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Real or Algo

  • #721
  • Feb 23, 2021 4:54pm Feb 23, 2021 4:54pm
Quoting RickM
{quote} We still have a problem To have an trading edge of any sort within a market - we need plentiful supply of Passive limit orders HOWEVER WE DON"T HAVE PLENTIFUL SUPPLY OF PASSIVE LIMIT ORDERS IN FRONT OF PRICE - Liquidity is therefore always lagging in front of current price where major players intend it to go, so that's one edge right there. As for the Algo, at what price is it willing to exhaust in achieving its target, maybe 300 million dollars in spend funds to achieve its crazy objective?. So the biggest question needs to be asked now....

Don’t react when it tickles you... rule 1.
  • #722
  • Edited 5:25pm Feb 23, 2021 5:00pm | Edited 5:25pm
Quoting moodybot
That’s exactly it Pete. The first stage, I think, is to induce traders to ‘assume’ that price is heading off in a particular direction. Different traders different ideas. Some would call this consolidation... but all the SM want is an accumulation of orders, or let’s cut to the chase, stops, direction doesn’t matter. Eventually a threshold will be hit, the direction the Algo will take will be attracted to the heaviest side of stops. SM will fast track a move out of consolidation, eventually retracing back into or around starting point of...
I hate to be a party pooper but George's target idea is incorrect. Not only is it incorrect this proposition has led so many in search of the solution to his puzzle to be indoctrinated to see the algo action the wrong way.

For detox, remove targets from your mind. Now look at the chart of your favourite trading pair again. Can you tell what the algo is up to from Aussie Open to NY close yesterday? Start with yesterday. If you can't tell what happened 24hours ago, forget about what the algo will do today.

The big mistake everyone make is to try explain for everything that happened yesterday. That's not possible which ends up in overarched bs analysis. What you want to get at is to know where alpha sit on that yesterday's chart. That's all the trader has to know. Stop making the mistake of trying to figure out WHY it happen. Why does not give the trader any advantage. Looking back at any pair can you tell where alpha sits on yesterday's chart?

In this post I pointed out 2 common mistakes EVERY TRADER make.

1. Analyse and explain for everything that happen on the chart,
2. Explain WHY such and such thing happened on the chart.

The entire FF forum and all forums is laden with both this mistakes.

Avoid both mistakes. It's very hard thing to do because that's how ALL traders mind has been indoctrinated to think this way.

The trader does not need to know everything. The trader does not need to know WHY. Both of them will not contribute towards alpha.
Know what you trade
  • #723
  • Edited 6:50pm Feb 23, 2021 5:44pm | Edited 6:50pm
Quoting BWilliam
{quote}
I hate to be a party pooper but George's target idea is incorrect.
Not only is it incorrect this proposition has led so many in search of the solution to his puzzle to be indoctrinated to see the algo action the wrong way.

Hi BW,

These are good conversations you bring, imo.

Better than pop psychology attempts on some other threads.

So I can hear what you are saying, or trying to say, and I can agree with you up to a point.



But where there will be a disparity of ideas (well with myself, that is) is when you seem to suggest there can only be one way of understanding the market that will work for trading.

If you are not saying this then I apologise for misunderstanding.


But you again brought George into a conversation.

Not to validate your own ideas, but denigrate another’s ideas.


If you were to maybe say that your own way is more precise than other ways, then I can be in some agreement.

(Even without having seeing or knowing your particular methodology, but from your own firm conviction in what you say)
  • #724
  • Feb 23, 2021 5:51pm Feb 23, 2021 5:51pm
You have asked a question about the yesterday’s day open to NY close to see if any trader can ‘see’ what the algo did that day, and how it might be traded.

Let me suggest we look at USDCAD

(as that was a pair I did trade & past my usual bedtime as I hadn’t achieved my pip target for the day, as many pairs were in congestion).


I was able to utilise george’s targets as such as my PRIME concept and found I was able, again, to conduct my trading around them.


