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The brutal truth of day trading

  • #661
  • May 8, 2021 1:49am May 8, 2021 1:49am
Quoting PeterCaleb
{quote} The only people who would smear their thinking with your way of seeing things, are those who WOULD be laughing at me. The funny thing is, as I've said many times before, what I say towards you is through you. It's not 'to you' or 'for you'. It's to put in print the types of things that many people think while they go through different information and go through the threads. A dickhead is a dickhead. The people who align with wanting to learn don't need to side with you, suck up to you, don't EVEN need to communicate with you. Not even join...
Being Laughed At
I for one am not laughing at you Peter. I sense that there is quite a lot of wisdom there between those tantrums. Being a bit of a tantrum thrower myself, (particularly when trying to teach trading to dickheads), I am hardly in a position to laugh or otherwise cast stones.
Don't Guess Test
  • #662
  • May 8, 2021 2:30am May 8, 2021 2:30am
Quoting TraderTim125
{quote} Speculation in the financial trading instrument does not help the economy in any way
Money makes the world go round. Why does not help? People send money to brokers, brokers pay salaries, pay for servers and data. Traders post on forums, forums earn from advertisement and so on and so on. Some buy VPS, indicators, EAs. Some pay to create some. You have to buy PC or phone, pay for internet, electricity to trade. How it does not help the economy? It is the part of economy.
Observer effect
  • #663
  • May 8, 2021 4:28am May 8, 2021 4:28am
Quoting tommydoginti
{quote} Thanks for your sharing. Don’t get me wrong, I do believe succeeding in any skills like trading requires effort and learning. Thinking is crucial. One should think of ways to obtain valid information. Thinking can be intense in developing various skills to handle trading strategically, operationally and emotionally. Practice and improvement is a loop that only works with active thinking. What I saw along the way of discussion is WHAT to think being the major argument here. You can read my posts and know I focus on execution and system development...
Thinking, Specific and Optional Knowledge
While some may find programming and statistical analysis useless and unnecessary, I certainly don't. It has been the background of all my trading in Forex, stocks and options over the years. I struggle to understand how people do without it but obviously they do. I fully accept that quantitative analysis is not the end-all and be-all of trading. For me, the psychological skills that pertain to trade execution are just as important. Again, I find others who don't think it is important.
What is also very important to me but seems to be quite optional for many other traders is to have a firm understanding of basic principles. I base anything I do with trading on such principles. For example the relationship between profit, capital, risk and trading edge. To my mind this is easiest to understand using some very simple mathematics but often, when I mention these subjects to other traders, they just roll their eyes and make it very clear they think I am "off with the pixies".

I use Forex Factory nearly every day. I joined this forum more than 10 years ago but at the time I made only one post. That was also about the time I decided to stop participating in any trading forums because I found them too noisy and destructive. In the meantime I have participated in online forums for art, music and model engineering and generally found them and many of the people I have met on them extremely helpful and congenial.

I returned to posting on this forum very recently with the objective of trying to understand how other traders with different perspectives to me look at and think about markets. While the uncertainty, inherent in financial markets creates some unique challenges, I question the usefulness of all the name calling and argy-bargy which seems to have continued unabated over the years.

