deeper into how big players behave within a longer upward or downward movement, I would like to show you an interesting discovery today that has to do with equilibrium. Equilibrium is the key to success, I have followed this approach since I started trading. An equilibrium means balance and at the same time uncertainty in the market. This situation is a decisive factor for a possible turnaround. A rising price must first be stopped in order to initiate a turnaround. This requires an equilibrium beforehand, but you can rarely see that, inside a candle.



In one post I compared the market orders with the accelerator pedal of a vehicle and the limit orders with the brakes. The price moves because the market sell orders run in the limit buy orders and the market buy orders run in the limit sell orders. The big players collect their ask and bid in the form of limit orders (iceberg orders), as these can hardly be identified in the market. Usually this happens within an bigger equilibrium. The market orders are primarily used to trigger the first stops of retail traders in order to supply themselves with volume. Exceptions arise as soon as a big player makes his own volume available. Basically, it is correct that market orders move the market, but we should be aware that market orders are also able to stop the market to a certain extent. Basically it is correct that limit orders can stop the market, but we should be aware that limit orders are also able to move the market. The fact that the big players primarily work with limit orders leads us to the conclusion that the limit orders are significantly stronger than the market orders. I would even go one step further and make the claim that the limit orders are really moving the market and not the market orders. You can find the detailed article here:

Which is stronger, market orders or limit orders?

The identification of liquidity is a major challenge, as the individual algorithms of the big players must first be decrypted and assigned to the cumulative market orders. The individual strength of the respective market and limit orders based on my 4D strength analysis is very helpful. Using algorithms, big players are able to completely remove sell limit orders from the market and at the same time push the price up with market buy orders. With a small number of market buy orders you can move the market significantly. This process is a permanent interplay and the algorithms are programmed exactly on it. It was only in the past few months that I became aware of how extremely complex these algorithms are programmed. This process is very efficient and you can find an example of this procedure here:

The interplay of algo




Within a price, an equilibrium can be identified quickly (point A), but I am mainly interested in the turning points in the course of the course (blue arrows point B). These turning points have no previous, identifiable equilibrium in price and suddenly arise unpredictably. With my key candle from the Forex market these turning points can be localized roughly, but as a scalper I need more specific information. The fastest trading information is provided by the stock market data with the DoM, the Times and Sales list and the heat map. However, this requires a correct filter setting and the crucial information. In the past few weeks I have made an interesting discovery that I would like to introduce to you today.



On the left you can see the Times and Sales list on the right my DoM, which I have modified a little.

Point A
Here we see the market sell orders (point C) that run into the limit buy orders. The number 24, after each trade, shows the number of limit buy orders still available in the DoM (point B).

Point D
Here we see the market buy orders (point F) that run into the limit sell orders. The number 14, after each trade, indicates the number of limit sell orders still available in the DoM (Point E). At Point G you can see the change in sizes, they are an indicator of the limit orders still available on the sell and buy side. With a special filter setting, iceberg orders can also be identified. Depending on the currency pair, there are different sizes that differ in their number. The sizes shown here refer to the Euro FX, which I have used as the basis for identifying an equilibrium.



In the first step, I assigned certain filter settings to the sizes of Best Bid / best Ask. In the Times and Sales list, the red color shows a strength in the bid area, while the green color shows a strength in the ask area. As soon as an equilibrium is created within these sizes, no color is drawn and a black field is created. Since the Times and Sales list runs very quickly, I used a 15 second chart. The yellow dots each show an equilibrium in the Times and Sales list. At Point A we see a strong equilibrium that has started a major upward trend.



A good hour later a very distinctive equilibrium emerged that could be clearly seen in the Times and Sales list. That was the beginning of a major downward trend.



Here, too, we see a stronger equilibrium on the high, which has initiated a subsequent downward trend. This downward movement was already announced in the Times and Sales list. You can see it because the bid side has already become significantly stronger in the last upward movement.


Conclusion:

At first, my discovery of generating equilibrium from the sizes seems to be the quickest way to more reliably identify trend reversals. Here, however, I will have to work with different filter settings in the next few weeks to derive more specific information. Of course, there are also errors here that I still have to filter out. First of all, it is crucial to identify the accumulation or distribution in order to recognize what the big players have previously collected. This information indicates the medium-term trend direction. After leaving the equilibrium of the collecting phase, the big player drives the course up or down in zigzag lines. We will talk about this more specifically in the next few weeks. With the help of my key candle from the Forex market, I am able to determine the approximate zone of the reversal points. The equilibrium in the sizes ultimately gives me the information as to whether the key candles I have drawn actually initiate a turnaround. It is important to recognize when a big player gets out of his main position. We will talk more about this in the next few weeks. It should be noted that an equilibrium always takes place before a trend reversal. This has to do with the fact that a course must come to a standstill before it can run in the opposite direction. A car that drives forward can only drive backwards if it comes to a standstill (equilibrium) beforehand. This is a natural law that also applies to the stock market. However, one is unable to identify an equilibrium in the candles within the zigzag movements. For that you have to look a little deeper into the candles and you can only do that with the sizes in the Times and Sales list. Of course I will keep you up to date on the further results.

I wish you all a nice Sunday and a great start to the new trading week


Best regards Michael

Currency exchange in the speculative market


Hello dear subscribers,


The foreign exchange market (Forex) is a submarket of the financial market where foreign exchange supply and demand meet and are exchanged at the negotiated exchange rate. Market participants in the foreign exchange market are credit institutions, central banks, the state and large companies in the non-banking sector. Small and medium-sized companies as well as private households have to turn to credit institutions for their foreign exchange transactions. Trading objects on the foreign exchange market are foreign exchange, i.e. book money in foreign currency. The foreign exchange market is the world's largest financial market, with global daily sales of approximately $ 6.6 trillion in 2019. The internationally used reserve currencies US dollar, euro, Japanese yen and British pound as well as the regional currency Australian dollar are the most traded. The EURUSD is the most traded currency pair, with a daily volume of over $ 2 trillion.

