The brutal truth of day trading

I am Long

SOYBNUSD
SUGARUSD
WHEATUSD
GBPCHF
GBPAUD
EURCHF

and
DOGECOIN

Anyone who wants to see my analysis or wants to see charts pick a pair from here and I will post, except for DOGE, that one was kind of a joke, though I am still long lol.

I hate to say it but I think Peter may be right about some liquidity being put aside for other reasons.
I see imbalance levels caused by lack of buyers or sellers turn the market.
So when we get to a spot where exhaustion of either bids or asks occurs, I look to trade against the strength as price pullbacks to balance the books and fill gaps.

I call this useful liquidity.

The puzzle is there still remain liquidity that sits there and does nothing, has no effect on bearish or bullish moves.
Why the hell does some liquidity sit on the orders books without any apparent effect on the markets?.

Peter tell me more (God did I just say that)

PS. Your’e still a pain in the arse

Quoting PeterCaleb

Disliked

Form my own experiences, about 10-20% of usable 'liquidity' is used ongoing for profiteering in FX OTC each day. What many people do not remember, is that FX is "Foreign Exchange" and this relates to transactional transfers NOT profit making processes (speculative profiteering). So if say, McDonald's needs to transfer funds from country A to B, then it has to redeem a note to do so. They can't just call the bank and tell them to transfer. Certain large amounts are either done in-house or through an exchange so a 'note' of process must be created....

Ignored

Haha. I got the point now. You just gave million dollar lesson. Appreciate the last sentence. No comment

I don't mean to troll but everytime Peter refers to Jim as "jimmyboy" I lmao. It reminds me of Seto Kaiba from
Yu-Gi-Oh.

I love rent free living inside of someone's head

Quoting RickM

Disliked

{quote} I hate to say it but I think Peter may be right about some liquidity being put aside for other reasons. I see imbalance levels caused by lack of buyers or sellers turn the market. So when we get to a spot where exhaustion of either bids or asks occurs, I look to trade against the strength as price pullbacks to balance the books and fill gaps. I call this useful liquidity. The puzzle is there still remain liquidity that sits there and does nothing, has no effect on bearish or bullish moves. Why the hell does some liquidity sit on the orders...

Ignored

NB - What I am about to talk about is for educational purposes ONLY, based on my own trading career and NOT hypothetical or theoretical or judgmental, so I cannot guarantee other people's experiences won't mesh with mine.

ANY entity, person or company, is going to work off self preservation first usually before any other motivations. And it depends on who they report to, what they report and WHY they report what they do. This means liquidity is really just a word for - this is what we have 'on-our-books - both good and bad'. For a person, just any basic person who wants to deposit money into a brokerage account and try and take advantage of the markets, this is your 'book'. But big companies and other categories of business and money, have 'holdings', they have perennial transactions, they have co-operation assessments etc etc. ALL of it compresses into who does what and why. If company/bank A has too much governed debt, they must offset or "break barriers" to generate a greater than equal return so they can carry less debt. The shareholders or agents of their brokered funds "love this" because they appear to be improving (at least on paper) their business practices.

Banks and other financially based entities have existed for a long time, and they want to keep it that way. So of course they don't have everything floating in an exposed way. You've heard of market share and qualitative evaluations? So, when people think of FX, they misunderstand that it is segmented. Futures etc, Spot, Insurables, Notes (AKA Treasuries etc). Claimant Loans - A form of Debt relief, and others. All is on-book. Future projections tend to fulfill desired returns and this is why Big banks publish their "special indicators" of where things are up to. Similar to forerunning a fund's profits by running a "newsletter" that recommends to its readers to "buy XYZ" and then everyone does and the price goes up artificially ... and you know the rest of what happens there.

