The Equilibrium, a key to success!

Hi Michael

Thanks - Ein tolles Neues Jahr!

Trade well / Mos

New year 2021


Hello dear subscribers,

I wish you all a great year 2021 and I would like to take this opportunity to thank you for all the feedback, compliments and New Year's greetings from your side.
Evil tongues claim that day traders do not bring any economic benefit to society as they only exchange money on the stock exchange. That may be true for some, but not for profitable retail traders. Those who manage to generate their income from it pay taxes, invest in their pensions, consume and thus support the economy, instead of lying on the pocket of the state because they are unemployed. Many casual traders invest in the stock market in order to achieve better returns on their investments. One can understand that well if you look at the interest that is currently being paid in the market. This is also a way of relieving the state. Because those who make private provisions for their pension during their lifetime do not have to be supported by the state when they retire. You see you can always look at a thing from two sides.

3 months ago I published my first voice video on You Tube and was impressed by the great amount of feedback from you. Thank you very much for that too. On the last day of the old year 2020 I published my 8th video. It's about the difference between speculating and investing, using Apple's most successful stock as a comparison. Furthermore, the term volatility is discussed, which is often incorrectly referred to as an interest or yield accelerator. But unfortunately the volatility is contrary to the achievable return of a trader. I'll go into more detail in the video. The forex market is often described by futures and stock traders as a typical entry-level market. You can also find out in this video that exactly the opposite is the case. In addition, you will receive exciting news about my planned projects in 2021.




New video: Speculate or invest

I am convinced that the new year 2021 will make history because we learned many things from the old year 2020 that made us stronger than ever.

I wish you from the bottom of my heart that you will achieve your goals

Kind regards Michael

Trading taxes 2021


Hello dear subscribers,

I hope that you started the new year 2021 healthy and motivated. For many traders from Germany, the new year, with the enforced loss offsetting law for futures transactions, brings considerable restrictions. I have created an Excel table to deal with this topic. How to work with the table I explain in my video that I published today. We highlight the situation of beginners, advanced and professional traders and how the tax exactly affects your trading results. But this table is not only suitable to shed light on taxes. This allows interesting strategies to be developed that help us in daily trading. How does a favorable spread affect my winnings? How does the probability of winning change with the stop, TP and the spread? Since this tax issue primarily only affects Germany, I have also presented this text in German. But also the other countries can work with the Excel table, it should only be individually adapted to the respective tax and off you go.
I would be happy if the information helps you

Kind regards Michael


Trading Steuern 2021

Hallo liebe Subscriber,

ich hoffe, dass ihr gesund und motiviert das neue Jahr 2021 begonnen habt. Für viele Trader aus Deutschland, bringt das neue Jahr, mit dem durchgesetzten Verlust-Verrechnungsgesetz von Termingeschäften, erhebliche Einschränkungen.



Ich habe dazu eine Excel Tabelle erstellt um mich mit dieser Thematik auseinandersetzen. Wie man mit der Tabelle arbeitet, erkläre ich in meinem Video, dass ich heute veröffentlicht habe. Dabei beleuchten wir genau die Situation der Anfänger, der Fortgeschrittenen und der Profi Trader und wie sich die Steuer genau auf eure Trading Ergebnisse auswirkt. Doch diese Tabelle ist nicht nur geeignet, um die Steuer zu beleuchten. Damit lassen sich interessante Strategien erarbeiten, die uns im täglichen Handel helfen. Wie wirkt sich ein günstiger Spread auf meine Gewinne aus? Wie verändert sich die Gewinnwahrscheinlichkeit mit dem Stopp, TP und dem Spread? Da diese Steuerbrisanz in erster Linie nur Deutschland betrifft, habe ich diesen Text zusätzlich auch in Deutsch dargestellt. Aber auch die die anderen Länder können mit der Tabelle arbeiten, sie sollte nur individuell auf die jeweilige Steuer angepasst werden und schon kann es losgehen.

Ich würde mich freuen, wenn euch die Informationen weiterhelfen

Inserted Video

Ganz liebe Grüße Michael

The new projects for 2021


Hello dear subscribers,

In today's video you will learn how to protect yourself from the big players, we will check whether there are clear pattern sequences in the price and I will introduce a new candle that brings you significantly more information, while saving 33% in time. In the last few weeks there have been more and more inquiries about how I have optimized my approach in recent years. I'll go into that in the video.

Algorithms can only be read out cleanly if you work with the fastest programming language that effectively implements very complex sorting functions. In my new video I show you two representations that do not yet exist anywhere in the world. These are some projects that we are currently dealing with in order to read the algorithms even faster. This will result in a new DoM and a completely new time and sales list that reveals a completely new information architecture to us retail traders.

Bionic candle against big players



I wish you much fun with it

Kind regards Michael

Thank you Michael!

Do you think any indicator can help in detecting small breakouts? Do you have any indicator for this.

I have sourced attached indicator. The indicator calculates the values of the average High and Low prices during the trading day.
The beginning of the trading day is defined as a parameter.

