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Attachments: Real or Algo
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Real or Algo

Once you release yourselves from the magical ideas of support and resistance, none of this algo nonsense matters.

This is just price discovery, there is nothing special to it, and you can definitely capitalize on it. So if you know what to look for, use it to your favor.
Quoting xRedStaRx
Once you release yourselves from the magical ideas of support and resistance, none of this algo nonsense matters. This is just price discovery, there is nothing special to it, and you can definitely capitalize on it. So if you know what to look for, use it to your favor.
So there isn’t an Algo?
Quoting xRedStaRx
Once you release yourselves from the magical ideas of support and resistance, none of this algo nonsense matters. This is just price discovery, there is nothing special to it, and you can definitely capitalize on it. So if you know what to look for, use it to your favor.
Hi xRedStaRx

Now I am confused, earlier in this thread you wrote you use supply and demand in your trading.

Now you are saying you don't use it?

Please explain further.
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Trading thin liquidity at the boundary of the charts
  • Post #684
  • Quote
  • Edited at 6:24am Aug 6, 2020 5:41am | Edited at 6:24am
GEfx forex manipulation explained here.
"And the kicker is, they tell you in advance what they're going to do"
https://www.forexfactory.com/thread/...3#post13085673

My similar explanation about monetary forex valuation policy mechanism here.
https://www.forexfactory.com/thread/...0#post12923970

If you search fti TAF thread you get the same explanation.

T1, 2,3 traders trade with the guidance of value boundaries and participate actively managing their books inside this range with good knowledge of dominant participants valuation intent. Fti calls it "knowledge of the terrain".

Retail forex perceives this differently as support resistance, supply demand and stop loss hunting.
Quoting RickM
{quote} Hi xRedStaRx Now I am confused, earlier in this thread you wrote you use supply and demand in your trading. Now you are saying you don't use it? Please explain further. {image}
Supply and demand is a more comprehensive concept than support and resistance, I've explained in another post how it becomes a problem when you rely on invisible walls as S/R like what is being taught to the general public. Because of that, you will always get the 'vacuums' and see price spike out these levels searching for liquidity.
Quoting moodybot
{quote} So there isn’t an Algo?
There are algos of course, their job is to absorb the orders and fill in the most efficient way, but there is nothing in their code that grinds for stop losses, it's just a function of price discovery rather than some inherent market malevolence.
Quoting xRedStaRx
{quote} Supply and demand is a more comprehensive concept than support and resistance, I've explained in another post how it becomes a problem when you rely on invisible walls as S/R like what is being taught to the general public. Because of that, you will always get the 'vacuums' and see price spike out these levels searching for liquidity.
Hi xRedStaRx

Got it now. For the record, we don't believe in support and resistance or supply and demand.
However saying that, please post your explanation on the subject as this thread could do with some more quality posts.

Cheers Rick
Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi xRedStaRx Got it now. For the record, we don't believe in support and resistance or supply and demand. However saying that, please post your explanation on the subject as this thread could do with some more quality posts. Cheers Rick
Hi RickM, I've made a big post using GBPUSD chart as an example of how the market functions using supply and demand. I believe I've made several posts in this thread discussing those concepts, but if you need any more discussions or elaborations I'd be happy to provide more input.
Quoting xRedStaRx
{quote} Hi RickM, I've made a big post using GBPUSD chart as an example of how the market functions using supply and demand. I believe I've made several posts in this thread discussing those concepts, but if you need any more discussions or elaborations I'd be happy to provide more input.
Hi xRedStaRx

I will have a look over there as I am a keen student of trading strategy's. While I may or may not not see merit in it personally, I will give it the attention it deserves.

Have a great week
Trading thin liquidity at the boundary of the charts
As part of my journey to discover expansion limits, this is something I have been using successfully for a couple of weeks and have been sharing with a colleague who has also found it beneficial so I thought I'd share to give you something to play with over the weekend.

The indicator is by that extremely talented and generous MLaden. Don't be fooled into thinking it is a MACD, it is much more elegant than that. What it does is measure the angle of a wave and it does this by taking the 'number of bars for normalisation' setting as the base of a triangle (b on the chart) and the price difference from the start to the end of time b as the height (a on the chart). He then applies an arctan trigonometry calculation to calculate the angle of the hypotenuse (c on the chart) from the start line (d on the chart). If you set the average period to 1, you will be monitoring the angle of the close prices rather than an MA.

