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Real or Algo

  • #921
  • Mar 7, 2021 1:14pm Mar 7, 2021 1:14pm
Quoting GEfx
{quote} Looks like this thread has devolved into a typical Forex Factory "This market is rigged to take your money!" whine session. Usually the culprit is the brokers, or randomness, or the bankers, who are running stop sweeps, or tricking you by using certain chart patterns, etc. So now the culprit is an all powerful, all knowing algo. This is the logical next step in the evolution of a Forex bogyman. OMG...LMAO. This bolded question above caught my eye. I think we know why retail forex traders lose: they are abused by the algo, pure and simple....
To be honest mate, this is the first post on the thread that has reached the usual level of Forex Factory.
  • #922
  • Mar 7, 2021 1:41pm Mar 7, 2021 1:41pm
Hi All
When you think about Forex for a long time, many ways will come to your mind, one of them can be mathematics, it is time that nothing will affect our mind.
Technical and fundamental analyzes have expired, price and price are important
It knows that wherever it goes, we will be with it.
In a word, pure mathematics on
The trend and the type of market are not different for us, what is important is that we are not afraid of losses, if our position is against the trend, we will bravely close it and trade in the direction of the trend.
Technical and fundamental analysis have been criticized
What is needed is an understanding of the nature of the market that is always moving in the right direction
  • #923
  • Edited 2:53pm Mar 7, 2021 1:57pm | Edited 2:53pm
Algo or not. But something not serious text, for sunday and start of trading week.

Every night, several times a night, Uber and Lyft drivers at Reagan National Airport simultaneously turn off their ride share apps for a minute or two to trick the app into thinking there are no drivers available---creating a price surge. When the fare goes high enough, the drivers turn their apps back on and lock into the higher fare. …

“All the airplanes we know when they land. So five minutes before, we turn all our apps off all of us at the same time. All of us we turn our apps off. They surge, $10, $12, sometimes $19. Then we turn our app on. Everyone will get the surge,” one driver says.
This driver explains how they organize it.
“Someone is standing by that corner. I stand by this corner and the other one stands at this corner and we say turn the app off and then go online."

https://www.bloomberg.com/opinion/ar...-will-cost-you

An article in link ends:

"Any index based on transactions can be manipulated by doing uneconomic transactions. But it is risky and expensive, and probably won’t work if there are enough real transactions to offset your manipulative ones. (People tend not to manipulate, like, the S&P 500 Index.) An index based on a *survey* is infinitely easier to manipulate; you just say a fake number in response to the survey"

Can we see real transactions where orders are. Most banks offer corporations fx desk, same kind of buy side software which still are using methods like a VWAP and TWAP. Many court cases gives some hint how LP,MM algos behave when you tickle them, not need huuuge ammount of money. Spoofing makes price matching price discovery algos crazy as they CEO's when they see somebody is f.. with them.

Are all economist mathematics in institutions using same models from academic world for calculate how everything are interlinked together, interest rates,commondities and where price should be if something is moving. So it will look like a human algo (uber drivers) or comps.
  • #924
  • Mar 7, 2021 3:12pm Mar 7, 2021 3:12pm
Quoting BWilliam
{quote} There's a difference in saying algo exist and understanding them. I would much prefer to take back all my writings about understanding them. It put me in an unnecessary bad position in this discussion due to the implications thereof. So please ignore the understanding part that has no relevance to whether it's real or algo. Let's move on from here. If its true about this algo, then can traditional technical analysis be useful in this single algo facilitated market? This is the discussion this thread should be brave enough to explore. It...
Technical analysis is good until the dynamics change or after a string of losses. TA on it's own is like chasing one's tail. Most times you are right on the money but can you hold for price to eventually go your way? I am more interested in how Algos interpret market structure, to me that's the last piece of the puzzle. Open to more insights from you.
Read in between the price!!!
  • #925
  • Mar 7, 2021 3:16pm Mar 7, 2021 3:16pm
Quoting GEfx
{quote} In part, I agree with your statement. Banks use lots and lots of algos in their FX trading. Their use augments the bank's strategy and operational procedures, and in most ways, automate their trading processes. These processes, now automated, are the same processes that human traders performed, and adhere to the banks operational rules and procedures, as they manage the banks FX book. Kind of a circular logic flow, right? If you understand the processes and procedures at the bank, you understand what the algos are doing. As I have stated...
The above bolded statement, I do not understand the processes and procedures at the banks. This is what I and perhaps others on this thread would like to learn. One trader can spend years looking at a chart screen and see nothing while another can deduce a lot in a few hours. Looking forward to your input.
Read in between the price!!!
  • #926
  • Mar 7, 2021 3:31pm Mar 7, 2021 3:31pm
Quoting kk100
Algo or not. But something not serious text, for sunday and start of trading week. Every night, several times a night, Uber and Lyft drivers at Reagan National Airport simultaneously turn off their ride share apps for a minute or two to trick the app into thinking there are no drivers available---creating a price surge. When the fare goes high enough, the drivers turn their apps back on and lock into the higher fare. … “All the airplanes we know when they land. So five minutes before, we turn all our apps off all of us at the same time. All of us...
Every night, several times a night, Uber and Lyft drivers at Reagan National Airport simultaneously turn off their ride share apps for a minute or two to trick the app into thinking there are no drivers available---creating a price surge. When the fare goes high enough, the drivers turn their apps back on and lock into the higher fare