For example:
Timeframe: H1,
BeginTime: 02:00
For "02:00" candle: HighAvg("02:00")=High("02:00"), LowAvg("02:00")=Low("02:00"),
for "03:00" candle: HighAvg("03:00")=(High("03:00")+High("02:00"))/2, LowAvg("03:00")=(Low("03:00")+Low("02:00"))/2, etc.

Michael, you mentioned a "Bionic candle" for MT4.
Would you please be so kind and add it to your post.

Danke, renkotop

Bionic candle with template


Hello Uli,

I am happy to post the link again

https://www.forexfactory.com/thread/...4#post12542574


Bionic candle with template for download !!!

Kind regards Michael

Small breakout detection indicator

"Do you think any indicator can help in detecting small breakouts? Do you have any indicator for this."

Hello simnz,

if you set off a fireworks rocket and don't see the fuse, you never know exactly when the rocket will go off. A small as well as a big breakout always comes unexpectedly, that's the purpose of an outbreak. How do you want to measure the parameters in the forex market in order to specifically predict such an outbreak? In the forex market we only get the price and the time, which are ultimately only the result of the invisible market orders in the DoM that run into the limit orders.
Even with the stock market data, this information is difficult to identify. First of all, before a major breakout on the long side, the limit sell orders are placed unnoticed with larger iceberg orders. At the breakout period, the big players' algorithms begin to shoot a cumulative number of smaller market buy orders into the market. At the same time, the iceberg orders (limit sell orders) previously placed on the market are completely removed from the market. This makes it possible to move the price massively with a relatively small number of market orders.

With my tones, which are generated from stock market data, you can hear when a machine gun salvo of market orders comes into the market. However, it is initially unclear whether these market buy orders are also able to penetrate the limit sell orders. Anyone who works with special spoofing information can recognize this withdrawal of limit sell orders. However, it is uncertain whether he will be able to get in market early. When an upward breakout begins, the best ask line jumps up, the best bid line stays at your price level because limit buy orders are not submitted so quickly. This situation increases the spread to double or even triple. A trader who enters the market shortly after the breakout has a major disadvantage. Often the price also drops again because a larger gap has formed. This gap is often not visible because it takes place within a candle.

A possible alternative to the early detection of an outbreak could be a special gap indicator that shows every gap that is larger than 1 pipette in a special chart. It would have to be ensured that every gap is displayed, even if it is closed again immediately afterwards. It is questionable whether special pattern sequences could be derived from this. In any case, this gap indicator could be used to identify gaps in the limit orders. From this one could create derivations, which of course can be interpreted differently. Another problem arises from the broker. These will pass on different gap information as each one provides different prices. I would recommend using real stock market data in addition to the forex data for better market insight.

I also only trade in the forex market because the security is much greater than in the stock market. We traders are always on the lookout for patterns from which to derive trading decisions. Unfortunately, there are no patterns in forex as the price is only random. With stock market data, I can identify patterns that will help me make trading decisions in the forex market. That has increased my probability of winning significantly over the past two years. No one would drive across a street at night without lights. It is dark in the forex market because correct ask and bid information is not available. Therefore everyone should get the light from the stock exchange markets in order to find the road in the forex market. As I noted in my last video, stock market data is the best forex indicator.



Unfortunately, I cannot help you in the area of Forex indicators, as they have not been decisive for me for 2 years. Stock market data and good stock market software cost around $ 50 a month, these costs come back quickly because with this important information in forex trading you will have significantly fewer losses.

In the ten videos I have produced so far on YouTube you will find 7.5 hours of free information on this.

Greetings Michael

I agree with you we cant forecast. What I meant finding a sequence of patterns to do a probability study.

Do you think drawing bands based on pips high and low pips defined by user will help? Boxes dont provide analysis like pips band drawn for certain number of bars do help.

If yes, this indicator may be modified..

That is quite enlightening. I trade intutively looking for locations and trying to fish by attracting plugins eye. Most of the times it works on cfd indice market. Liquidity providers have created their own symbols with no real correlations with future or cash index movements. Fishing works well there for the plug-ins to play games with me. So I really dont feel the need to use DOM.

CFD movements is like a rehearsal in real time for me to trade futures.

Talking of videos, you will love this watching video shot 20 years ago.

Pattern in the market


Hello simnz,

Basically, only from my point of view, I can answer your question, whether the indicator you posted helps. As we know, the price is only a result of the cause (Market- and Limit Orders), which we cannot see in the forex market. Since an indicator always lags behind the price, it is logically always slower than the price itself. An indicator in the Forex market only ever relates to the result and only arises randomly, due to the time factor. In my view, it is not possible to derive a profitable pattern sequence from chance.

Nevertheless, users of indicators will see it very differently. An indicator is a kind of worldview. If an indicator of 10 signals shows 7 signals correctly, you can also make profits with it. You just have to be aware that it is a coincidence. Since I want to exclude chance as much as possible in my trading, I am forced to limit myself to the cause indicators.

Every trader always decides for himself which data he uses to make trading decisions. You have gained a lot of experience in your trading, for this reason I accept your approach, although I trade completely differently. There is no right or wrong here, the different opinions of traders only lead to the fact that there can be an exchange market at all. Imagine if all traders are of the same opinion, that would be the end of the market. And that's exactly why I think different opinions are good.