Rick, If you see 'orders' graphing on the tape - it means they appear on your chart etc to be static while the market moves away up or down, just ask why and make a list of EVERYTHING you can muster that 'might' explain NOT the reason but the motivation. THIS is important. Are they advertising price for some reason? Are they providing regulatory submission and need to show "X" amount in exposure at that time? Are they provisional marks for a big client (naturally depends on how much is sitting static)? Are they pre-zoning? This is same as us traders placing a price level line to mark a high or low on HTF. Is it just a distractive mule to get people to waste time worrying about them? Hihihihihi. It's all relevant and relative to what comes next. Are they scattered or clumped? Is it just a few scraps or is it MASSIVE and everyone in the world can see it? It's not just you watching Ricky !!! Hehehehe. Anyway start there. Transitional trading is also usually a big mover too. Orders put to market that are the result of profits generated from another market trade. PEOPLE, we have GLOBAL inter-relationships of all markets now. Hihihihi. Yes gets VERY big very quickly.

Another type is the liquidity that doesn't dissolve when the market hits perceived key prices or areas as you would expect it to. Open orders that people assume are 'trend trades' but when you look at the situation you think "WHY?!!". Small and medium cap companies/organisations that do not qualify to run within certain market levels, use other markets where they DO have access, to run their hedging and other offsets etc. Lots and lots going on. Also remember that some are double hedging - such as some hedge funds who do a two payout straddle and then go and underwrite their own trades by placing 'insurance trades' so whatever does happen they profit.

As I said, motivations are purer than data. Not everyone wants to make money right now.

I hope that helps.


Peter

PS To RickM - It might also be your broker or data feed - Spot FX or Futures or both. Not being snarly, it does happen. Omissions and technical discrepancies. Do you have a backup ? Not stored data kind but an alternate that you consider reliable enough for the purposes of comparison?


Peter

Quoting PeterCaleb

Disliked

{quote} NB - What I am about to talk about is for educational purposes ONLY, based on my own trading career and NOT hypothetical or theoretical or judgmental, so I cannot guarantee other people's experiences won't mesh with mine. ANY entity, person or company, is going to work off self preservation first usually before any other motivations. And it depends on who they report to, what they report and WHY they report what they do. This means liquidity is really just a word for - this is what we have 'on-our-books - both good and bad'. For a person,...

Ignored

They are pre-zoning. Now you gave another billion dollar lesson. Naked chart with lines. And it's measurable on the chart.

Quoting Ihlas

Disliked

{quote} They are pre-zoning. Now you gave another billion dollar lesson. Naked chart with lines. And it's measurable on the chart.

Ignored

Please don't be too presumptuous here with this. Let it play out and see what happens. If they are circumstances that are alien to a trader, best to make lots of notes, screenshots, see what other markets are doing around that time as well. You may never truly "know" why but when different markets' activities "coalesce" somewhat, it boils down to relationships and not just black and white data. Being aware of all the things I mentioned is half the battle won.


Peter

Quoting PeterCaleb

Disliked

{quote} Please don't be too presumptuous here with this. Let it play out and see what happens. If they are circumstances that are alien to a trader, best to make lots of notes, screenshots, see what other markets are doing around that time as well. You may never truly "know" why but when different markets' activities "coalesce" somewhat, it boils down to relationships and not just black and white data. Being aware of all the things I mentioned is half the battle won. Peter

Ignored

Now I understand you more than before. When you say circumstances, I understand what you mean. Knowing the circumstances gives 100% advantage when trading. One can smell the intention from miles away and you can win the battle easily. What you saying is incredibly valuable. But I think there will be handful of people who will apply it. I'm sure that almost everybody can understand it with spending enough time and effort on this matter. I'm not even sure about handful.
Have a good day

Well, it's official. Somebody cried. I'm a bully now. My apologies.

Hi Peter

It gets down to money.
There's plenty of paid data available for retail trader working from a home based business like myself but we can't afford it all. Also like you pointed out, I do need and therefore have a backup strategy without any need of paid data that's profitable and ready to go and a seconds notice.

I don't believe most traders realised the importance of your post 477 about useable liquidity thats tradeable. I myself during my posts this year have talked about useable liquidity as well.
I asked myself how come I can see see small orders being the catalyst for a reversal in the market?
How come the liquidity on a chart is very thin, not deep like the bullshit we are fed my our brokers and educators?.