Hi Karl

Some traders assume the big players play tricks like removing orders from the market at critical times to get price to react as they wish. There would be no way us small guys could ever prove the big players are performing this strategy or not but we can prove the opposite.
We can see when they dump massive orders onto the chart and see price react accordingly.
I can tell you last week on these three pairs EURUSD, AUDUSD, GBPUSD - on occasions when a group of large orders had just been placed on a chart, price reversed in 98% of occasions.
That reversal may have been major or minor but it proves without doubt two things to me.

1.. Liquidity on a chart is very thin because the amount to turn a market averages only the amount of volume you see in 10 average 1 minute candles.
2.. They communicate to each other whos trading because the size of their trades is their signature.

Cheers
Trading thin liquidity at the boundary of the charts
  • #927
  • Mar 7, 2021 3:35pm Mar 7, 2021 3:35pm
Wow a good sleep lol on Sunday night, and I wake up and the thread has exploded.

Yes these are all good discussions and opinions.



So, I agree with George. But I had to think on it. For months.

And therefore I agree with BW also on the algo.

I can 'visualise' (yep that's all I got) the extraordinary suggestion that there is (not JUST the many algos floating around on each trading desk) but some single prime Algo.




This is a deep rabbit hole I know lol. Should we continue I don't know.

There will be 2 camps. Has to be.

One the traditional camp.


One the MM - slash - algo -slash = The Matrix camp.

And it's gonna be hard to see the Matrix, if you don;t actually see it.


It's way too much effort to type all this, which is why George went to Skype and even then it would take him one and a half hours to get through it all.


Let me quickly say what the algo is not, while I have my cup of tea.


The Algo (let's just call it that) is NOT - in my humble opinion - a big, bad, bogeyman out to get you.


Initially it was thought to be that. Now I see it as the only functional way the FX market could operate in these hi-Tech times.

(I remember the days when I got put in solitary for 7 weeks here on FF for supporting FractalFreaks thread contention that there was an activity called Smart Dumb which played on Dumb Money - retail. Yes some people on FF actually made the error stating I was just Fractal under a new username. ffs lol. Cheers to Andy/Moody for being the first in taking the time to get to know me and to clarify that mistake).


So moving on from Fractal (we never even spoke) I fluked meeting George in the now defunct Traders From Australia thread. I said Hi George, we then PM'd but he doesn't type so he asked for a Skype chat. Sure, why not I thought, I hadn't Skype'd before so I installed it and off we went.

On our first chat George did to me what I later realised he did to everyone when first talking to them. (Nothing yet about the algo lol).


He asked me to explain to him what was happening on a naked chart, with price.

I didn't really understand his question, so just trotted out traditional industry jargon like, looks like buyers came in there and price went up and over there sellers came in and price went down.

George came straight back at me, no mercy, no holds barred, and said his terrific line lol.

"Oh, so you're still just a baby sucking milk."

Now a lot of folks he talked to after that, saying the very same line, got all upset as their ego was attacked and they responded accordingly.


Me, well I've seen and heard most things during the 15 years I spent as a Customer Service Mgr in the PC servicing game (we serviced Banks like Westpac and I even personally serviced their Dealing Room 4 floors underground, in Nth Ryde then, in the late 80's without having even heard of Foreign Exchange Currency trading - which the teams were doing in that 'bunker' lol).