If you compare the representation of the stock market data in 2001 (from your video) with today's data, you can roughly imagine what it will look like in 2041. I am convinced that acoustic and haptic signals will then play a stronger role. New charts in 4 dimensions could then also convey faster information. Here is a small example of this.



On my YouTube channel I have produced a detailed 45-minute video about the haptic and acoustic signals. I've been experimenting with it myself for a number of years and I'm thrilled. Sometimes these signals come in faster than the graphical representations in the chart.


https://www.youtube.com/channel/UCCb...zsD2soUtb0CTqA

Link to my YouTube channel


Every trader is interested in gaining a market advantage. Faster information is a clear market advantage, even if it's only a few milliseconds. These milliseconds can decide today in Formula 1 about a world championship and also about a small profit in EURUSD.

All the best for the future

Lovely wishes
Michael

You are right. Indicators help you in forming bias .
Unseen hands are moving auctions and no amount of your research ever can for sure figure it out. It will always remain a probability.
Ideal goal is to eliminate chance or what I call probability or an educated guess. I wish you all the best.

Overview of my videos on YouTube



Hello dear subscribers,


On my new YouTube channel, over 5,200 people in 85,000 minutes have carefully followed and analyzed my videos in the last 4 months. I never expected that and was completely surprised. Based on your suggestions, I would like to introduce you to all of the videos I have published so far with the corresponding link and a short description. This gives you a brief overview of what the individual videos are about. This saves you time to only deal with the topics that are of interest to you.

Video 1 Bionics algorithms



This video gives you an overview of what content you can expect in the next few months. I will briefly go into my trading strategy and why I only trade with exchange data in the Forex market. You will also get information about my blog in Forex Factory and why I chose the name Bionics. I will briefly discuss the big players and how they dominate the market. In addition to the algorithms, you get an overview of the tones I developed and how important the breakeven point is for a trader.


Video 2 Forex vs Future



In this post I will show you how you can double the probability of winning in the Forex market and which market offers the highest level of security. In addition, you get an overview of why algorithm traders have the greatest opportunities in the future. Here the three markets, stocks, forex and future are compared exactly. This video is a crucial key to how I proceed.


Video 3 Increase Trading Efficiency



Since I do my trades in a very narrow range, I have been asked how I calculate my risk. First, scalping is described as very risky and expensive, but this is a big mistake, as you can see in the video. A decisive factor are the pip per minute, which shows a trader the optimal exit time. This reduces the risk and increases trading efficiency.


Video 4 Fast and Furious



This video is about workstation requirements, why sounds are four times faster than the charts, about neuroscience in brain research, and even about body language. Here you will find out exactly why the knowledge of the algorithms trading are crucial.


Video 5 currency pairs



There are many decisions to be made on the way to becoming a successful trader. Which system am I using? Do I trade stocks, currency pairs, indicators, commodities or precious metals? Do I use CFDs, options or futures for this. Which platform and which broker is best for me? Which software do I use to translate stock market data and what should my optimal workplace design look like? Today's video is about the question of how to determine your optimal currency pair in the Forex market. There are different approaches that you have to consider in order to significantly increase your profit probability in the end. In my opinion, a crucial video to minimize your risk.


Video 6 Big Player



The video is about the strategies of the big players. We consider, among other things, the extreme imbalance between big players and retail traders and why limit orders influence the market more than market orders. It's about the impact of algorithms on the market, the three main strategies of big players and how you can use the algorithms to your advantage. It is a very good overview to understand how the big players operate.


Video 7 high frequency traders



This video is about the approach of high frequency traders, how to avoid them and why they do not play a role in certain markets. How do the big players differ from the high-frequency traders and in which markets you have to watch out for them. With the right strategy you can avoid them and thereby increase your probability of winning.


Video 8 Speculate or Invest



This article is about the difference between speculating and investing, how best to invest in the different markets, and why the Forex market is the most profitable market in the world. There are different returns that are directly related to volatility and security. Those who know these factors have a clear market advantage.


Video 9 tax 2021



With a change in the Income Tax Act, the grand coalition has opened a new chapter for German investors. It concerns the taxation of futures and is no longer to be outdone in stupidity. Very few people can imagine that an investor would have to pay tax on realized losses. This will be possible from 2021. What is behind the change in the law and who is actually affected? I even created an Excel spreadsheet for this, which you can download from my blog.


Video 10 Bionic candle



In this video you will learn how to protect yourself from the big players, we will check whether there are clear pattern sequences in the price and I will introduce a new candle that brings you significantly more information, while saving 33% in time. The Bionic Candle I introduced brings massive advantages in the Forex market even without stock market data. I go into more detail in my video about the advantages of this unbeatable candle. In addition, we talk about the best strategy to reliably identify future trend changes.