The foreign Exchange market enables the exchange of domestic money into foreign and vice versa, thereby converting purchasing power from the domestic currency into the foreign currency. Trading does not take place centrally via a stock exchange, but mostly directly between financial institutions via corresponding dealer networks. Companies, brokers and private speculators are also increasing among the participants. The trading medium is primarily online trading via trading platforms such as the electronic broker EBS and telephone trading. The foreign exchange market is institutionalized through foreign exchange trading. In the narrower sense, this means the interbank market in the context of customer business and proprietary trading. Internationally active credit institutions trade here in the form of standardized foreign exchange transactions based on recognized trading practices with the foreign exchange object. Foreign exchange transactions in turn consist of the basic forms of spot exchange or forward exchange transactions as well as the derived (derivative) currency swap transactions and currency option transactions.

The Forex market is not only used for speculation or proprietary trading, but also for currency Exchange. A common foreign exchange transaction in the private customer business is the foreign transfer to a country with a foreign currency. There is occasionally a need to hedge larger foreign currency liabilities, e.g. B. to maintain a holiday home in a country with a foreign currency or for cross-border commuters who live abroad. Furthermore, the foreign Exchange business for private investors also plays a role as part of the securities business. Larger companies pay their employees their salary once a month, which often means changing currencies.



Especially at the end of a month, the currency Exchange that does not serve speculation increases enormously. In the chart of the Euro FX we see an increased volume of larger orders within 5 trading days (June 26th - July 2nd). The green fields, show a dollar Exchange in euros and the red fields a euro Exchange in dollars. These investments are carried out by larger banks for their large customers. This approach makes it difficult to get a clear picture of the market. As a rule, you can use the limit orders to identify what a big player collects within an equilibrium (accumulation / distribution). If a larger market participant collects Ask, for his speculation, he has to get out of his position with a bid at some point. A currency Exchange, on the other hand, gives us incorrect information. If there is now a big Dollar Exchange in euros on a high, it looks as if a larger market participant is collecting the euro (point A). This could lead some traders to take a long position, which in this case means a loss. If the bank buys this Ask through a limit sell order, it will transfer the euro to the customer's account. He pays the salaries to his employees. Although Ask was bought (dollars exchanged for euros), the position is now finished and you wait in vain for an exit (bid).

As a speculator, I have found a solution that could possibly help you.

Basically, at the end and beginning of a month, you can see that massive currencies are being exchanged. This exchange takes place almost exclusively in high volume phases. With the heat map you can analyze the larger orders more precisely and display them in the chart. Big players often have the habit of placing larger orders of 100 lots or more in the market one after the other. Market orders are sometimes used to process the transaction immediately. Basically, it is difficult to distinguish between a currency exchange and a speculative transaction, but the likelihood of a larger currency exchange is highest between the individual months. That is why one should carry out a more precise analysis especially in these times. In order to facilitate the relationship between supply and demand, I would consider the large orders rather neutral at this time. You can do this by filtering out the larger orders. Of course, you will also filter out speculative orders, but the number of neutral orders is significantly higher during this time. This increases the probability of getting a better overview. If I see several 100 lot orders in the heat map that come in one after the other, I ignore them. That saved me some losses in the past. Therefore, we should act a little more carefully at the end and beginning of a month.

I wish you a successful trading day

Greetings Michael

Analysis for the EURUSD



Hello dear subscribers,


Over 1 million retail traders trade in EURUSD every day, creating 1 million different opinions about the future course of the price. At the end of the day, 50,000 retail traders will have been right, while the remaining 950,000 traders are hoping for a new opportunity. Most of them start with an analysis before trading, taking into account the long-term, medium-term and short-term price trend.

Basically, an analysis can only be made from a past course, but in most cases the future course has nothing to do with the past course, since it has already ended. The vast majority of big players, who control 85% of the forex market, are day traders and try to close their positions within a day, high frequency traders are often only in the market for a few minutes. We find long-term major traders among institutional traders who manage funds or hedge themselves through the market. However, their odds of winning are significantly lower than those of the big players or high-frequency traders.

Our chart consists of 99.9% from the past and 0.1% from the present. The present is the current candle that is currently developing. The past course of the course is always a typical chaos in which we want to put an understandable order. Now indicators, horizontal and vertical lines, resistance and support zones are used to predict a possible price trend. This makes the big players happy, because they produce artificial resistance zones every day to take the money from retail traders.

The market would be much easier if there were only speculators, but billions of dollars are being brought into the market every day that are only intended for currency exchange. In principle, this currency exchange is a neutral trade and should only be viewed as an exit from a currency. However, this currency exchange also appears in the order book and often falsifies the view of supply and demand. Since many trading actions are not always profit-oriented, this procedure makes it difficult to have a clear view of the markets.



On Thursday July 3, 2020 the price went down (point A to point B). Then a larger equilibrium began for 30 hours. On Friday July 4, 2020 volatility was significantly lower since the United States had a public holiday. Nevertheless, a big player had an excellent strategy, which he also successfully implemented. This successful strategy took place in the Point C area in the afternoon.



The decisive upward movement started at 2:00 p.m. after a strong pullback. The M1 upward movement reached 28 pip in 168 minutes. That's an average of 0.16 pip per minute. The M1 normally reaches an average of 1.54 pip per minute. A complete report on the achievable pip / minute within the different time units can be found here:

Increase our hourly dare?

On Friday, volatility was around ten times lower than the average. At Point C, over 1100 lot market buy orders were absorbed by a big player within 10 minutes (16:57 - 17:07 CET), without most people noticing. This approach was a special masterpiece, so I would like to go into more detail today. First of all, it is noticeable that the volatility has increased significantly from point B, but the massive absorption could not be seen from the pure candles. The stock exchange data is crucial for this, which we now take a closer look at.



Around 4:30 p.m. (Point A), the price was pushed down massively, absorbing the long trader's stops. From point B, the price was pushed up and formed a new high. Now a small equilibrium emerged and at Point C suddenly massive buyers came into the market, whose market buy orders were absorbed by the big player. The red circles represent the size of the accumulated limit sell orders. It is noticeable that the big player absorbed around 65 lots per action.



