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The brutal truth of day trading

  • #441
  • Apr 26, 2021 12:16pm Apr 26, 2021 12:16pm
Quoting jmn5611
I am not aware of DOM traders in FX, but if it exists, a trader can recognize an order imbalance because the one side will get thinner than the other and will stay that way for a short period of time.
It's kind of impossible to get an exact DOM with Forex since it's decentralized, but you can still get a good idea of it if you have the right tools, personally I choose to use different data for my edge, but to each is own.
  • #442
  • Edited 2:47pm Apr 26, 2021 2:33pm | Edited 2:47pm
A few years ago I worked with a British mathematician on a problem to be able to break up the market into data that describes price as being either positive delta in a bullish move or negative delta in a bearish move.
I wanted to be able to define price as either being in a positive state or a negative state for use in some Algorithms I was developing.

I didn’t expect there would be one answer and expected all markets would have different values or no correct value at all.

I Kept asking myself why I couldn’t find other research papers on this topic and guessed there wasn’t any answer to my question and it was just random in nature.

It turned out there is one answer for all forex pairs and the markets do have a frequency that goes back mathematically 30 years (start of data in the tests).

The tests were only perform on the area or time frames surrounding the order books where the orders are seen to be executed.

The answer is ........ seconds

Price is either positive delta in nature or negative delta in nature long before the Bids or Asks show actual positive or negative values.

I believe this key information gives me an unfair advantage when trading, but that’s just my opinion.
Trading thin liquidity at the boundary of the charts
  • #443
  • Apr 26, 2021 3:02pm Apr 26, 2021 3:02pm
I have looked at the depth of market, and in some markets which aren't as popular you can pick up the large buyers coming in on spot fx. For me I'm picking up large volumes - 30 minutes before New York opens on the EUR/GBP - last Thursday and Friday. I don't have a footprint charting package but the amount of buying in the market I don't need one. My DOM figures are crude in comparison to jigsaws charts, I think they could give a trader a massive edge.
  • #444
  • Apr 26, 2021 3:23pm Apr 26, 2021 3:23pm
Quoting Londonpip60
I have looked at the depth of market, and in some markets which aren't as popular you can pick up the large buyers coming in on spot fx. For me I'm picking up large volumes - 30 minutes before New York opens on the EUR/GBP - last Thursday and Friday. I don't have a footprint charting package but the amount of buying in the market I don't need one. My DOM figures are crude in comparison to jigsaws charts, I think they could give a trader a massive edge.
Hi Londonpips

I agree with you that increasing volume is key in deciding when a good time to trade is.

We shouldn’t however confuse large volume coming into the market as directional signals until we can establish a breakout has occurred with strong imbalance signals that are rejected by the market.
It seems the market likes to trap big orders from bankers by reversing the market in the opposite direction.
Therefore the first move after London is often a trap so consideration needs to be on trading with care 30 minutes around the opening of the London market.

The large volume does not come from bankers but from the herd of traders. That’s the mass of breakout traders and reversal traders hoping to avoid capitulation of their equity accounts.

A nice run can last the whole session so we shouldn’t jump in with gumboots on until direction is obvious, that’s my plan anyway.

Again I am just offering you my opinion which you may discard if you think it’s of little value.

Cheers
Trading thin liquidity at the boundary of the charts
  • #445
  • Apr 26, 2021 3:29pm Apr 26, 2021 3:29pm
"The devil is in the details"

You have heard this before but you continue to ignore the "details". (The tails)

"The trend is your friend"

But not all trends are the same!
Many friends are going to betray you!
So pick wisely!
  • #446
  • Apr 26, 2021 3:48pm Apr 26, 2021 3:48pm
This tool on the myfxbook website is pretty good for giving you liquidity info. You can use this as an example of when not to be trading.

https://www.myfxbook.com/forex-market/liquidity
  • #447
  • Edited 9:28pm Apr 26, 2021 9:08pm | Edited 9:28pm
Quoting viptrading
This tool on the myfxbook website is pretty good for giving you liquidity info. You can use this as an example of when not to be trading. https://www.myfxbook.com/forex-market/liquidity


If I can make a genuine suggestion here and add to this (all kidding and smart-ass-ness aside) .....