The next topics specifically deal with the procedures of the big players and how you can use different tools to find out exactly what happens next. Because only those, who can see the archer ,can safely avoid the poisonous arrows. Although the big players dominate the markets because of their available capital, they do not have many options for securely realizing their profit. We retail traders have a decisive advantage that the big players envy us for. And it is precisely these opportunities that we should use to our advantage. I'll go into that in more detail in my next video.

If the videos help you, I'll be happy. If you subscribe to the channel on YouTube, you will be automatically informed when a new video is available.

I wish you a successful trading week

Kind regards Michael

The Broker ABC- Rip off? Scam? Crash?


Hello dear subscribers,

The broker issue is stressful for many traders because of the opaque market. My new video post is about the differences between Forex brokers and how you can individually find the best broker for you. We also shed light on criteria that are normally not taken into account. As you already know, I basically only use the forex data to complete a trade. The decisive advantage for trading in the forex market is the incredibly high level of security that a forex broker offers in relation to the future market. There are many hurdles to overcome when looking for the right broker. There are hundreds of different offers, all of which are very tempting at first glance. Every broker claims to be the greatest, the best and the most beautiful, but the truth is usually rather sobering. There are three different categories of brokers that we will take a closer look at. In addition, we will also look at the dangers that some forex brokers pose. There are still too many black sheep in this industry who take advantage of their dominance over retail traders. Those who are familiar with this matter can quickly protect themselves against fraud or manipulation. Dubious brokers have certain anomalies that can be identified, I go into more detail in the video.



The Broker ABC - rip off? Scam? Crash?


A quick note about the translation of the video

On YouTube, the videos are initially displayed in the lowest resolution after uploading. Then processing begins in HD and then in 4K. Only then is the translation available. I uploaded the video yesterday so that the 4K version could be processed overnight. The video is 47 minutes long and has a size of 445 MB in MP4 format. In order to ensure an optimal display, it was configured in a resolution of 4K with 60 frames / minute. That is also the reason why processing always takes so long. Maybe 30fps will be enough in the future, I'll check that in peace. The HD version is completed after more than 12 hours and the 4K version is currently being processed. I hope that YouTube will accelerate a bit so that you can have the video translated. If the English translation is not yet available, please check back later. There are no problems for the German-speaking participants, but the video is only available in HD until the final 4K processing by YouTube.

I wish you a nice weekend and good luck for the next week.

Kind regards Michael

Hybrid Trader, the future in effective trading


Hello dear subscribers,


In recent years there have been repeated statements from different market participants that read:

The forex market is not a real market
Professionals only trade in the stock market
Forex is for beginners, future for advanced

First of all, it is perfectly normal for different market participants to have different opinions on certain topics. If that were not the case, there would be no stock exchanges, because the stock market thrives on different opinions. Different statements by market participants are only based on their own views but are not representative. That means what applies to one market participant does not necessarily have to apply to all other market participants. Basically, I accept any opinion that is contrary to my opinion, because every trader always has to bear his own risk. I also do not find it dramatic when someone trades in the futures market or stock market out of his own conviction. I only find it critical when the statements are followed by an assessment of other market participants. For example: The forex market is for beginners, advanced traders only trade in the futures market. The statement that only professionals trade in the stock market is just as nonsensical as claiming that only the best drivers drive Porsches or Ferraris. Therefore we will now take a closer look at these nonsensical statements and analyze them with facts.

Let us now ask ourselves the specific question what is actually the best market in the world?

Is it actually the stocks, the forex market or, in the end, the futures market? For me, all three markets are initially neutral. There is only one crucial sentence that interests me.

Where can I achieve the highest return with the lowest risk and where can I secure my profit with a high probability?

The forex market was originally not founded for the private sector, but exclusively so that large banks could trade with one another free of charge. It was only about independence from the stock exchanges, which, incidentally, were founded so that private investors could also trade with one another. With great effort, the English were finally able to open the Forex market for the private sector. The intention was a financial interest on the part of the broker. The forex market has grown into the largest market in the world to this day. Just under $ 8 trillion is traded in the Forex market every day. This means that the forex market is 20 times larger than the global stock market and 20 times larger than the global futures market.

It is nonsense to call the Forex market not a real market, even though it is the largest market in the world. Of course, this is over-the-counter trading, also known as OTC, which is not carried out between market participants via an exchange. There is an order book as well as a time and sales list, which, however, cannot be viewed by market participants. When the EURUSD rate is published on television in the evening, it is always the price from the cash market and not from the future market. So the sentence: "The Forex market is not a real market" belongs in the trash can. The fact is that the interbank market is the leader. The stock markets orient themselves at the interbank marketand not the other way around.

For over 20 years, some 10,000 traders have been trading against each other in the areas of stocks, forex and futures every year. The best traders in the world are selected from these. In the equities sector, an average annual return of 81% was achieved. That is an impressive return, but one that is not achieved by a normal trader in the stock market. It's comparable to Formula 1, and no normal driver can achieve these lap times. In the forex market, the world champions have achieved an average return of 106% over the past 20 years. Now we come to a very crucial point. In the stock market, the participants have concrete stock market data, while we do not receive stock market data in the forex. Nevertheless, it was possible for the best traders in the world to achieve an average of 30% more returns in the forex market than in the stock market in the last 20 years. How can this be explained?