So we have the answer and I suggest everyone study yesterdays Gold's chart and the volume required to swing the markets before the Red news was announced, then look at the volume levels after the Red news.
The conclusion should be the liquidity available to trade is very thin on most occasions as most is locked away and untradeable.
When a news event occurs of importance, this untouchable liquidity becomes available and its FIGHTENING

And its Massive and deep- unlike the normal market we trade most times which is very thin.

The logic therefore should be trade the thin liquidity periods because it offers structure - Trade the deep liquidity after Red news with extreme care.

Edit- It would seem the Thin Liquidity market we normally trade is close to Peter's numbers of less than 20% of the total market.
Again I hate to say Peter may know more than we are giving him credit too (but don't get too cocky Peter)

Quoting jmn5611

Disliked

Well, it's official. Somebody cried. I'm a bully now. My apologies.

Ignored

Yes me too. Sometimes we get outta hand. Sorry everyone.

Peter

This cant happen and cant continue to the stratosphere because of market mechanics and it's limitations. i get what youre saying they shouldn't be out selling ebooks or courses. just make money. that part i will agree on.

but IF this person did exist, this person would be making about what was made at the peak of what you said which would be around 1-3 mil a year. because lot sizes are limited to 50 full lots for example in the US and you cant keep going into a market when there is no one on the other side of the market to buy/sell i.e liquidity. I've seen this said A lot since I've been on FF over the years

Quoting RickM

Disliked

{quote} Hi Peter It gets down to money. There's plenty of paid data available for retail trader working from a home based business like myself but we can't afford it all. Also like you pointed out, I do need and therefore have a backup strategy without any need of paid data that's profitable and ready to go and a seconds notice. I don't believe most traders realised the importance of your post 477 about useable liquidity that tradeable. I myself during my posts this year have talked about useable liquidity as well. I asked myself how come I can...

Ignored

Firstly, for people who cannot afford paid data - match the motivational eg's I mentioned with the formation on the chart. Start there. Learn to include motivations in your evaluation process. Remember, speculation is just a word. It's not a precedent. Match form (pro trend/counter trend reversal/structural turn AKA up to down or down to up or to sideways/reversal on chart with situation of chart WITH motivation. Liquidity presents differently with different brokers. As it does also with each pullback setup or reversal position. You really have to know your broker and their goals to know what you need to do with them. I can see where you're going Rick with your conclusion, but it's never always about money. Sometimes it's about timing or power and control. Liquidity must be better understood NOT feared. With proper price position and a little common sense anyone can trade their market of choice. Day trade or not. One sensible trade per day is worth MORE than 100 failed attempts at the 'big one'.

News is news. PERIOD. Being prepared is key. Being observant is prudent. What is the market doing BEFORE the news? Sometimes I look more at structure than I do the news perspective. Why? Structure offers clues and once you understand how YOUR brain processes shapes, patterns and information, you are on your way. THEN your dinky indicators and other tools can come out to play.

I don't get cocky about this stuff Rick. I just love seeing people learn. If they can learn more and better, they can expand their learning to other areas of this world. But first people need to learn HOW to learn. If this doesn't happen, they will just pick at this like a vulture and miss the big picture and continue to perform poorly. And yes Rick, even YOU may be surprised at how someone might think your level is performing poorly. It's not a judgment, just saying that one person's good is another's poor. Stubbornness kills traders.

Every "trade" available to anyone at any time, only has 3 stages - Initial reversal, follow through and final reversal. That's it. So keeping it that simple, Liquidity has 3 major sections. Yes there are little areas in between but they are going to depend on TF and Tick Totality as well as positioning.

Map the market as if you are an explorer. You do that and all this other stuff people go on about will seem rather feeble. And eventually, you won't even need to pay someone for data. The game comes to you.


I hope that helps.

Peter

Quoting petercaleb

Disliked

{quote} Every "trade" available to anyone at any time, only has 3 stages - Initial reversal, follow through and final reversal. That's it. So keeping it that simple, Liquidity has 3 major sections. Yes there are little areas in between but they are going to depend on TF and Tick Totality as well as positioning.

Ignored

5m TF gives better results when combined with 1h TF.