The beauty of this is that it does not change as you zoom in and out (unlike the trendline angle drawing tool) and the angles that you see are pretty similar across different instruments so, although it is worth spending time finding ideal settings for your favourite pairs and timeframes, they may well also translate to other pairs.

My thinking initially was that the bigger the angle, the steeper the move which may hit the expansion limit if it is steep and fast enough. And this may still be a good implementation but I have been finding more reliable trades by waiting for signs that the move may be running out of steam. A very common pattern is that a significant move starts quite steeply but then starts to flatten out and it is when price starts to make HH/LLs but the angle is flattening that I like to enter. But there may be many applications for this little treasure.

Enjoy and please share if you come up with anything exciting.
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Hey...

I honestly don't believe in any main "algo" controlling the totality of the FX market, neither in conspiracy "theories" proclaiming that basically all financial markets are constantly manipulated to the bone.

And there's many way to subjectively name the same things.

Also I remember George saying it's the same with the stock market; but NO, stocks appreciate/depreciate strictly from supply/demand mostly based on passive speculation (buy & hold long-side investments).

The fact is that "Smart Money" (central bancs and commercial institutions) doesn't need "Dumb Money" (retail traders/prop firms) to have enough liquidity for being able to trade currencies, thus moving the price. Important extended large moves (changes in "trends" {please note the "quotation marks"} directions) happen according to globally relevant macroeconomic-geopolitical data/indicators/variables/conditions between the biggest countries, companies and their currencies; nowadays many times already "discounted" in price, as we are currently seeing with multiple "red" news not making truly substantial moves like years before.

Aside "BIG FISHES" sometimes pushing price with heavy volume to fill their required orders, small scale "manipulation" from market-making algorithms of liquidity providers (real "prime of prime" brokers) is a collateral consequence of maintaining balance/equilibrium between bigger moves (quick executions at fair exchanging prices inside relatively small buy-sell spreads, with controlled slippage nearly all moments, across almost every level down to the point [1/10 of a pip]). Market makers exist to create liquidity around the current market quotation price, forming the majority of the BID/ASK, up & down between larger moves caused by longer-term fundamental economical factors. And of course they often pull liquidity and widen spreads around uncertainty in order to "offset" some of their inherent risk as counterpart-intermediaries.

There will always be some of the strongest parties with enough power to take advantage of "insider information" and sudden "unexpected" news/tweets, provoking relatively big spikes, spreads and slippage along phenomena like liquidity gaps/vacuums.

But hey, maybe I'm absurdly wrong ¯\_(ツ)_/¯

Cheers and Good weekend!
Quoting hepsibah
As part of my journey to discover expansion limits, this is something I have been using successfully for a couple of weeks and have been sharing with a colleague who has also found it beneficial so I thought I'd share to give you something to play with over the weekend. The indicator is by that extremely talented and generous MLaden. Don't be fooled into thinking it is a MACD, it is much more elegant than that. What it does is measure the angle of a wave and it does this by taking the 'number of bars for normalisation' setting as the base of a triangle...
Some nice examples of the angle giving warning of the move running out of steam. The steep moves are shown by the signals and the red line shows daily highs. The ellipses are what I look for where price has had a steepish run up/down and then makes new H/Ls on a diminishing angle
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Quoting hepsibah
Enjoy and please share if you come up with anything exciting. {file} {image}
Thanks, just came across your post.

In case it helps, in MT4 & 5 if you use the "trend by angle" tool instead of the "trendline" tool, the angle will remain constant when you zoom.
Good Trading
Hi All,

Really great thread. Apologies, if I am rehashing an old topic re Algo or Natural. I am getting splinters sitting on this fence. I can see both sides. Its been a really constructive discussion. Hats off to all of you.

At the primary feed and top tier dealing at interbank level its my understanding the major liquidity providers are 5 or so big banks. Although not centralized, arbitrage keeps a tight range between prime and higher-tiered brokers.

Could it be one algo controlling, or a group of vested interests. Cartel behaviors absolutely exist, so I do not rule this out or price discovery (natural).