As we know, the volatility in the stock market is significantly higher than in the forex market, which may seem to be the reason why the returns here are significantly worse. The more volatile an asset is, the less crucial big players there are in the market. In addition, high-frequency traders are drawn to the stock markets like mosquitoes to light. How else can it be explained that one trades worse with professional stock market data than without stock market data? On the other hand there is of course the futures market and there the world champions achieved 3 times more returns than in the forex market and 4 times more returns than in the stock market. Why should I voluntarily trade in a market that offers me four times fewer opportunities? That would be illogical and, from the point of view of probability, very ineffective. If I had to make a decision, the stock market would fall out because of the return.

What remains now is the forex and future market. Now of course everyone will say that if you can achieve three times more returns in the futures market you would have to automatically exclude the forex market. From the point of view of yield, that would be absolutely correct, but not from the point of view of security. In the Forex market I can lose a maximum of my existing balance on my account, while in the future market I can theoretically run into the red with € 200,000. This could have a very negative effect under certain circumstances. In return, I have better market insight and profit opportunities in the futures market. For this reason, both markets are crucial for me. Each market has certain advantages and disadvantages. The trick is to combine the advantages while reducing the disadvantages.

What exactly is the difference between a forex and a future trader? As we know, there is no information about bid and ask, no DoM and no time and sales list in the forex market. Transferred it means that the future trader sits in a vehicle that has a navigation system, while the forex trader has to do without this navigation system. If there is a traffic jam on a motorway, the future trader is rerouted and thus reaches his destination faster. The forex trader gets stuck in a traffic jam and will likely reach his goal later or not at all. What options does a driver now have who does not have a built-in navigation system? Now with Smartlink he can mirror his mobile phone on his screen in the vehicle and thus has a fully functional navigation system. If that is not possible, a mobile phone holder is usually sufficient to find the destination with Google Maps. From my point of view, the advantage of the future trader lies exclusively in the deeper market insight through the stock market data. But even as a forex trader, I can get stock market data.

For the biggest big players in the world, the stocks and future markets are far too small.

On some days there are big players in EURUSD who produce over 1 million lots or $ 1 billion in trading volume. A big player in Forex would then be able to trade the Apple share 13 times or the Euro FX E6 5 times completely. Another point, why should the big players move their billions in sales to the stock exchanges when you can trade in your market almost free of charge. If you want to follow the big players, you have to trade in the markets where most of the big players are. And that is definitely the Forex market. If you try to identify specific big players in the Apple share or in the DAX, this is much more difficult than in the EURUSD with the help of the stock market data.

I hope that with this post I could clear up some nonsensical statements. A trader who trades in the forex market is not a madman, but initially does not have as deep a market insight as in the stock market. But he can get the stock market data and thus has even more advantages than a future trader. In the stocks, forex or future markets, we can never determine 100% future price developments. For this very reason, a trader must always work with probabilities. In the last three years I have combined the forex market with the future market and this resulted in a kind of hybrid trader who uses the advantages of both markets and at the same time reduces the disadvantages of the individual markets. In the forex market we trade because of the incomparable security and receive stock market data in order to make our trading decisions. From my point of view, this is the most efficient approach, and it results in a significantly higher chance of winning. My win rate and probability of winning has improved steadily over the past few years. From this I can see a clear development that has a positive effect on me. Perhaps you too use these odds and ideas to optimize your personal situation.

If you want to dig deeper into the subject, you will find my latest video on YouTube here, which you can also translated.



The most important point is that you can freely decide in which market you want to be active in the future and not in which market you have to act. From this everyone can then assess their own risk and choose exactly the market where the probability of winning is highest. Progress always came from people who were allowed to be creative. But you have to have the opportunity to experiment. That's why I'm happy to be able to make my own decisions as an independent trader. Sometimes just a small idea is enough to achieve great things with it. If that helps you, I would be very happy about it.

I sincerely wish you all the best in trading and keep my fingers crossed for you.

Kind regards Michael

Why a smaller volatility is often better.


Hello dear traders,


Today's post is about the difference between trading stocks in the stock market and currency pairs in the forex market. As always, it is my personal opinion, which of course could clearly stand out from other opinions. The different opinions on the stock exchange are responsible for the fact that trading can take place at all. As you already know, the stock exchanges have existed for over 600 years and during that time no trader has succeeded in developing a reproducible concept in order to achieve constant profits. Neither in the price nor in the candles or indicators are clear, recognizable patterns from which a regularly repeatable trading advantage can be derived. There is no day trader on the Forbes list who is among the richest people in the world. Waren Buffet is in seventh place, but this is a long-term investor and not a short-term day trader. That is a crucial difference.

Of course, we traders need a certain volatility in order to derive a trading advantage from it. However, high volatility does not mean high returns for the day trader at the same time. The volatility pyramid is always contrary to the security pyramid. The higher the volatility, the lower the security. Of course, I can make more profits in a high volatility phase, but on the other hand I can also make just as many losses. We all know the periods of extreme volatility that cause prices to fly back and forth. In these extreme phases, many big players stay out of the market and that is precisely why these extreme price jumps arise.