So. I wan't perturbed or upset at all by what George said to me about still being a baby, sucking milk lol.

I simply asked him why he said that.

He replied that he meant I was not "ready" yet for solid food (like a baby isn't) as I was yet to have seen what he called The Reality of the market.

It was an interesting Skype call I can assure you.

I'll have some brekky.


I will also give some reply, though not meant to convince or change GEfx's or anybody's mind about the algo, but about Citibank and their massive FX profit.

Citibank, as I understand it, are a Liquidity Provider to lower but prime LPs that service the broker's who we deal with in retail via our brokers.

In fact I might even suggest that ALL the profits in FX (bar some well heeled, knowledgeable and or lucky trader's) are made by these LPs, and NOT retail traders. Can I prove it, no. But keep an open mind pls.

And if the top tier LPs run algos, maybe they run one algo (all attached to it lol), and IF so (yep, just speculation, so just IF), but IF, then yes - an Algo can make money. (I doubt Citi made money from 'trading' FX the same way we all trade, as retailers, chosing a buy or sell here or there, but I speculate again)

(And if the LPs make money, then where and from whom).

Resting, lol.
  • #928
  • Mar 7, 2021 5:57pm Mar 7, 2021 5:57pm
Quoting TimeTells
Wow a good sleep lol on Sunday night, and I wake up and the thread has exploded. Yes these are all good discussions and opinions. So, I agree with George. But I had to think on it. For months. And therefore I agree with BW also on the algo. I can 'visualise' (yep that's all I got) the extraordinary suggestion that there is (not JUST the many algos floating around on each trading desk) but some single prime Algo. This is a deep rabbit hole I know lol. Should we continue I don't know. There will be 2 camps. Has to be. One the traditional camp. One...
Hi TimeTells, I am in the camp that this master algo is not out to get you.

Imo most of banks forex profits do not come from directional prop forex speculation. Since the collapse of Barings Bank in 1995, the regulators and in-house compliance have imposed strict requirements in this segment where resource allocation is in line with risk.

Similar to George, I am crucified for expressing understanding of the math behind the algo due to the implications eventhough I have not used strong language like "milk sucking baby". I am not surprised by the strong defensive rejection and I have explained it as well.

In fact, I have asked repeatedly the usefulness and effectiveness of traditional TA IF this forex market is indeed facilitated by a single master algo which is tasked to paint illusion on the chart. This, to me, is the main goal of this discussion whether it's real or algo.
Know what you trade
  • #929
  • Mar 7, 2021 6:10pm Mar 7, 2021 6:10pm
Quoting BWilliam
{quote}
Hi TimeTells, I am in the camp that this master algo is not out to get you.



Good, cheers.

It’s not out to get anyone imho either.


But it operates on a set algorithmic behaviour as I see it.

Which the market would have to, else it could go renegade. Currency pairs are are NOT GameStop stock shares that can rise and fall to infinity (and beyond lol) on a whim.


The FX is a market, yes, that fluctuates from day open to day close, which would have to remain within certain boundaries as it relates to International Trade.

(These boundaries are not Bollingers, bands or Enevelopes as such but must exist in some format imo).


And then even with the so called ‘currency wars’, and the dropping of interest rates to zero etc, the currencies are always overseen by the CBs.

And we know which CB is the prime CB of them all - especially after the 2008 Global Financial Crisis - where the FED anecdotally doled out some $110 trillion to banks around the world, Europe especially, and with ONE bank reported to be in Australia.

(The Oz bank was never named but I speculate that it was not one of our big four commercial banks, or lower, leaving one only major bank player in Oz that was assisted with a resupply of ‘paper’ liquidity at the time to re-instill confidence back in the sector - and now seems beholding to its parent CB in some way).
  • #930
  • Mar 7, 2021 6:13pm Mar 7, 2021 6:13pm
In fact, I have asked repeatedly the usefulness and effectiveness of traditional TA IF this forex market is indeed facilitated by a single master algo which is tasked to paint illusion on the chart. This, to me, is the main goal of this discussion whether it's real or algo.


BW, I will add something later to the discussion you added (lol) to your original post.