Let's switch to the M1 for a better overview and look at a footprint chart. As we can see, the price went up slowly within the strong absorption and almost all market buy orders were absorbed. The white numbers above the respective candles show the number of market buy orders absorbed per minute. 1132 solder were absorbed in 10 minutes and the price continued to rise. This action was a special achievement, because if a big player absorbs too much, the buyers would suddenly jump off and the price would come to a standstill. This happened briefly at Point A, so the big player had to push the course up again. From the course of the price, you can clearly see that less stops were absorbed by short traders, but more the ask, from new buyers. Stops are usually absorbed, here buyers are absorbed. We'll take a closer look at how the big player did it.



The principle of the big players to start an upward or downward movement is in procedure always similar. At Point A we see the end of a little equilibrium. The price is pushed down and the long trader's stops are absorbed. From point B, the big player first pushes the course up. At Point C, a small equilibrium is created, where the big player collects a large number of ask. Now the price is pushed up strongly and at Point D there is a first partial exit from the euro. This has to do with the fact that a big player accumulates a higher number of ask when he pushes the price up. He tries to avoid this by using the algorithms to control his limit sell orders in order to get through with as little ask as possible, but that doesn't always work. I have described this strategy in more detail here:

The interplay of algo

In the following pullback (to point D) the euro is collected again and the course to point E is pushed up. This is where the big player gets out with his remaining position. Since there are no other buyers on the market, a small pullback to Point F is created. After that, the big player pushes the price upwards and ensures that a new high is formed. This brings buyers back to the market. The big player starts absorbing these market buy oders with his sell limit orders to buy the dollar. Then the course is pushed down. The stops of the long traders' create a chain reaction, which means the price goes down faster.



Now let's look at the situation of Friday's upward movement. At Point A around 2 p.m., a larger number of ask was absorbed and the course pushed up. This upward movement was very slow and sustainable as there was less volatility. At Point B there was a small exit from the euro and at Point C the big player got out of the euro entirely. Now the big player pushed the price down sharply, absorbed the long trader's stops and then pushed the price to a new high. This increased the volatility and suddenly massive buyers came into the market, who now hoped for a strong breakout. The hoped-for outbreak did not come because the big player collected all available ask. 1132 Lot Ask were absorbed within 10 minutes (Point D).

The next thing that amazed me was the even absorption of Ask (Point E). These patterns are typical of a currency exchange. A major bank may have helped a key customer push the euro up so that he would have an advantage at Point D when he exchanged the euro for the dollar. If the customer had exchanged their euros at 1.12200, they would have received almost $ 350,000 less than at 1.12450. It is also conceivable that the customer already invested part of his money at 1.12200 and thereby realized an even higher profit. After all, this was an amount of $ 141 million. Currency exchange fees are very lucrative for the bank.

There is also a second option. Due to the low volatility, the upward movement dragged on over 3 hours. During this time, the big player had to buy new ask again and again in order to push the price further up. He tried to get out of his position at point B and C, but failed due to the low volatility. After forming a new high via Point C, he now used the new buyers to get out of his euro position completely.

The third possibility is that the big player at Point B and C has completely left his position and used the situation at Point D to buy the dollar massively.

Let us now analyze these three options with a view to a future course.

1st possibility
If a big player helps a key customer realize a better price to exchange for a dollar, it would be embarrassing if the price went up massively on Monday. The customer might have to do this currency exchange on Friday to pay salaries. If the bank had previously bought a large number of ask in the EURUSD (accumulation phase), it would have informed the customer that he should wait another day or two as the euro could still rise significantly. Instead, this exchange was carried out at Point D. The bank may have assumed that this is the best price for the customer. That would be an indication of a falling euro.

2nd possibility
If Point D was a kind of panic sale of the big player in order to get out of its euro position, it means that the big player does not believe in further, rising prices at this time. First of all, this speaks for a possible equilibrium, since there is no longer a major position in the market. The decisive factor here is what happens within the equilibrium on Monday and Tuesday.

3rd possibility
If the big player has used the situation at Point D to buy the dollar massively, this is a clear indication of future, falling prices. In order to eliminate possible short traders, however, a strong breakout upwards could occur beforehand.



Let us now go into the long-term analysis. I used a daily chart from the past three years for this. At the beginning of 2018 the high was reached at 1.255 and the price slowly went down in the following two years. The goal was the strong gap of 180 pip that formed in April 2017. I already pointed this out in September 2019.

EURUSD where is the journey going?

Key candles in Stophunting

First, the gap at point B was closed in half and the price was pushed upwards again. This was because there were too many short traders in the market at the time who believed that the gap was now closing. You can find the report here:

How to follow big players with Forex data.

The course always came again in the area of the gap and was rejected there. From point D it went up again strongly. The gap appears to be a strong zone, where a large number of buyers are entering the market. Point B may have reached the lowest low for the coming years. If strong buyers continue to enter the market, zone 1.10400 would be a strong buyer zone for me, which could push the price higher. At 1.17300 there is still a strong resistance zone, where in the past, a massive number of sellers enter the market. At the latest there, the sellers could become very active again.



Now we are reducing the daily chart and looking at the last four months. At Point A we see how motivated the buyers reacted to the gap. Then the course went to Point B to curtail the long-term short traders in their profits. Point C was initially not a strong zone that pushed the price higher. Point D&E could push the course again to Point F. From today's perspective, this would be a zone from which the course could run towards 1.17300. However, this depends heavily on how the big players react to retail traders. And unfortunately you can never predict that.



Let us now look at the last two trading days with the exchange data. From point A, the rate went down to point B. According to my limit profile, the dollar was bought massively there. There was a breakout to Point C after that the course went down. At Point D the dollar was bought again massively, there was a strong breakout to Point E again and the price went down. From point F an equilibrium was created. At Point G & H a massive number of bids were bought again. There could possibly be a breakout again. The next resistance zone (Point J) could put the price at 1.10400.