I am not trying to prove this way is even what traders should be assessing themselves.

Rather that there is more than one way to skin a cat in forex.


The targets first, then my simple trade later

If I had your grit & determination at a younger age than I am now, I may well have gone down the maths path that you have found success with.



.
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  • #725
  • Feb 23, 2021 6:07pm Feb 23, 2021 6:07pm
Quoting TimeTells
{quote} Hi BW, These are good conversations you bring, imo. Better than some pop psychology attempts on a few threads. So I can hear what you are saying, or trying to say, and I can agree with you up to a point. But where there will be a disparity of ideas (well with myself, that is) is when you seem to suggest there can only be one way of understanding the market that will work for trading. If you are not saying this then I apologise for misunderstanding. But you again brought George into a conversation. Not to validate your own ideas, but denigrate...
Let me explain why I wrote what I wrote in that post. Remember to remove me the writer, from your mind. Just read the content in all my posts.

There is a single algo if you believe that. There's no 2 algo. Only ONE. This algo is not connected to how any trader wish to trade the market. Both are seperate things and not connected at all.

Therefore since there's only ONE algo it means there's only ONE way this algo paint our chart.

Can we explain for WHY this algo paint our chart the way it does? Maybe, but not necessary. To explain for WHY this algo paint our chart the way it did, you have to delve into the instructional math that's coded in the algo. Are you still thinking algo or revert back to the traditional way of thinking? You can't have it both ways. Like I wrote in my last para of the first post, hybrid don't make sense.

Why I brought up George's idea about targets?

When anyone make such a proposition it becomes the central focus of attention. Targets become embedded in our minds as the key focus. This target idea is easily acceptable because it bears a lot of semblance to support resistance and supply demand.

Examine this target idea in detail what it means. What it's saying is there's this target that's written in the algo code. If this is true then such an idea have solved the mystery behind the algo, it won't be an illusion anymore. We should be able to tell what happened 24hours ago. Does it? No it doesn't, its not that simple else we won't call it an illusion.

The purpose to highlight this target idea is not to denigrate it thereby validate my "idea". This notion of ideas is moving in the wrong direction. This set the discussion onto the useless argument trail all the time. Remember there's only ONE algo that has no connection to anyone's idea. This algo does not know we exist. That's how it should be seen.
Know what you trade
  • #726
  • Feb 23, 2021 6:49pm Feb 23, 2021 6:49pm
Quoting BWilliam
{quote}
The purpose to highlight this target idea is not to denigrate it thereby validate my "idea". This notion of ideas is moving in the wrong direction. This set the discussion onto the useless argument trail all the time. Remember there's only ONE algo that has no connection to anyone's idea. This algo does not know we exist. That's how it should be seen.

Cheers BW, you have explained this well for me.

These are all good conversations, in my eyes, and hopefully for other Forex’ers as well, as we all wind our way down the murky paths - to the way home.

And George was very much the one algo theory himself.


I utilise targets as my trade plan overview consideration.

They are not s/d or s/r, in my eyes, but each trader will hold their own narrative as we have discussed before.


I should say in regards to Targets I have shown.

They are NOT, of themselves, my reason to enter any trade. NO.


There are many considerations, quite a few anyway, before eventually I see a trade option that is close & upcoming in the not too distant future.

Even then I will wait for a 2nd or 3rd confirmation as to direction.

Trade well, trade safe
all the best
  • #727
  • Feb 23, 2021 7:00pm Feb 23, 2021 7:00pm
Quoting TimeTells
You have asked a question about the yesterday’s day open to NY close to see if any trader can ‘see’ what the algo did that day, and how it might be traded. Let me suggest we look at USDCAD (as that was a pair I did trade & past my usual bedtime as I hadn’t achieved my pip target for the day, as many pairs were in congestion). I was able to utilise george’s targets as such as my PRIME concept and found I was able, again, to conduct my trading around them. I am not trying to prove this way is even what traders should be assessing themselves....
About UCAD, there's a main intraday algo level at 1.2605. The market is either trading above or below it. During the Powell testimony the market briefly spiked above the major algo level at 1.2625. Market was not expected to trade above that level yesterday. And more likely to trade below the 1.2605 level. Yesterday's market traded 60+% below this level.