To reverse engineer liquidity, where specific info is absent or tainted, you need to appreciate an Fx version of 'Interested Parties' type open interest. For me personally, I have no reason to trust myfxbook and its information. The linked page you mention vip does mention open interest but as a self-restriciting statement re: OTC Fx. In actual fact, FX DOES have its own Open Interest, it's just VERY difficult to find and calculate. In those posts I recently wrote, (admittedly a bit of a mash job at trying to explain and describe it - well I did say it was a complicated area) I was showing that instead of having the mentality of "Us vs Them" re: the large cap participants (That creates a victim mindset) it is more efficient and A LOT MORE profitable to create a real life workaround involving the LC participants based on them as an entity, both individually and categorically. Eg - Barclays Bank, Hedge Funds etc ALL have to be audited and pay taxes, have to record information of their activities, be it partial or full. If someone will accept that these LCP's are entities that create and leave a paper trail, then a trader can audit them for the specific info that shows their motivations, goals and the way they perceive the market/s they carry exposure in. THIS is what I was trying to show and explain. There's little point in following someone (Eg RIckM or me) who does certain things with Volume that you yourself could/will never do, for whatever reason.

So the LCP's are motivated by certain things and in certain ways. Something people have already deduced, is they try and sometimes succeed in 'blocking' movement, or 'opening up portals' of movement. So even though you can never know who their clients are, you can use ALL the other info freely available to determine their core motivations. THIS, in turn helps to see where on the chart the market will probably do a short term retracement, correction or reversal (call it whatever you want) vs a heavy full reversal. The other thing I will mention here is this - through my own experience consulting with a small number of private funds, they don't just dump cash into the market. They tend to use a Profit-On-Profit approach that lets them 'leech' orders into the market to setup what they intend to do. It spreads risk and can reduce production stress. It's harder to track and easier for them to fulfill their goals for retention and meanwhile, following the regulations. Indeed at times they will dump larger orders in BUT as a private trader, using a 'top heavy - bottom heavy approach' re: Volume can be ambiguous. I personally have found motivations to be purer than data. And this is what led me to address an Fx Open Interest style of viewing the Volume.

Liquidity, Volume and Tick Totality must be used together as they tell the story from 3 different perspectives of the same situation. The last element needed is time, as Rick had already deduced. It needs to be said here too, I'm not in the habit of simply stealing other people's info or details - to say all this is inline with my own trading career not someone else's. But you the reader determine for yourself, who you choose to follow or believe, so that you can learn instead of blindly follow.

Hihihi - I'm going to assume you were talking about me before - YES Rick, I did see that push move that you noted on your pretty chart before.

For me personally, it doesn't bother me what people think of me. The info I speak of is real and verifiable for anyone who wishes to use a way to access the Fx markets properly, instead of walking around in the dark.

I have happily day traded for years, so I don't see any competition between me and others. My only interest is to separate the wheat from the chaff so people can learn. I don't like posers or reverse psychology "trolls/troublemakers" and this is why I get heated and pissed off. When people are trying to learn. it's hard enough trying to learn and understand, to also have to be concerned about who to trust to then verify the info and to move forward. I'm afraid not every gold nugget is found is sweet honey.


Attached Image (click to enlarge)
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The above pic is just a simple representation of how to use your own "precog format" ....

Main Definition ...

https://www.definitions.net/definition/precog

And this ....

https://www.investopedia.com/ask/answers/119.asp

To trade you need to be a savvy real life self leader not a forum junkie. Fx is an island of speculation for people who isolate Fx and try to remove the "real life" component from its activities. As a side note, this is in part, why EA's that do the trading for you don't work well or constantly.

I hope this helps.

Peter

PS - The pic below is what it looks like as a result of using motivations and time to very accurately determine market activity ....


Attached Image (click to enlarge)
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Real Trading is not gambling.
  • #448
  • Apr 26, 2021 9:11pm Apr 26, 2021 9:11pm
The above post is in no way trying to "impress people" or gain favor with anyone, it is merely to inspire, inform and educate.


Peter
Real Trading is not gambling.
  • #449
  • Apr 27, 2021 12:12am Apr 27, 2021 12:12am
Quoting RickM
A few years ago I worked with a British mathematician on a problem to be able to break up the market into data that describes price as being either positive delta in a bullish move or negative delta in a bearish move. I wanted to be able to define price as either being in a positive state or a negative state for use in some Algorithms I was developing. I didn’t expect there would be one answer and expected all markets would have different values or no correct value at all. I Kept asking myself why I couldn’t find other research papers on this topic...
That is really interesting. I am of a mathematical mind too. I think there is definitely a structure it follows and there are small markers the market leaves each day. Once you spot them it is key to take advantage
  • #450
  • Apr 27, 2021 1:23am Apr 27, 2021 1:23am
Quoting PeterCaleb
The above post is in no way trying to "impress people" or gain favor with anyone, it is merely to inspire, inform and educate. Peter
I'm terribly sorry, but your charts are bullshit. You draw that lines over the history. It is useless and can only impress newbies. And there is nothing to learn.

Next time get EU chart and draw your lines first. Then we will wait and check if you were correct after your lines will be filled. And we will see.