High volatility can only arise if the limit orders are on average smaller and at the same time the market orders are on average larger than under normal conditions. If the limit orders are so small that they are unable to stop the market orders, there is a real explosion up or down. This creates large gaps within the DoM, which results in large spreads. In addition, the risk also increases at the same time. When the market and limit orders reach an average size, an average market situation arises. This situation is often found in the accumulation and distribution phases. If the market orders are on average smaller and at the same time the limit orders are on average larger, there is low volatility. This situation often occurs when the big players have gathered their contacts just before they are pushing course in a certain direction.

Now we come to a very crucial point, namely the question of who actually places the limit orders in the market? The big players are mainly responsible for this because they mostly use the limit orders to get in and out. The retail traders usually place the market orders in the form of stops, which are accepted by the limit orders of the big players. Of course, the big player market orders also invest to move the price in their direction, but these market orders are immediately resold. You can find specific information in my blog and YouTube channel about the big players.

From this information we can now make the following derivation. The weaker the share of limit orders, the fewer big players there are in the market. I don't mean the situation when a big player has collected in an accumulation phase and then pushes the course upwards. It's about the average volatility within a market. If a market is generally highly volatile, this is evidence that on average there are fewer big players in the market than in markets with lower volatility.

The high volatility enables short-term profits that we lose again due to the spread and the probability of winning. Medium volatility enables us to generate income that we can keep in the long term. It's not about making money fast, it's about securing our profits. And that is exactly what is much easier for me in the euro US dollar than in the stock markets. Since the volatility in the stock market is on average higher than in the forex market, the world champions in the stock market would also have to achieve a significantly higher return than the world champions in the forex market. Interestingly, that is not the case. The forex traders are 30% better and the future traders are even 400% better. Are the traders in the stock market trader actually 30% worse than in the forex market? I am convinced that this is not the case, rather that volatility often eats up profits. More high-frequency traders and fewer big players, that brings high volatility and thus uncertainty at the same time.

You can trade even more effectively if you combine the forex data with the stock market data. If you want to dive deeper into the topic, here is my latest video on YouTube that you can also translate.



Since I basically want to follow the big players, I also have to be on the move in markets where these big players are present. For this reason, volatile investments like an Apple share are out of the question for me. In the volatility comparison of the year 2020, the Apple share is about four times more volatile than the EURUSD. Increased volatility thus increases the unpredictability of a price. It is therefore clear that it is not the volatility that decides the return, but a predictable influence on the part of the big players. Anyone who is able to see where the big players are collecting has a significantly lower risk because they can be pulled in the right direction.

I wish you a good weekend and a successful trade next week.

Kind regards Michael

A new experiment with my new video scalping



Hello dear traders,

After 3 years and 500,000 words (content of 6 books) that I published on Forex Factory, I started to present my experiences and ideas in the form of YouTube videos in October 2020. On average, a 45-minute video was uploaded every two weeks, resulting in 12 videos that initially roughly describe my approach. This should now result in a series of efficient, shorter videos where we go into depth with important topics. One video is planned per week, although I don't yet know whether I will be able to keep it up in the long run, as I am still overseeing a lot of projects at the same time.

I produced my first videos almost half a year ago. Of course, I would have loved to have discussed these videos entirely in English, but I didn't grow up in America to have a 100% command of the semantics or rhetoric in English. And that is exactly the key point for a lecture to get the words across in an understandable way. First, in my videos, I started to label the slides in English and to speak with German text. As a result, many Germans did not understand the slides.

For this reason, I will be posting all of the text that I used in my last video in English here at Forex Factory. Then you know what the video is about and you can watch the video again in German with the English subtitles. If this goes down well with you, I will gradually post the texts for the remaining videos in English at Forex Factory. Many things may then become a little clearer. You are welcome to give me feedback on this.

Before we start, I would like to thank you once again for your great feedback that I have received from you over the past few months. A very special thank you goes to the following people who strongly supported my contributions.

mosiskv, lemercenaire, bigdee, rosalieone, Tobib80, renkotop, mattkirby, Sesamstrasse, simnz, Chris.GER, HiddenGap, charli86, FXsniper111, MathTrader7, ShanA, cocaco, forexnetworth, Shonx, ScALpipTaToE, RickM, RockRobb and slb.

Thanks again for your active help and support.


So now we start with the text of the new video

In today's post on scalping, we're going to check whether scalping is more efficient and whether it increases the risk.

Every beginner will have experienced the following situation. A course has risen sharply and we are looking for the optimal entry point in the pullback. Finally we found the right entry and put the stop below the last low. We determine the take profit from our previously defined money management. The price is actually moving in our direction and we expect it to hit take profit. Unfortunately, it turns out differently than we thought, and with luck we can get off before our stop. The conclusion after 2 hours in the market, a small loss and with luck even a breakeven. There was nothing except expenses. We sat in front of the screen for 2 hours and earned no money. I had to experience this situation many times at the beginning of my trading career.