The difference between algo level and targets or SR or SD is it reflects the "fair" valuation of the asset. Excursions at targets is the deviation from this value.

This means that if the trader focus on targets, SR or SD(the traditional technical analysis mindset) he does not have algo action or levels in his mind.
Know what you trade
  • #728
  • Feb 23, 2021 8:03pm Feb 23, 2021 8:03pm
Quoting TimeTells
If you were to maybe say that your own way is more precise than other ways, then I can be in some agreement. (Even without having seeing or knowing your particular methodology, but from your own firm conviction in what you say)
Since you brought up this word "precise" it's time to address the meaning of its usage.

The simple question to delibrate on is whether, let's say the target is 1.2630, there is this necessity to be precise right down to the pip or event point?

We have seen this precise idea mentioned in many threads, not just George.

Are there any extra benefits for being so precise to the pip?
Does such precision add credence to the main idea?
Does this suggested level of precision contribute towards the net alpha that we seek?
Is there a downside to bear this burden of precision?

This proposed "precise" idea has not been examined in detail to understand the role it plays. There's very little discussion on this subject, instead this forum has accepted the implied "values" without close examination. Imv this is the 3rd common mistake.
Know what you trade
  • #729
  • Feb 23, 2021 8:10pm Feb 23, 2021 8:10pm
The whole topic of Algo (and targets) is a fascination to me.

In intraday trading I have to be more nimble if you like (I have grabbed a little already).


I look at the daily open for any big structure targets



But I can trade towards targets if the “immediate” price activity suggests a probability that might eventuate.

This is not maths based. Which would itself give its own probabilities of occurance.


[It’s not that I don’t trust the market to do what probability suggests 80/20 rule (but I have been burned before lol so am VERY wary of how long I stay active in one trade).]


It all seems algo run to me on the big picture.


.
Attached Image (click to enlarge)
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  • #730
  • Feb 23, 2021 8:11pm Feb 23, 2021 8:11pm
But what the algo does in & around the sessions seems like a ‘building’ of lots both longs & shorts until it suits the algo to release in its desired direction.

(See monthly AUDJPY chart below for the gap up and drop almost 2 years ago, which is now imminent)
(This pair sat for the past 2 full days in a tight range).
(I imagine there would be institutional stops sitting at or above these “impossible” two plus year old targets)
(Will they be taken out today, or later, or NEVER, who knows)


The AUDJPY now sits 20 pips from the major target of 2½ years ago, but price has already done its 60 pip ADR today - is that the end)

Let’s see (watch I mean, be careful traders there are no guarantees) what happens in the remainder of triple swap Wednesday and who the algo has currently caught in relation to where some massive institutional stops may lay.


Who is running the show, the institutional houses fighting to save their stops (IF they even exist, lol), or the ‘unlimited’ algo that can do whatever it wants as it IS the ultimate liquidity.

I’m finished with this pair today but will observe now, and is my recommendation just watch.


.
Attached Image (click to enlarge)
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  • #731
  • Feb 23, 2021 8:17pm Feb 23, 2021 8:17pm
Quoting BWilliam
{quote}
Are there any extra benefits for being so precise to the pip? Does such precision add credence to the main idea? Does this suggested level of precision contribute towards the net alpha that we seek? Is there a downside to bear this burden of precision? This proposed "precise" idea has not been examined in detail to understand the role it plays. There's very little discussion on this subject, instead this forum has accepted the implied "values" without close examination. Imv this is the 3rd mistake.