What I'm talking about is that there are at least 2 types of "traders" here. First who think that they can outperform competitors drawing the lines and second who are trying to discover and use all possible advantages/edges. Funny thing the only first type always ask for proofs all the time. And this is the brutal truth of trading.
Observer effect
  • #451
  • Apr 27, 2021 1:43am Apr 27, 2021 1:43am
Quoting ryuryu
{quote} I'm terribly sorry, but your charts are bullshit. You draw that lines over the history. It is useless and can only impress newbies. And there is nothing to learn. Next time get EU chart and draw your lines first. Then we will wait and check if you were correct after your lines will be filled. And we will see. What I'm talking about is that there are at least 2 types of "traders" here. First who think that they can outperform competitors drawing the lines and second who are trying to discover and use all possible advantages/edges.


Buddy, you need glasses. I don't know what you're looking at or what you think you see. I use that approach everyday across dozens of instruments. Both Fx and other asset classes. And you need to get your facts straight. They are not lines alone. They are a preset form of the Fib tool that demonstrates that particular markets' breadth, mathematically, orderly and in relation to time. THAT pic was taken months ago in real time on THAT day of the Gold chart activity. Not in hindsight, not on strategy tester set to start at that point etc etc. ANY other false references or accusations to be made? IF you understood what you are looking at you wouldn't even open your mouth in this way. Maybe, just say thank you for providing 35yrs of experience in one picture. But hey, I'm just trying to impress new traders right? No matter who you are or what your experience, you just proved you lack the basic (BASIC) observations skills to think about the possibilities first before running for cover and prejudging it.

So ...... are you a "newbie" as you so eloquently put it OR, are you someone who pretends?? Because I have found if I cannot trust someone with my money, then I don't see how they could possibly be a competent trader. I have personal standards about these things.

OK. So, do we try this again, or, do you want another go at spitting on something that clearly is beyond you? ..... Until you choose to learn.


Peter
Real Trading is not gambling.
  • #452
  • Apr 27, 2021 1:59am Apr 27, 2021 1:59am
Quoting remonpilip
{quote} Hi PipsCrasher, referring to: I disagree that they are impossible to predict. Knowing the conditions of the long-term picture, we can assume the likelihood of a pattern forming within a long-term trend. there is this one theory that I really like about the smaller timeframe, it goes a bit like this: inside a predictable solid object, there are a certain magnitude of still atoms, and inside those atoms are chaos. look closer you'll see chaos, and it is the building blocks of a solid object if you look at it on the bigger picture. why is it...
I understand what you are talking about and let me add a little to this,
Patterns appear as soon as we start to notice them. That is why, I would suggest the principle of quantum superposition, which, as you said, will describe the state of the price similar to the chaos of an electron, and the collapse of the wave function occurs when an observer appears.
Likewise, as soon as a trader starts trying to explain the market movement, patterns and trends immediately appear and become available.
  • #453
  • Apr 27, 2021 2:50am Apr 27, 2021 2:50am
Quoting PeterCaleb
{quote} So ...... are you a "newbie" as you so eloquently put it OR, are you someone who pretends??
Take any forex pair you like and draw your lines. Set marks where you will place your orders. And we will wait for your fault. Later you can re-draw your lines and show everyone how you are good at picking exact tops and bottoms.
Observer effect
  • #454
  • Apr 27, 2021 3:04am Apr 27, 2021 3:04am
Quoting ryuryu
{quote} Take any forex pair you like and draw your lines. Set marks where you will place your orders. And we will wait for your fault. Later you can re-draw your lines and show everyone how you are good at picking exact tops and bottoms.


ryu (or whoever you really are) ...

I don't dance so others can continue to play their silly games. Why don't you try studying the pic's chart and stop wasting your time trying to push my buttons. The proof is on that chart IF you can think and put your silly attitude aside (for at least a minute or two) and go look at Gold and see what happened AFTER. Here's the thing sparky - I have had several people who have made a copy of that exact pic and chart and gone away and have worked out what it's about all on their lonesome .... so instead of assuming I'm lying and just being a dickhead, pretending I know something you don't, why not be proactive for once.

Peter
Real Trading is not gambling.
  • #455
  • Apr 27, 2021 3:10am Apr 27, 2021 3:10am
It's rather disturbing how people who are either inexperienced and / or incompetent at trading, require informational proof when in fact it's sitting right in front of them the whole time. My suggestion is withdraw all your trading funds and go down to your local Red Cross and donate the money. It'll be better used there than in the hands of someone who is kidding themself.

Silly people with silly attitudes are wasting their time here if they lack one of the very basic of human skills ....... useful observation.


Peter
Real Trading is not gambling.
  • #456
  • Apr 27, 2021 3:47am Apr 27, 2021 3:47am
How about you stop drawing lines, forget about the common "technical analysis" and all these stupid theories?
Start to pay attention to the things that matter!