Price is moved by aggressive get me in now orders against opposing passive limits. One could argue it would be just as easy to move price as a ‘one’ or ‘cartel’ by removing a bulk of your liquidity on one side of the market you are offering as this would affect price through market orders moving through gaps into stops. I don’t think it has to always be aggressive buying or selling but rather shifting inventory on the price ladder.

Volatility is borne out of liquidity factors, the imbalance is the shift in speed, you can have massive movements without a massive amount of orders coming in but rather orders being pulled and spreads widening etc.

Im still not sure if its pure natural auction price discovery that moves price to these areas (SL’s) or if its given an artificial push or pull. I must say I lean more towards the more sinister reason

Cheers

LK
Quoting hepsibah
As part of my journey to discover expansion limits, this is something I have been using successfully for a couple of weeks and have been sharing with a colleague who has also found it beneficial so I thought I'd share to give you something to play with over the weekend. The indicator is by that extremely talented and generous MLaden. Don't be fooled into thinking it is a MACD, it is much more elegant than that. What it does is measure the angle of a wave and it does this by taking the 'number of bars for normalisation' setting as the base of a triangle...
Hi Hepsibah

I had a play with that indicator from Mladen and it does help to see turning points on moves that travel at sharp angles. It does however not nail the expansion limit moves as it focusses on the angles rather than the expansion distance away from the market frequency.
When I set it to the indicator to the correct frequency for the market, it does nail the angles correctly and really does show some great trade setups but still fails to pick the 85% probability moves that are ones I really seek to trade.
This coming week I will run it at the bottom of my standard charts to see if there is another worthwhile scalping strategy for me.
I will be calling a few of those trades in our live training room (at a reduced size) so it will be interesting to see how the signals work out.

I will be trading EURUSD & GBPJPY with that indicator.

Cheers Rick
Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi Hepsibah I had a play with that indicator from Mladen and it does help to see turning points on moves that travel at sharp angles. It does however not nail the expansion limit moves as it focusses on the angles rather than the expansion distance away from the market frequency. When I set it to the indicator to the correct frequency for the market, it does nail the angles correctly and really does show some great trade setups but still fails to pick the 85% probability moves that are ones I really seek to trade. This coming week I will...
Hi Rick,

Is this tool still helping with potential reversals? Thanks.
Quoting ia1979
{quote} Hi Rick, Is this tool still helping with potential reversals? Thanks.
Hi IA

As a stand alone tool to obtain signals for potential reversal, it is working out better than I thought possible for a basic indicator. You still need to match the MA to the core forex frequency of the pair but once you have established this setting, just take the trade after the tip of its apex. That's the yellow line I placed on a few grinds.
The success rate is so far been over 90% but that includes setting stop loss to break even once the curve dips.
On that chart, I am selling past the yellow line in Red and buying past the yellow line in blue - Regardless of ADR.
I took all 12 trades you can see here for 11 wins and 1 small loss.

I will gather some stats in another week and show them here.

Cheers Rick
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Trading thin liquidity at the boundary of the charts
What you are looking at is the Algo limiting expansion, ensuring price is confined within a narrow price band to keep the spread size acceptable for all traders.

Real or Algo? What’s your opinion
Trading thin liquidity at the boundary of the charts
I am also experiencing quite a lot of success with the angle indicator. My setup currently has two versions, a fast one and a slower one. If the market is very slow, I will trade a signal on either and am content to grab a couple of pips (they add up quite quickly!). If the market is moving more quickly, I like to see simultaneous signals - they are very reliable.

The other thing I have noted is that the end prices of a sharp angle move become important levels and, even if price does not bounce immediately after such a move, there is a very high probability that price will revisit. This is an example on EURCAD this morning, price made a sharp move down on the last signal but did not bounce so I entered a trade at the lower price. The first reversal reached the low of the signal exactly to the pip! After that, it moved up sufficiently for my trade manager to grab my couple of pips and since then it has moved even further. You can see from the earlier two signals how important these levels become.
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Quoting RickM
{quote} You still need to match the MA to the core forex frequency of the pair but once you have established this setting, just take the trade after the tip of its apex. {image}
Hi Rick,

Can the optimal settings be roughly determined by the most extreme zone of George's M1 TMA or am I totally off-base?
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