I will look forward to this discussion BW.
  • #732
  • Edited Feb 24, 2021 4:04am Feb 23, 2021 8:28pm | Edited Feb 24, 2021 4:04am
Quoting TimeTells
But what the algo does in & around the sessions seems like a ‘building’ of lots both longs & shorts until it suits the algo to release in its desired direction. (See monthly AUDJPY chart below for the gap up and drop almost 2 years ago, which is now imminent) (This pair sat for the past 2 full days in a tight range). (I imagine there would be institutional stops sitting at or above these “impossible” two plus year old targets) (Will they be taken out today, or later, or NEVER, who knows) The AUDJPY now sits 20 pips from the major target of 2½ years...
AUDJPY is a good case study.

There's a huge move last Friday, 4 days ago. Early Aussie session week open 3days back there's a brief spike going into Tokyo open. Then nothing significant happened between then and this morning, again Tokyo open. That's the algo in action. With that huge move the Algo took 3 and half days to "recalibrate" before it made the next move this morning.

Talking about patience and traders psychology, is there any trader out there who has this "patience" to wait 3 and half days for the next market move?

This algo illusion has nothing to do with traders "patience". Citing "patience" or traders psychology is completely disconnected to what the algo paint on our chart that does not know about our existence. 4th common mistake.

Edit - First time I share the way I view the forex market from this single algo perspective. Ofc we all have our own different povs.
Know what you trade
  • #733
  • Feb 23, 2021 10:26pm Feb 23, 2021 10:26pm
Honest member wrote honest observation and opinion.
https://www.forexfactory.com/thread/...7#post13424307

Buy low, sell high is the biggest bs spread by this trading industry. The inverse idea is the high and low are unlimited proposed by the math boyz. Two opposite extremes that dominate every traders mind with fear and greed. That's why almost every trader is a fade the extreme trader.
Know what you trade
  • #734
  • Edited 12:41am Feb 25, 2021 12:26am | Edited 12:41am
Quoting BWilliam
{quote} Let me explain why I wrote what I wrote in that post. Remember to remove me the writer, from your mind. Just read the content in all my posts. There is a single algo if you believe that. There's no 2 algo. Only ONE. This algo is not connected to how any trader wish to trade the market. Both are seperate things and not connected at all. Therefore since there's only ONE algo it means there's only ONE way this algo paint our chart. Can we explain for WHY this algo paint our chart the way it does? Maybe, but not necessary. To explain for WHY...
If this Algo does not know we exist, then its not chasing our liquidity.

Therefore what is the point of the Algo in the first place?

Considering there is one trade a day by the big player and only 10 trades on average a day offered by the block of traders we call the market makers - why don't they just pick up the phone and tell their mates Larry is buying at 4pm.

BWilliams, in your words - What is the purpose of the Algo?
Trading thin liquidity at the boundary of the charts
  • #735
  • Edited 1:52am Feb 25, 2021 1:02am | Edited 1:52am
Quoting RickM
If this Algo does not know we exist, then its not chasing our liquidity. Therefore what is the point of the Algo in the first place? Considering there is one trade a day by the big player and only 10 trades on average a day offered by the block of traders we call the market makers - why don't they just pick up the phone and tell their mates Larry is buying at 4pm. BWilliams, in your words - What is the purpose of the Algo?
Tbh I have not thought about the purpose of the algo, the WHY. I focus my research work on the math behind the algo because that's what allows me to obtain alpha over the market. That's my only intention so far. I see no advantage whether we know the WHY or not. It goes deep into speculation to offer a reason for the cause.

In my conversation with TimeTells I wrote my opinion here.
https://www.forexfactory.com/thread/...7#post13385797
https://www.forexfactory.com/thread/...5#post13385805
Know what you trade
  • #736
  • Feb 25, 2021 1:52pm Feb 25, 2021 1:52pm
Quoting RickM
{quote} If this Algo does not know we exist, then its not chasing our liquidity. Therefore what is the point of the Algo in the first place? Considering there is one trade a day by the big player and only 10 trades on average a day offered by the block of traders we call the market makers - why don't they just pick up the phone and tell their mates Larry is buying at 4pm. BWilliams, in your words - What is the purpose of the Algo?