Here we see the same chart again in the Forex M5. Since my stock market chart is a cumulative view of the orders, the price trend is somewhat distorted. However, the highs and lows are the same. I have now drawn the zones with red squares where massive bid was bought. There is no way to see this information in the Forex Chart. This is a major disadvantage when working exclusively with Forex data. In addition to using stock market data, I recommend every trader to say goodbye to the candles in the long term because they give us a wrong picture of the market. I have written an interesting article that I recommend you read:

Why candles don't work properly in retail

The Forex market is Formula 1, here you can find the best traders in the world, the big players and the high frequency traders. Every trader who makes his trading decisions exclusively from the Forex candles has a big disadvantage, because he does not know what is happening in the market. He competes with the best Formula 1 racing cars with a sport kart, so to speak. We can see how this works from the loss rates that every broker publishes. We retail traders do not have the capital of big players, but we have the opportunity to work with the same technology. Now let's take a look at which charts these professionals work with.



Of course, we also see some candle charts and volume profiles in the video, but they don't work time-based. This is only a rough price overview, indicators or resistance zones are not used. The decisive charts show the DoM and the time and sales list because they convey the fastest information in the market. This information is accessible to everyone today and inexpensive. If you want to work professionally, you should orientate yourself to the professionals. Working with the DoMand the time and sales list is a big change, but it's just a matter of time and training. I myself could learn that within a year. If a forex candle chart brings more benefits than the DoM and the time and sales list, all big players would work with it. We should be wondering why they don't do it?

Conclusion:

By the larger traders, the long-term, institutional traders achieve a profit rate of 60%. The largest day traders (big players) achieve a win rate of around 80-90% and the largest high-frequency traders achieve up to 99%. The longer the time frame in which a price forecast is made, the more this forecast depends on chance. The smaller this time frame, the more precisely you can determine course trends in advance. However, this is only possible with stock exchange data, provided you are able to see what the big players are currently collecting. That is one of the reasons why I am a scalper in the market. It is therefore completely irrelevant whether my long-term price forecast comes true or not. The big players are always orientated on the herd (1 million retail traders) and have to base their strategies on them. Unfortunately, you can never know beforehand how 1 million traders will react tomorrow. This is where the stock market data help us.

I get the fastest information with the heat map, the DoM and the time and sales list. I am currently working on the equilibrium that is created within the time and sales list. This information is very precise and gives me concrete information about the current course within seconds. We'll talk about that in the next few weeks. Incidentally, this is exactly the procedure of the high-frequency traders, who, however, have more specific information available for this. The more precise information you have, the better you are able to react to current market situations. The stock market is all about information advantages, the faster you have it in front of other market participants, the more effectively you can trade. It has been proven that traders who work with stock market data have three times the success rate of a forex trader. I recommend reading the following articles:

Forex versus future

Combine Forex and Future data!


The future cannot be predicted in the stock market, but with filtered stock market data, one can react faster to the actions of the big players. It is not crucial to be faster than the big player, it is enough to be faster than most retail traders. I think that's an important point to think about.

I wish you a nice weekend and a great start to trading on Monday.

Greetings Michael

Two effective trades within 4 minutes



Hello dear subscribers,


Exactly a week ago I submitted an analysis on the EURUSD. My guess that the larger bid orders on Friday, seven days ago, were a currency exchance turned out to be correct, since the price then went up sharply.

Analysis for the EURUSD




Basically, the EURUSD has been moving back and forth in great balance for the past five days. On Thursday (Point A) he finally reached my marked resistance zone and was turned down. The day before yesterday, an equilibrium formed at Point B on Friday, where a large number of dollars was bought. We will see in the next few weeks whether that is enough to bring the price back to 1.10400. Should the price go down again, this zone would be an area where stronger buyers could enter the market again. As I mentioned earlier, long-term price forecasts are very speculative, as the big players always have to react to the retail traders at very short notice.

The big players dominate the market, but if there is a large number of short traders entering the market in a downward trend, the big players have to react. Iceberg orders (limit buy orders) initially intercept a large number of market sell orders from retail traders in order to hold the price down. This absorption usually takes place at several price levels so that it is not noticeable. While the price went down, the big player also filled the limit sell order levels with iceberg orders. As soon as the price does not get further down, the algorithms delete the limit sell orders that have been used and at the same time market buy orders are shot into the market. The big player thus manages to move the market strongly upwards with relatively few market buy orders. That also makes sense, since the big player is short orientated and needs as little ask as possible at this time. As a result, the market literally jumps up and the first stops of the short traders trigger another chain reaction that pushes the price further up. This action will stop short-term and medium-term traders and limit long-term traders in their profits. It is very beneficial for the big player that most traders pull their stops to secure their profits. After a longer downward trend, more and more stops are accumulating in the same price region. The big player only has to stop out the traders, after which he can push the course further down. If despite this action further short traders come into the market, the big player will simply sell his complete short positions to the retail traders, and then push the price up in the longer term. This action occurred between February 20 and 24 in EURUSD, when most of the retail traders were convinced that the open gap (180 pip from April 2017) will be closed. You can find the complete report here:

Strong Buy Limits on Thursday

As promised, we will speak more specifically about the course of an upward and downward movement in the next few weeks. It is very brutal how the big players do this. But if you know these strategies, you can quickly double your odds.



The last trading day on Friday was initially an average trading day. From the open the course ran 30 pip down and was pushed up from the London open, 70 pip. At 5:00 p.m. the price then went down 30 pip. At Point A we can see that a larger accumulation of Ask has pushed the price up. For me that was the reason to look for long trades within the line from Point B. Around noon some equilibrium emerged within the upward trend. At Point C, we see a larger player buying a large number of dollars and the price is now going down. It was a good opportunity to search for short trades within the line (Point D). Then I waited because I didn't know exactly when the course would go up again. It was striking that a high number of Ask was bought at the Point E price level. As a large number of buyers came into the market in this zone, this area was a strong resistance zone for me. I wait until the price broke through this zone and was able to look around the line (Point F) for long trades. At Point G, a high number of Ask was acquired again at one price level. The course went up and I realized that a big player at Point H was getting out of the euro. The zone at point G was a stronger resistance zone, but I assumed that the high should be reached soon. At the end of the day, I wanted to close an interesting trade. This eventually resulted in two trades at Point I, which we will talk about in more detail shortly. At Point J came the confirmation that the price would now go down. As a major big player had left his euro position, I also ended my trading day from Point J.