Right before I started trading, I became interested in binary options. For example, you could bet $ 100 on a rising price and get $ 70 if you win. The same was of course also possible for a falling course. Unfortunately, the brokers at the time were able to set their own prices, which resulted in a large number of cases of fraud. The risk / reward ratio was also catastrophic. In this case you had to achieve at least a win rate of 70% to trade breakeven. What motivated me was that you could determine the running time. No matter if 1 minute 30 minutes or 1 hour. After just 1 minute it was clear whether you had won or lost. That was the only positive aspect of binary options. Nowadays they are banned in Germany, which from my point of view was completely correct. Over the years I tried to transfer the idea of quick profit to trading. This was only possible in the area of scalping.

In the trading market there are swing traders, day traders and scalpers. If I had to assign these three groups to a specific vehicle, the Swing Trader would get the S-Class, the Daytrader a Porsche and the Scalper a Formula 1 car. Scalping is the most demanding trading strategy, and it is not for nothing that Formula 1 in trading. Very few traders have become successful with scalping, but this was primarily due to the costs of the broker. You have all probably heard the famous sentence:

Back and forth empties pockets. Let's see if this statement is actually true.

A scalper pays a spread of 0.5, the stop is 2.7 and the TP is 3.2 pip. This results in a possible loss rate of 54.2% in the event of a random market entry. Why is that? Because the probability is significantly higher that the stop will be reached sooner than the take profit. The day trader receives the same spread, his stop is 14.6 and the TP is 15.1 pip. Therefore, the theoretical probability of winning here is 50.8%. As a rule, not every trader has such a favorable spread, but this is a basic requirement in order to be successful as a scalper.

We have all played Tetris or Mario Kart before and everyone knows that the longer you play these games, the faster the response times and the better you get. The greatest learning success is usually achieved when you play with friends. Two friends compete against each other on a tennis court to win the game. Player A has been playing for four years and has trained 1000 serves so far. Player B has also been playing for four years and has so far trained 10,000 serves. Both players have the same level of fitness and have had the same coach. Now if you had to bet on one of the players who would win the game, who would you choose? Of course I know that not only the serves decide a tennis match. The probability that player B wins is much higher here.

Imagine a rotten bridge connecting two mountains. 10 m below there is a raging river, it is raining and there is a strong wind. You now have the task of running to the middle of the bridge and stopping there. If you can do that for 1 minute you will receive 150 €, for 5 minutes 400 €, for 15 minutes 700 €, for 30 minutes 1050 € and for 60 minutes 1450 €. You can stand on the bridge for a maximum of 60 minutes, you can also step onto the bridge several times, but you have to pay a fee of € 5 each time. If you fall down all the money is gone. Person A stands on the bridge for 60 minutes and receives € 1,445 for this. Person B walks 10 × 1 minute on the bridge, has to pay 50 € fees and receives 1,450 € at the end. In principle, he deserves the same, but 50 minutes less risk to stand on the dilapidated bridge. Of course, he could theoretically stand on the bridge for 60 × 1 minute and earn 6 times more. The bridge is the synonym for our market when we are in trade and the 5 € our brokerage costs for 1 lot.

In the EURUSD, the average ATR in the M1 is 1.5 pip. The larger the unit of time, the higher the ATR. In the 30 minute range the ATR is 10.5 and in the 4 hour range it is 31.2. The pip value per minute is calculated from this. In the 1 minute range this is 1.5 pips per minute. In the 30 minute range this value is reduced to 0.35 and after 4 hours it is only 0.13. This is because of the zigzags a course takes to run up or down.

Let us now compare a trader who is in the market for 2 minutes with a trader who trades for 60 minutes. Incidentally, it does not matter in which time unit both act. In 2 minutes the pip value per minute is 1.35 and after 60 minutes it is 0.24. This results in the maximum possible number of trades within 1 hour.
If you were to complete the maximum number of trades, the potential would be 81 pips in the 2 minute range and 14 pips in the 60 minute range. This means that the gross potential at Pip is 6 times higher in the first case. Likewise, you could get as much pip within 12 minutes as the one who trades for 60 minutes. Even if you subtract the cost of 30 trades, you have 4 times more net. And for me that is exactly the reason why a trade that takes 2 minutes involves 6 times less risk than a trade that takes 60 minutes. Of course, the costs have to be deducted in each case.

There are 2 important factors in money management. The profit factor, which should be above 1, results from the probability and the CRV. And the winners and losers result in the decisive expected value per trade. It is interesting that as a scalper I don't necessarily have to complete more trades than a day trader to earn the same.

We are in the market for 2 minutes and trade 3.13 lots, the spread is 0.5 pip and the stop is 2.7 pip. The spread and the stop add up to 3.2 pips, and the TP is just as large. In this case, the risk of loss and profit is $ 100. The probability of loss is 54.2% and the earnings per minute are $ 50. We are in the market for 60 minutes and trade 0.66 lots, the spread is 0.5 pip and the stop is 14.6 pip. The spread and the stop add up to 15.1 pips, and the TP is just as large. In this case, the risk of loss and profit is also $ 100. The probability of loss is 50.8% and earnings per minute are $ 1.67. And now comes the big question? With the same risk, why should I only make $ 1.67 when I can make $ 50 per minute? The reason why many traders cannot afford this approach is because of the capital required. To trade 3.13 lots, a non-professional trader must deposit at least $ 10,416. In return, he has an extremely high level of capital security. As I showed in my last video, this also works with 7 times less capital. However, one should always make sure that the risk is limited to 1-2%.