As I still figure some form of TA can be useful, once we get to a point where we have indentified how the algo (for those that could visualise such a thing) actually moves around our charts. And why it would do so.
  • #931
  • Mar 7, 2021 6:23pm Mar 7, 2021 6:23pm
Quoting calebfx
Technical analysis is good until the dynamics change or after a string of losses. TA on it's own is like chasing one's tail. Most times you are right on the money but can you hold for price to eventually go your way? I am more interested in how Algos interpret market structure, to me that's the last piece of the puzzle. Open to more insights from you.
(This post will get me into trouble again due to the implications of understanding the math behind the master algo.)

This master algo operate based on math logic that's written in the code. The reason why I use this word "illusion" is because if anyone don't know this math logic it appears as illusion to him. This math logic does not obey the auction market supply and demand laws of buyers and sellers. If it did we won't be confused by this illusion. This means we can't use supply demand logic to interprete the chart. It's disjointed and disconnected.

By extension, the extire strategy section of this forum is rendered useless which has some form of supply demand application. This is a serious implication.

Conversely, any person who understand the math logic does not see the algo activity as an illusion. The yardstick he uses is in line with the algo math logic. He sees the chart through a different lens. A parallel analogy is soldier's armed with sophisticated night vision devices fighting in pitch black darkness. Watch Apache helicopter pilot fighting the enemy YouTube videos. Those guys use algo math while the enemy use traditional TA.
Know what you trade
  • #932
  • Mar 7, 2021 6:44pm Mar 7, 2021 6:44pm
I've been lurking on this thread for a while, and, admittedly, enjoying it.

Adding this tidbit to the 2008 bailout info from way back when: "US Senator Warren states that none of TARP’s administrators seem to be keeping track. And the panel found a big imbalance in the global bailout effort: the U.S. rescue gave money to 700 banks all over the world. Warren says the other developed countries’ bail-out packages combined reached fewer than 50."

Thoughts on real or algo: I've often wondered if human nature is so predictable, trading could look like an algo because the market makers supposedly move a market off of the trader's fear and greed between take profit and stop loss points on the chart so they, the mm's, can make the most money while they're doing their job of facilitating trading.

So, do humans naturally live, err, trade, within a limiting math structure? Apparently, the social media and big data companies believe this to be true as they try to put us all into statistical groups for marketing/manipulation purposes.

I have no idea, but have enjoyed reading the discussion and thinking about the concept of a master algo.
  • #933
  • Edited 6:56pm Mar 7, 2021 6:46pm | Edited 6:56pm
Quoting BWilliam
{quote}
This master algo operate based on math logic that's written in the code.
The reason why I use this word "illusion" is because if anyone don't know this math logic it appears as illusion to him.
This math logic does not obey the auction market supply and demand laws of buyers and sellers.
If it did we won't be confused by this illusion.
This means we can't use supply demand logic to interprete the chart.

Yes, again I agree.

I will put up one of my 'boring charts' and maybe for the very last time, as promised before lol.

These Targets that I mention, I do not agree in ANY way that they represent Supply or Demand, or Support & Resistance.
People have been conditioned to think of them that way.

(I thought for months on this one and couldn't work out who was doing the supplying and who was doing the demanding - I didn't reckon it was retail traders).


I visualise the targets (and they ARE fractal on the timeframes) as being where the algo (if we call it that) is going to go - at SOME point.

And there is always a target below AND above current price,
and that is where trader's can get themselves in a bind (DD).


Having a bias for direction means you are "telling yourself" where the algo will go. THAT is ego.
So that is NOT really Technical Analysis, because if anyone shows me their TA with their indis or whatever they use for TA then i think 'could' build a case (weak or strong, I cant say) for the opposite direction of a price move also being a 'possibilty'.

And IF there is a possibilty of price going either up or down, then that can have a TA "Probability" attached to it, which makes it speculation controlled (hopefully) by a trader's Risk Management. So TA could be viable with a probabilty element to it. (risk vs reward)

I could even show (no not show, but State as my 'belief' is better) that if you think of price movement being a 50% chance of going up or down,
then with Algo Belief (lol) that can change immediately to a 66% chance in your favour
(I'm thinking 2/3rds so PLEASE don;t let's play maths or word police on me as we explore all this).