Take currency strength for example. One of the most simple and yet most important things in FX. Yet you don't see many people using it.
In fact you can't even find the proper calculation anywhere. It's like nobody knows how to calculate the strength of individual currencies.
Most people are stuck trading just one pair instead of looking at the whole market. Now how stupid is that? This is like driving your car blindfolded with curtains on the windows. Of course you are going to crash.

For example when you see upward movement in XXX/YYY pair you should ask - is this pair rising because of BUY pressure in XXX or this pair is rising because of SELL pressure in YYY?

These things matter!
  • #457
  • Apr 27, 2021 4:11am Apr 27, 2021 4:11am
Quoting alphaomega
How about you stop drawing lines, forget about the common "technical analysis" and all these stupid theories? Start to pay attention to the things that matter! Take currency strength for example. One of the most simple and yet most important things in FX. Yet you don't see many people using it. In fact you can't even find the proper calculation anywhere. It's like nobody knows how to calculate the strength of individual currencies. Most people are stuck trading just one pair instead of looking at the whole market. Now how stupid is that? ...
Currency strength is available to everyone all the time if you just look at the data available online. Livecharts has one for example http://www.livecharts.co.uk/currency-strength.php

The problem is being able to profit from that data and also what is your definition of "strength"

https://en.wikipedia.org/wiki/Currency_strength

https://www.investopedia.com/ask/ans...weakdollar.asp

So you see, this is not as simple as you make it seem in your post, maybe you do not understand how complicated the subject of calculating a currencies strength is. There are even some good experts on this forum made by members who have coded cool meters you can put on your chart to see the strength and how it changes live.
Here is one for example. https://www.forexfactory.com/thread/...ngth-dashboard

The problem with these is all this data is delayed, so by the time you see the short term strength indications, it is hard to find any use in it alone to place trades from. Surely you can incorporate currency strength in your strategy, but at the end of the day the whole point of trading is predicting where price will go, and then managing your capital appropriately. Currency strength by itself is not a holy grail....

imo NOTHING beats analyzing price by itself, and learning how to use TA. Of course, even price is lagging but its the fastest indicator I know of, (though some people claim to have "predictive" indicators I am not sure I believe that is possible and if it was I doubt anyone would share such a thing.).

Once you are experienced enough you CAN use technical analysis by just looking at price alone and wait for it....drawing lines/building your OWN projections. That is how many pro traders do it. You have to also have a thorough understanding of economics as well, I believe in order to survive this game long term.

EDIT: I should add also, that not all currency strength is calculated in the same way, which is why imo its best to just develop your own bias on currency strength by doing research on each currency and making notes to build directional bias since you will know how to use your own calculations better than something that was premade and may not work for your particular strategy.
  • #458
  • Apr 27, 2021 4:13am Apr 27, 2021 4:13am
Quoting alphaomega
How about you stop drawing lines, forget about the common "technical analysis" and all these stupid theories? Start to pay attention to the things that matter! Take currency strength for example. One of the most simple and yet most important things in FX. Yet you don't see many people using it. In fact you can't even find the proper calculation anywhere. It's like nobody knows how to calculate the strength of individual currencies. Most people are stuck trading just one pair instead of looking at the whole market. Now how stupid is that? ...



For me (And I am only speaking for myself here) I would concur with what you are saying. The only thing I would query, is the expected efficacy of currency "strength". It's more coined wording these days rather than people actually understanding its place in particular approaches and circumstances. If people are using moving averages or other indicators to gauge it, then they are not legitimately evaluating anything but the fragmented movements. From what I have seen, most people do not want to put in the time or effort to seek real world information to use it properly to gauge real world with real world..... which is what is supposed to be done as you need to include Interest rate shifts, conversionary or diversionary politics or policy amendments, changes to industry standards or regulations etc etc. It's funny to read different people's take on things such as Risk On and Off and the intervention of Higher levels of the monetary system such as BIS or Central Banks. I won't go on and on here as there's too many people around who just want to mock and spit on what they don't understand or care about. So yeah, I know what you mean.

Peter
Real Trading is not gambling.
  • #459
  • Apr 27, 2021 4:16am Apr 27, 2021 4:16am
Quote
For example when you see upward movement in XXX/YYY pair you should ask - is this pair rising because of BUY pressure in XXX or this pair is rising because of SELL pressure in YYY?

This is true, I cannot understate the importance of understanding each currency independently, this is a key factor in fundamental analysis...
  • #460
  • Apr 27, 2021 4:17am Apr 27, 2021 4:17am
Some people are just basic hard working altruistic people. Not everyone is a leech or parasite in their work life. It's always easier to judge than to do the work.


Peter
Real Trading is not gambling.
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