In my limit delta chart you can understand the process again in more detail. At Point A you can see how a big player gets out of the dollar and collects a higher number of ask around 9:00 a.m. and pushes the price up. At Point C & D there was already a major exit from the euro and Point D shows a dollar purchase. the euro was bought stronger as the price went down. at Point E there was a small fake breakout down to switch off the long traders, then the price was pushed up. At Point F, I saw the big player buy Ask again to push the price up. The dollar was finally bought at Point G and the price was pushed down. At Point H we can see a larger limit delta in the area of the bid, which could be an indication of a further falling price. But let's wait and see how the Asian market will react on Sunday / Monday.



Here we see my last two trades on Friday night. I was able to identify the resistance zone (point A) in the future market as well as in the forex market with the help of my key candle. The blue candle at point B was my first trade. I ended this trade after 93 seconds because I had drawn a resistance zone at Point C and I didn't know how far the price would go back. Finally, I opened another trade at Point D, which I ended in my resistance zone (Point E) after 156 seconds. At Point F the high of the day was finally reached. The winnings are shown in euros, converted to dollar = $ 360 and $ 500.



With the stock market data you can of course look far deeper into the market. Here we see a cumulative chart view, the red circles show the stops of the short traders, the green circles the stops of the long traders.

Point A
First of all, we see that with limit buy orders, a high number of ask was collected and then the price went up sharply. That's why I marked a strong buy zone there.

Point B
We recognize that the short traders' stops were used to buy the dollar. First the price was pushed down and came back to motivate the long traders to continue buying. Then the course was pushed into my buying zone (Point A). First I wait for the price to go up a little and got into the first trade at Point D. I was also able to identify a resistance zone at Point E with the stock exchange data. The risk of having to surrender all profits was too high for me, which is why I got out of my first trade at Point E. At Point F I finally made my second trade, which ended after 153 seconds. The chart we see here was a rough overview for me, but the final decision was made based on the information from my DoM.



Point A
In my main screen at Point A you can see the stops of the short and long traders. In addition, I need the vertical and horizontal limit delta.

Point B
Here we see, in the H1 chart, a filtered, cumulative limit delta. So I can immediately see what the big players collect with their limit orders.

Point C
Usually a footprint chart does not help in retail, but I have hidden the imbalances in this footprint chart, this helps me to identify the equilibrium. The indicator below shows the strength of bid and Ask in the DoM.

Point D
Usually my Forex Chart is much smaller in the main screen, I have enlarged it for a better overview.

Point E
Here we see my time and sales list, which I have filtered so that I can see the equilibrium relevant to me within the sizes. We will soon see how important this equilibrium is.

Point F
A few months ago I developed an interesting filter setting in the DoM. I calculated the strength of the market orders from the data of the limit orders. The stronger the respective bar, the stronger the subsequent price movement. The ad responds to the sizes and not to the ticks. In principle, the display shows the penetration of the respective limit orders. It is therefore the fastest way to identify future price movements without the need for a price movement beforehand. This filter setting reacts incredibly quickly, you can see that later in my video with the Forex data.

Point G
With this time and sales list, I use a special filter to identify the strength of the limit buy orders. The lighter the color, the stronger the limit buy orders.

Point H
In this time and sales list, I use a special filter to identify the strength of the limit sell orders. The lighter the color, the stronger the limit sell orders.

Point I
I have optimized this display in the DoM in the past few months. The right yellow bar shows the strength of the market buy orders, the left yellow bar shows the strength of the market sell orders. With the help of time filtering, I managed to graphically show the strength and change of the respective limit orders (red and green). On the left side we see the completed limit buy orders in the H1, on the left the waiting limit buy orders in the DoM. On the right side we see the completed limit sell orders in the H1, on the right next to it the waiting limit sell orders in the DoM. This representation is responsible for my entry and exit.

This chart was taken a second before my first trade. In the blue box we can see that the limit sell orders are being withdrawn by the big player so that he is able to push the price up with a small number of market buy orders. You can find a detailed report here:

The interplay of algo

At the same time, the strength of the market buy orders increases. In the video you can hear with my sounds (Bid / Ask) how a machine gun volley is fired by Ask. That was the ideal start for me. From this entry, the price was 0.1 pip against me, so it reached 10% of my stop zone.



Here we see the chart just before I exit the first trade. In the time and sales list at Point A we see that there are some equilibrium in the area of the sizes, which shows great uncertainty. At Point B we see that the market sell orders are gaining strength. Point C shows a major obstacle in the area of limit sell orders, while limit buy orders clear the way down. I knew from my chart that there was a larger resistance zone in this area, and I couldn't estimate how far the price would go back down, so the trade ended after 93 seconds.



Here we see the chart 1 second before entering my second trade. First of all, the course went back a bit and in the time and sales list at Point A we see that the equilibrium has disappeared. There is no longer any uncertainty in the market. In the DoM (point B) we can see that the strength of the market buy orders increases. In the blue box at point C we can see again that the big player is withdrawing his limit sell orders in order to let his market buy orders through. Stronger limit buy orders are added to secure the price downwards (point D). A machine gun volley of tones sets the Ask in motion, which was an ideal start for me. This time the course was 0.2 pip against me, so it reached 20% of my stop zone.



The price has now increased more, here we see the chart 1 second before I exit. At Point A, we can see that the strength of the market buy orders is very high, but this brand buy orders no longer advance because they are intercepted by the limit sell orders (Point B). We recognize that the strength of limit sell orders is increasing (point C). At the same time, the limit buy orders open to let the price go down (Point D). In my filtered footprint chart at Point E you can see that an equilibrium is being created. At Point F we also see that the big player in DoM places a large number of limit sell orders on the market in order to intercept a rising price. That was an optimal exit point for me. After that, the price actually went down more. With the information you received, you can now watch the video about the two trades. Pay attention to the different tones of Best Bid and Best Ask.