Hi RickM

When your stating
Quote
one trade a day by the big player and only 10 trades on average a day offered by the block of traders we call the market makers
- are you specifically calling out one pair? Or this applies to all pairs?


Thanks,
Almo
  • #737
  • Feb 25, 2021 5:07pm Feb 25, 2021 5:07pm
Just skimmed this thread...very interesting material. Couple of thoughts:

1. Janet Yelled, the US Secretary of the Treasury, is responsible for currency valuations of the US$. She is not an algo.
2. Jerome Powell, the Chairman of the US Federal Reserve, uses his powers to maintain an orderly forex exchange for the US$. Jerome and his army of fed traders are not algos.
3. Tier 1 banks (along with tier 2 and 3 banks), perform about 75% of US$ transactions, and are required by the Fed to do so in an orderly fashion. While these banks make use of algos, they would never allow an algo to take control of anything.

Now, take this picture of the US and replicate it in Europe. Japan, Australia, Canada, China, etc. These people are running the forex, and forming the candles on your chart.

Consider this: as all these individual interests are running around doing their jobs, they are prohibited by law from picking up a phone and calling their counterparts at other banks (doing so gets them first fired and then put in jail) to collaborate on their trades. But, they can, and do, use their financial muscle to move candles around, signaling intent and desire. It's up to the rest of the bank traders to accept or decline the moves. Look at this week's PA on the G$ as an example of the discussions amongst bankers. There are literally dozens of moves/rejections, and moves/agreements, to underscore the ongoing narrative. Trade the narrative.
  • #738
  • Feb 25, 2021 5:25pm Feb 25, 2021 5:25pm
Quoting GEfx
Just skimmed this thread...very interesting material.
Couple of thoughts:

1. Janet Yelled, the US Secretary of the Treasury, is responsible for currency valuations of the US$. She is not an algo.



Let me get this right, in case I make a mistake.

Are you saying Janet Yellen sits at a desk with her MT4 screen and moves the price around herself with a mouse?


and wiki:
Between 2018 and 2020, Yellen had received over $7 million in speaking fees from financial companies such as Barclays, Citigroup, Goldman Sachs, and the hedge fund Citadel after leaving the Federal Reserve.

(An arm of the hedge fund Citadel is also one of the largest global forex Liquidity Providors / Market Makers)


She keeps interesting company!

Does anyone in that group of her benefactors use an algo I wonder?


(just a bit of fun, this morning, that's all )
  • #739
  • Feb 25, 2021 5:32pm Feb 25, 2021 5:32pm
Quoting TimeTells
{quote} Let me get this right, in case I make a mistake. Are you saying Janet Yellen sits at a desk with her MT4 screen and moves the price around herself with a mouse? and wiki: Between 2018 and 2020, Yellen had received over $7 million in speaking fees from financial companies such as Barclays, Citigroup, Goldman Sachs,...

My reply to Gefx would be human greed would have caused a global meltdown, that would be inevitable with humans controlling the market. I think just to dangerous.
Yes I agree the market is very closely controlled but the data we receive for trading the Forex is an Algorithm, there is just too much at stake leaving it to human input.
I’m open to other theories but for us, we trade an Algo.
  • #740
  • Feb 25, 2021 5:54pm Feb 25, 2021 5:54pm
Quoting moodybot
{quote} My reply to Gefx would be human greed would have caused a global meltdown, that would be inevitable with humans controlling the market. I think just to dangerous. Yes I agree the market is very closely controlled but the data we receive for trading the Forex is an Algorithm, there is just too much at stake leaving it to human input. I’m open to other theories but for us, we trade an Algo.
In recent history, markets melt down because humans temporarily lost control of the algos. The rest of the time, humans control markets, and always have. Market theory explains why greed doesn't lead to meltdowns. And meltdowns are rare in the forex because central banks and national treasuries are in control (the SNB notwithstanding).
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