So if the algo plays tricks
(well an illusion actually - and we can talk about WHY that might happen naturally rather than conspiratorily)

then to change a 50/50 outcome to 66/33 is 'possible' lol
(like in the Monty Hall, Game Show, Pick A Box brain teaser)

Then maybe work on this one in your mind for a while
(as I tried to lol - and I will not justify this at all - its just using your mind as a tease - and it might take days or weeks till you say yay or nay one way or another)

So if you believe in the algo (that has to BE)
and not the traditional Supply & Demand auction we are taught then,
my simple statement is this
(and it has been said way before me by other students of the markets and forex)

If price is going to go up
Then it will go down first


.
Attached Image (click to enlarge)
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  • #934
  • Mar 7, 2021 6:51pm Mar 7, 2021 6:51pm
Perhaps the traders who find a way out of or around the limiting structure, whether the structure is human or algo, are the ones who become consistently profitable?
  • #935
  • Mar 7, 2021 10:21pm Mar 7, 2021 10:21pm
Quoting TimeTells
Yes, again I agree. I will put up one of my 'boring charts' and maybe for the very last time, as promised before lol. These Targets that I mention, I do not agree in ANY way that they represent Supply or Demand, or Support & Resistance. People have been conditioned to think of them that way. (I thought for months on this one and couldn't work out who was doing the supplying and who was doing the demanding - I didn't reckon it was retail traders). I visualise the targets (and they ARE fractal on the timeframes) as being where the algo (if...
Hi TimeTells, here are the limitation of George's target idea.

1. What's the next intended target ?
2. As an intraday day trader and practitioner of George's target what am I suppose to do now or today ?
3. Is there a step by step live market practical to do list with George's target ?

I've only asked the general broad based questions.
Attached Image (click to enlarge)
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Know what you trade
  • #936
  • Mar 7, 2021 11:37pm Mar 7, 2021 11:37pm
Quoting CashBox
Perhaps the traders who find a way out of or around the limiting structure, whether the structure is human or algo, are the ones who become consistently profitable?
Hi Cashbox

The structure is created by big players, not Algo’s to ensure traders keep in the game. But more importantly, they clean out the last current accessible orders with a acute liquidity run (ALR) to ensure a pullback occurs to trap more traders into a losing position.
All the evidence is in their if you can see all the bids and asks of the order book from the futures market.
They appear to make their money by trapping traders during the journey and destroy them at their destination.
Therefore after years of backtesting, I have found it’s best to trade against big players when they perform these high volume ALR’s and beat them just about every bloody time.
Look at the Sales tape

Cheers Rick
Trading thin liquidity at the boundary of the charts
  • #937
  • Mar 7, 2021 11:45pm Mar 7, 2021 11:45pm
Quoting BWilliam
{quote}
2. As an intraday day trader and practitioner of George's target what am I suppose to do now or today ?
{image}

Hi BW,

Ask George.



(Or as George might likely answer you -

Go back to Page One, on the First Thread.
And do your homework.
Don't be so lazy.
You are being like a baby still suckling milk
9,999 hours still to go for you )
  • #938
  • Mar 8, 2021 12:05am Mar 8, 2021 12:05am
This is Profitfarmer's contribution to my post above. The more point of views in this discussion the better.
https://www.forexfactory.com/thread/...4#post13441634

The answers my perspective, not the posted chart only, but any. ( can agree or disagree, np):

1. Don't know. Can't know ( until the direction becomes clearer) But not important. (Bcos...#2)

2. Wait to see what target comes to play ( predict (Q#1) or react?)

3. Yes. The so called " riddle" was ( can't attach image to mail) about to introduce session time, range into the decision making.
in fact, George settings of TMA were reflecting this too, X minutes a day ( 24 hours), Y a session...( 3x 8 hours); just as many as Minute Candles, for the m1 TMA template, and different one for HTF.
To simplify the rest, examine price and TMA near target, in light of the "riddle"...

General broad based answers.

Cheers
Z
Know what you trade
  • #939
  • Mar 8, 2021 12:20am Mar 8, 2021 12:20am
Zoltan, you are a good bloke.

edit: an hour before Frankfurt I'm just sitting calmly, waiting to see how the big centres (inc London) open
(on six pairs, all majors, except for GJ which I can view also).
  • #940
  • Mar 8, 2021 12:25am Mar 8, 2021 12:25am
Quoting TimeTells
{quote} Hi BW, Ask George. (Or as George might likely answer you - Go back to Page One, on the First Thread. And do your homework. Don't be so lazy. You are being like a baby still suckling milk 9,999 hours still to go for you )

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