30 minutes before my 1st trade, I already knew where my entry point was, so I had enough time to prepare a corresponding chart to analyze the trade afterwards. I couldn't have known beforehand that this would become two trades. In retrospect, however, that's a stroke of luck, because you can see what precession you can work with. Of course, that doesn't always work so well, but that's exactly my daily goal. As soon as I am in the trade, the breakout should take place without the price going against me.



Now let's take a closer look at the analysis of these two trades.

Trade No.1
$ 360 was won with 3.6 pip. The spread is usually 0.5 pip, in this case it was slightly higher at 0.9 pip. Less a 20 percent discount, the broker earned a total of $ 72. My overall risk was $ 172. The risk / reward ratio was 1: 3.6, but you should add the brokerage costs. This effectively results in a risk-reward ratio of 1: 2. In the M1, the EURUSD averages reached 1.5 pip per minute. With my first trade, I was able to exceed this average by 53%.

Trade No.2
$ 500 was won with 5 pip. In this case, the spread was 0.8 pip minus a 20 percent discount, the broker earned a total of $ 64. My overall risk was $ 164. The risk / reward ratio was 1: 5, included broker costs 1: 3! With my second trade I was able to exceed the pip average in the M1 by 26%.

For me, as a scalper, this pip per minute value is a decisive factor. The second trade brought in $ 140 more than the first trade, but I was almost twice as long in the market. So the risk of the second trade was significantly higher than the first trade. While the first trade reached 2.3 pip per minute, I only managed 1.9 pip per minute with the second trade. This made the first trade 20% more effective. Of course, I could have saved $ 64 in additional brokerage costs by not exit the first trade. However, I didn't know how far the pullback would go. I focus more on the pip per minute. As a scalper I want to get in and out as quickly as possible, the costs play a subordinate role. It's basically just about catching the small breakouts within an M1 candle. Out of 1440 M1 candles that are created every day, there are about 500 candles that are interesting for me. Using my filter setting in the DoM and the time and sales list, it is much easier to reach these M1 breakout candles. With very small stops and a win rate of 80% you have significantly more costs than the average trader, but at the same time 500 chances per day. If you choose the best opportunities, it increases the probability of winning. This would not be possible with the pure Forex data, so the stock market data is an absolute must.

In addition, there is a very high expenditure of time to optimize the individual filter settings on a daily basis. However, this is relatively easy to do, since 20-30 trades only take about 30 minutes a day to trade. So I can use the rest of the time wisely to optimize my filter settings. Since I can hear the market using my tones, I immediately recognize when there is movement in the market. Since I have already drawn the resistance zones beforehand, I can therefore decide relatively quickly whether the upcoming trade is worthwhile or not.

Of course I am a trader with all human weaknesses, I sometimes expand my stop because I believe that the price is turning again. I get out of the trade too early due to caution and often don't get into the trade, although my gut feeling tells me something different. My fear is greater than greed, which has often saved me from harm. I lose and I win and sometimes there are revenge trades. We traders are human and cannot always control our emotions. I also don't always trade with 10 lots and often my profits are lower. I prefer a comprehensible loss to a random gain. I have to understand why a loss or profit has arisen, because only then can I build on it in the future to minimize the losses and increase the profits. A loss hurts, but you can learn more from it than from a profit. You had previously expected the profit, a loss comes unexpectedly. So I analyze my losses more closely than the profits. In the next projects I will also show some losses, to show what mistakes I have made. My trading direction is based on the strategy of securing my profits rather than taking unnecessary risk to make millions. The greater the number of lots invested, the sooner the market will notice you.

In the future market you are already noticed with 5 lots, since the Forex market is 100 times larger, you are noticed with 500 lots. However, the fewest lots actually end up in the forex market, the most only in the broker's own virtual market (exception: ECN broker). The main customers of the broker are smaller retail traders who trade under 1 lot, which is why the traders attract attention with 5 lots. In order to deprive brokers of the chance to manipulate prices, one should work with virtual stops that the broker cannot see. As long as you act under the radar of the big players or brokers and do not place your stops where the masses place their stops, you can inconspicuously realize your smaller profits. Either you are so small that you don't attract attention, or you have billions of dollars to move the market. Both situations are optimal. It becomes problematic when you are right in between. The smaller institutional traders notice this in particular.

It's like the celebrities or the rich, either you are prominent / rich or completely unknown. It is only problematic for those who are in between. I am glad that I am one of the small traders, because if you do not attract attention, you can realize your profits in peace and have a good chance of keeping them long-term. It is not my goal to make millions from trading, just an above average living. And whoever does this has already achieved more than the remaining 98% of all traders. Of course there are exceptional traders who make millions, there are also people who win $ 1 billion in Powerball. But it would be stupid to use it as a guide. There is no big player today who started out as a small retail trader. The big players have not earned their own money, but are using their bank's liquidity to move the market. Of course, you have to be professional to stay successful. We smaller traders have to build our own money, how are we going to do it if even the big players have not done it in the past? The stock market is an illusory world, and the more the stock market lobby makes it clear to retail traders that it is easy to make millions, the more big players can benefit from it. Every day, over 900,000 traders lose money in EURUSD and still carry on, which shows how great the hope is. After all, tomorrow you could be one of the winners.

I don't mean to say that it is impossible to be successful, it is just a damn hard way. With the general knowledge of candles, indicators and forex data, the probability of winning is almost entirely dependent on luck. The goal should be to realize the probability of winning through data from the stock market. Then trading becomes a predictable factor that enables long-term income. To do this, you have to be prepared to put previous knowledge on hold and acquire new knowledge. Unfortunately, it's not that easy. The brain is like a water glass in which a certain knowledge about trading is stored. In order to embark on a new path, you have to be ready to pour out this water glass and then fill it with new knowledge. But that takes a lot of courage. Although many traders lose on a daily basis, they see their knowledge as a kind of safety that they are never ready to give up. After all, it took them years to store this knowledge. With over 90% of traders losing, 90% of the published trading knowledge seems to be wrong.