Let's summarize briefly. If I have been trading for 60 minutes, the risk is 6.3 times greater from my point of view than if I have only been in trading for 2 minutes. If I trade for 2 minutes, I have 30 times the trading potential. We are able to make money 30 times faster. If there is a small breakout, it has a much stronger effect within 2 minutes than within 60 minutes.

Maybe some of you can still remember my paper airplane experiment. A paper plane is launched from the top floor of a high-rise building. Below is a person who is supposed to assess where the paper plane will land. The question now is: At what point can the person best estimate the landing radius of the paper airplane? The correct answer: When the paper plane is as close as possible to the person in question. We come to one crucial factor of probability. The closer your take profit is to the current price, the more accurate your forecast will be. As a scalper, I only have to see 2 minutes into the future, as a day trader I have possibly 60 minutes. From the perspective of probability, 2 minutes is easier to realize.

In the last few years I have carried out very complex calculations in EURUSD and have found that a large part of the price developments move within an equilibrium. Movement occurs only in 30% of the time, in 70% the course is in an equilibrium. If, as a day trader, I want to achieve a target of 15 pip in the M1, this is simply impossible in many price situations. As soon as I reduce the target, the probability of a successful trade is significantly higher. I try to end my trade after 2.5 minutes at the latest. I trade between 2 and 10 lots that equates to $ 1 million. I have also worked with significantly higher lots units, but there is a very high risk of being discovered. My TP is 3-5 pips. When I enter the market and the price suddenly moves 5 pips in my direction, I'm usually out immediately. Even if the price goes up another 10 pips after that, that doesn't annoy me. At 5 pips, I exceeded the average ATR three times. I am also looking for trades that can be reproduced again and again. An extreme outbreak is not one of them. My stop is 2 pips including the spread. Depending on how I get into the market, the stop can be reduced to 1.0 pip.

In order to trade successfully with such small stops in the long term, one has to work with stock market data that give a trader a deeper market insight. The decisive point, however, is the individual filter settings.

Let's get to the benefits of scalping

We take less risk and get more money in less time. It may increase the number of trades, which is also good training. With the help of the stock market data, I am even deeper in the market. My win rate is significantly higher and a small breakout is very effective in 2 minutes. In addition, I am able to trade in even the smallest equilibrium and sideways markets.

Of course there are downsides too

To be a successful scalper, you need fast response times. Under certain circumstances, losses can occur faster and the probability is slightly worse than in long-term trading. Since you have to be constantly focused, scalping is a little more strenuous. Due to the tones I developed myself, I don't have to stare at my screens all day, but listen as soon as the market changes in my favor. Exchange data are necessary for this and you either need a smaller margin or a higher capital, since a higher number of lots is traded. Let's take a closer look at the topic of higher broker costs.

The scalper trades 3.13 lots in 2 minutes, the spread costs 0.5 pip and the profit is $ 100. Without brokerage fees, the profit would be $ 115.63. The broker thus receives 13.5% of my profit. The day trader trades 0.66 lot in 60 minutes, the spread also costs 0.5 pip and the profit is $ 100. Without brokerage fees, the profit would be $ 103.31. The broker thus receives 3.2% of my profit. Since the scalper trades with a higher lot, he pays 5x higher brokerage costs, but earns 30 times more per minute.

Maybe I was able to show you that scalping is not quite as dramatic as you often hear. Basically, you can't say that scalping is more successful than day trading or swing trading. Every trader has to adapt his strategy and his setup to his personal sensitivities over the years. Not every trader is suitable for scalping, but you should give it a try.

Of course, the brokerage costs are significantly higher with a scalper than with a day trader. If I win 3.5 pips, the broker gets 0.5 pips of that. That is at least 13%. If you earn $ 100,000, the broker gets $ 13,000 of that. Of course you could get annoyed about it now, on the other hand you could also wish your broker that he will soon earn double that. And that would certainly not be to our disadvantage.

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I wish you a very successful trading week, keep my fingers crossed for great trades and I am happy if my tips help you.

Kind regards Michael

Hi Michael,

Another perfect round up of another tactical aspect of trading - just so happens to be my own style if trading.

As re the videos, I personally find that watching, then reading, then re-watching them as you describe is my favoured way of absorbing them.

I have been in this game for a long time - beginning as a (very) high time frame trader and eventually finding my true calling as a scalper once I moved out in my own - and this way certainly works.

Hopefully it does so for others also. That way you will be able to get into a groove in how you produce them.

It's also been a pleasure to offer encouragement to your venture, as I have previously noted, the sheer volume of simply outstanding information you post boggles the mind. I truly don't know how you do it!

All the best going forward and look forward to the journey.

Lem.