Let us assume that our incorrectly acquired knowledge is a blue liquid in a water glass. If we now pour out half of the blue liquid and fill it up with pure water, the liquid will still be blue. Only when we pour out the entire glass and then fill it with pure water will the water in the glass be transparent in the end. The greatest art in trading is figuring out where to find pure water (knowledge). That's why I spend so much time advancing my knowledge. As a scalper, I can take this time more easily. My knowledge is not pure water either, but I work 12-14 hours a day to get rid of the rest of the blue color. I am aware that this will be a life's work. Two quotes from two extraordinary people can give us strength.

I didn't fail - I discovered 10,000 ways that didn't work. Thomas Alva Edison

There are more people who give up than those who fail. Henry Ford


I sincerely wish you that you have the strength to hold out, success will come sooner or later.


Greetings Michael

True Lies


Hello dear subscribers,


At first glance, trading appears to be very simple, you open an account with any broker, download the MT4 and you're good to go. As a beginner, you first have to get used to the MT4, that alone takes a lot of time. As soon as you have mastered the MT4 to some extent, the endless search for the Holy Grail begins in the form of free indicators. As soon as you have found a promising indicator, it is downloaded and the test phase begins. The settings of the indicator are continuously optimized until it is finally determined that this indicator does not meet the high expectations. Then you find a new indicator and the game starts over. The best indicators stay on the chart until one day the chart is completely overloaded. After a few years, you find that most of the indicators are useless and you just start to focus on the candles. As a result, the profits do not increase and the losses remain the same. This is also logical, since a candle is only the effect, the cause lies in the different market orders, that run in the limit orders. And that is exactly what we cannot see in the Forex market.

Finally, one tries to find EA's that automatically realize profits. You buy trading books, chargeable indicators and maybe look for the right trading coach. At the end of the day, you will resign and give up trading.Trading is basically like a profession. In order to practice a profession, you have to learn as an apprentice for at least 3 years. This includes practice and theory, you also have to spend time preparing for tests and exams. In 3 years, about 7500 hours add up. Once you have passed the exam, the learning really starts. After another 4 years you have the opportunity to attend the master school and after 10 years you have achieved your master title. A doctor, lawyer or notary also takes about 7-10 years to earn above average. In these 7-10 years you have to be willing to invest time and money to achieve the goal. That is about 20-25,000 hours of effort to then be able to professionally pursue a profession. Unfortunately, that's no different in trading, even if brokers and trading coaches try to convince us otherwise. A trading-coach sit in the Lamborghini, wave with a bundle of banknotes and promise the beginners the blue of the sky. Many believe that if a trading coach has so much money, it must be a good trader. Unfortunately, the opposite is the case, because most coaches did not achieve their wealth through trading, but through the sale of their seminars.

On the stock exchange, 95% lose their money and only 5% fail to lose money. However, this does not mean that the 5% can make a living from their profits. Only about 2% of all traders actually manage that. The situation is no different for the trading coaches. In my opinion, only about 2-5% of all coaches work seriously.
I would immediately delete any trading coach who shows off his sports car, his property or a bundle of money slips from my list. I would also be careful if someone promises that you will trade successfully after their seminar. This is definitely a lie. The only thing a trading coach can do for you is to save you time in the long term and that's all. Imagine you want to lose weight, exercise or quit smoking. To achieve this, you are looking for a coach. This coach now gives you tips on how you can achieve your personal goal. Whether you actually achieve this goal depends entirely on yourself. It is questionable whether the method and approach of the trainer fits your ideas, in which all these points are crucial for optimal goal achievement. If you are a vegetarian and a fitness trainer recommends chicken as a protein supplier, your vision will not be fulfilled either. Of course there are alternatives, but unfortunately it is a bit more complicated in trading.

Every trading beginner first needs a rough orientation in order to develop.

1. How does the market work?
2. How do the big players work?
3. Workstation, screens, workplace, internet?
4. Time management as a part-time and full-time trader?
5. Shares, Future, Forex?
6. Which currency pairs, commodities, indices or stocks?
7. Scalper, Daydrader or Swingtrader?
8. Brokers, data feeds, software?
9. Money management, risk analysis, leverage, security, stops?
10. Fundamental, chart technique, technical analysis?
11. Breakout, reversal, pullback, range bound, continuation setup?
12. Indicators, EA, candles, tickchart?
13. DoM, time and sales, heat map, volume profile, spoofing?
14. Special aids, sounds, limit orders, iceberg orders?
15. Time units, chart views?
16. Opinions, press, news?
17. Psychology?
18. Continuing education, communication?
19. Daily trading evaluation / analysis?
20. Personal setup?

(In my blog you will find detailed information about all 20 points!)

In the last 10 years, I have adapted and optimized all these points again and again in my own study. I still haven't reached my final goal. I work on my development every day, because every standstill is a step backwards. I have read few books about trading and have never been to a trading coach because their statements have not convinced me. I have taken a path in trading that is second to none worldwide. This method is tailored to my trading style in order to generate the greatest success for me. With the help of a trainer, I would never have found this way.

Most coaches cannot give you a correct recommendation based on my 20 points, because every person is as individual as a thumbprint. If you are a Forex trader and a trading coach tries to reverse your polarity as a future trader, you have to start all over again. Basically, it's always a question of time and money. Of course you can learn something from every trainer and in the worst case you learn how not to do it. But you can usually save the money.

The 20 points I mentioned are the basis of your trading. On this you have to build the most important point, your personal setup. This setup tells you when to get in and out of the trade and unfortunately you have to find out for yourself. No coach can help you with this. If a coach claims that anyway, he is lying. The reason for this lies in our psychology, every trader is differently structured and therefore people, in the same situation, always react differently. Therefore, you will never be able to make the same trades as a trading coach. However, a suitable trainer can save you time so that you can find your suitable setup faster.

If you have enough time, I recommend investing 7-10 years to find your suitable setup. If you can manage these 7-10 years (20-25,000 hours), you could become very successful. With the right trainer you can possibly save 1/3 of the time, but first you have to find the right trainer. But forget to believe that you can trade better after coaching. Then you only know, what to focus on in the next few years.

Let us assume the following situation:

You already have basic trading knowledge and would have to learn 6 more years to become a successful trader. With a coach you can save 2 years and manage to be successful after only 4 years. For these 2 years you save, you are welcome to invest money.

Unfortunately I can't tell you where to find a suitable coach, but I can advise you to avoid the following coaches:

Coaches who advertise aggressively on social media.
Coaches who have their headquarters abroad.
Coaches who boast on money, cars and real estate.
Coaches who claim they can make you successful.
Coaches who scold their competition.
Coaches that offer volume trading.
Coaches who want to change your trading style completely.
Coaches who tell you how easy it is to trade.
Coaches who are cut down their trading products or reducing their prices.
Coaches who don't seem honest to you.

I have nothing against good coaches, only against the bad ones!

Always keep in mind:

If you trade successfully, it depends only on your setup and not on the ability of a trading coach. He may have saved you some time, but only you are responsible for your success. Likewise, you are solely responsible for your failure. In the worst case, you might find that trading is not for you. The most important thing is to stop trading immediately when you realize that it is not your world. This is not a failure, just think of how many professions there are where you would not feel comfortable. Of course, many people dream of financial independence, the chance of becoming an independent entrepreneur is twice as high as in trading. This is also an opportunity that you can take. There is an important sentence that applies to life: We have the chance to start anew every day. We should use that.

I wish you a nice weekend

Greetings Michael

Michael, you should write a book if you have time. I love the style in which you write. Your posts are very appreciated.

Looking for complex patterns in the DoM


Hello nigpig,

First of all, I am pleased that the information in this blog help you. I had English in high school for a few years, my sister even lives in Canada, but I always thought that my knowledge of English, are a great disaster. When I read my first posts on my blog, there are still a lot of errors. However, I believe that I have been able to improve my English skills in recent years. You are from England and if you praise the style of my posts, I believe that many traders worldwide understand what I want to convey. Thank you very much for that, it will definitely help me further but I would like to improve my English skills significantly in the next few years. As a German, thinking and writing is far too complicated; the Americans have developed a strategy with their language to get things straight to the point quickly and efficiently. I like that very much, but it sometimes creates misunderstandings.

The term "honey cake horse" does not exist in the English language. A honey cake horse is a pastry made of honey cake in the shape of a horse. Honey cake horses were previously sold at fairs. In Germany there is a saying: grin like one Honey cake horse. The English equivalent is: To smile like a Cheshire cat. In the stock exchange area in particular there are very complex representations that are not always easy to explain. But with the right training, you can also tackle this challenge. The most important thing is that even a beginner understands what you want to convey.

In 42 months I'll be 60 years old and I've actually thought about writing a book about my trading style. Although this is a lot of work to describe things in such a way that they result in concrete benefits. In addition to the right style, a professional editor must optimize the book. I have enough topics , the decisive factor is that the reader benefits from them. But I will think about it, I have now the half of my life behind me and enough time yet .

I have discovered and published very crucial things in my blog in recent years and I am happy if it helps the readers. Although I wouldn't have to, I work over 300 hours a month in trading. This includes my blog, my current projects, making money from my trading, optimizing my settings and helping some friends with trading. Thanks to my filtered stock market data with special software, my trades are more precise and efficient every week. This is because I understand the procedure of the high-frequency traders better and better and can use them to my advantage. Interestingly, even the most successful high-frequency traders work with a special and very complex pattern recognition, the win rate of 99% speaks a clear language. We cannot adopt their approach for our trading, but from the patterns we can derive information that gives us an advantage over most trading participants.

In recent years I have developed a special type of trading in scalping that has significantly reduced my risk. This approach would indeed be interesting to analyze in more detail. The software I work with has been developed by Russian programmers, since Trump's election affair it is clear that the Russians are not only hackers, but also excellent programmers in the stock market. They also offer interesting data from the Russian stock exchange, such as the open interest, which one can be used to his advantage.

Most users who also work with this software have no idea what is possible with it. The advantage lies in the infinite possibilities of the different filter settings. These filter settings are the main reason why you win or lose. This enables me to dig deeper into the DoM and the time and sales list and to recognize the plans of the big players faster than everyone else. Interestingly, a graphic display in the DoM creates clear patterns that can be assigned to specific actions. It's like getting a clear signal to get in or out. I showed that in my last videos. Likewise, my filtered tones are a huge help to get the fastest market information. This project is just beginning and the graphic signals that arise in the DoM look like a matrix for a beginner, but I can already identify recurring patterns that I can use to advantage.

With any dom / time and sales list you can look deeper into a candle. While this information helps, it creates too many uncertainty factors. With different filter settings you can go deeper into the DoM and the time and sales list. The results so far are promising, but it's only the tip of a giant iceberg. And it is precisely this challenge that captivates me every day for 12-13 hours. I am convinced that with the right filter settings in the DoM / Time and Sales List you can display special patterns that are very likely to show the optimal entries and exits. My theory may be stupid, but what if my theory is true? Maybe I will fail in the short term, but that's no reason not to try again. If I already succeed in generating successful trades from patterns, it is only a matter of time before the optimal filter setting is found. It's like looking for a needle in a haystack, but I'm already using a magnet. I don't know if that's enough in the end, but the search for the solution is in principle a big win, because I learn a lot about the market in this way. And that is exactly what brings me forward, regardless of whether the primary goal is achieved or not.

Up and down movements always occur in similar sequences, as do the resulting patterns. We will take a closer look at this in the next few weeks.

Greetings Michael

My mind just blew up so amazing

My God.
I found a good post, and decided to come back later and look, but I saw now that everything is huge, here there must be more written than the alexandria library.
I don't think what I wanted anymore.