I love trading, particularly Forex. I think it is one of the greatest and most challenging games on earth. I just wonder how I can best contribute to an online community such as this in a constructive way.
Don't Guess Test
  • #664
  • May 8, 2021 4:29am May 8, 2021 4:29am
Speculation creates pressure on the financial markets to perform and not only show nos.
A trade should be based on an assumption based on facts
  • #665
  • May 8, 2021 4:36am May 8, 2021 4:36am
Quoting maverick2017
Speculation creates pressure on the financial markets to perform and not only show nos.
Biggest ever pressure on the market makes constant money printing ...
  • #666
  • May 8, 2021 4:49am May 8, 2021 4:49am
Quoting RickM
{quote} Hi TraderTim The real reality of the market is the big players don’t trade much but hold 90% of liquidity for other financial purposes away from the trading market and therefore the liquidity does not sit on the chart. They control the market by starving the market of liquidity - then releasing it when the need arises. Most movement is caused by smaller institutional bankers, market makers taking advantage of this thin liquidity market to move the market and control the shorter term order books. But the Big Players are watching, waiting...
Big players don’t trade much but hold 90% of liquidity
Interesting statement Rick. What is your source of information or the basis for this statement?
Don't Guess Test
  • #667
  • May 8, 2021 4:56am May 8, 2021 4:56am
Quoting Shabs19
{quote} E$ - EurUsd GA - GbpAud ST - Short Term LT - Long Term PA - Price Action TA - Technical Analysis FA - Fundamental Analysis NFP - Non Farm Payroll
Thanks for that. Non Farm Payroll (NFP) would have been the only one I would have got off the top of my head. I will now go back and have a look at your post although of course I know (now) what all the others mean.
Don't Guess Test
  • #668
  • May 8, 2021 5:30am May 8, 2021 5:30am
Quoting TraderTim125
{quote} Being Laughed At I for one am not laughing at you Peter. I sense that there is quite a lot of wisdom there between those tantrums. Being a bit of a tantrum thrower myself, (particularly when trying to teach trading to dickheads), I am hardly in a position to laugh or otherwise cast stones.


They're not 'tantrums' per say. I simply figured out years ago that it's very unhealthy to repress what is truly felt and thought. That is why I am usually 'unpopular' with people here. I don't conform to 'political correctness' as it makes things worse not better for people.

And I am the one who raised the issue re: part liquidity being withheld as we were on the topic of this and people needed to understand how the real world works.


Peter
Real Trading is not gambling.
  • #669
  • May 8, 2021 6:33am May 8, 2021 6:33am
Quoting TraderTim125
{quote} Big players don’t trade much but hold 90% of liquidity Interesting statement Rick. What is your source of information or the basis for this statement?
Hi TraderTim

Data & that foul mouth Peter (his tantrums may hide some genius he has hidden in his little brain - pity he can't express himself without being so bloody rude).

Lets look at EURUSD on Friday as a classic example.

Looking at the data I have streaming on that's days volume, 87% of volume was placed onto the market only within 16 separate one minute candles.
That means the market was trading the other 13% of the days volume within the other 1424 one minute candles.
Therefore most liquidity never sits on the market and we cannot touch it.

I hope you see where I am going.

They hold this liquidity and use it for non relating trading matters for which you better ask Peter about as he knows more than he's telling us.
If he could just express himself without being a dickhead, we may actually learn something from him.
When Red news like on Friday nights Non Farm Employment numbers or any other major news events occurs - a huge amount is released for trading purposes.

I hope you see what this means and its very important.

We trade a market mostly starved of liquidity - manipulation of the markets is easy when most liquidity sits in your pocket.

Cheers
Trading thin liquidity at the boundary of the charts
  • #670
  • May 8, 2021 6:53am May 8, 2021 6:53am
Quoting BlackNapkins
{quote} Biggest ever pressure on the market makes constant money printing ...
I don't have the why for this statement. But speculators were right for a long time before the bubble burst, I guess.
A trade should be based on an assumption based on facts
  • #671
  • May 8, 2021 7:14am May 8, 2021 7:14am
Quoting maverick2017
{quote} I don't have the why for this statement. But speculators were right for a long time before the bubble burst, I guess.
Sir,
what I have on mind is explained here... this is a pressure real one comparing to pressure of speculators... seems much higher influence on markets than speculators ever can provided ...
creating bubbles is not a making pressure on markets?


Inserted Video
  • #672
  • May 8, 2021 7:28am May 8, 2021 7:28am
Salut,
I’ve been there since the 2000s, on Forex since 2005.
There are hundreds, what I call thousands, of strategies here and elsewhere on other forums.
As well as the best indicators (those of Mladen and others).
Nothing, is winning. I mean, in the long run, nothing wins, nothing really wins. It’s incredible! Nothing
Santé
jf
  • #673
  • May 8, 2021 7:48am May 8, 2021 7:48am
Quoting BlackNapkins
{quote} Sir, what I have on mind is explained here... this is a pressure real one comparing to pressure of speculators... seems much higher influence on markets than speculators ever can provided ... creating bubbles is not a making pressure on markets? https://youtu.be/dPW1tbMOAA4
First things first, PLEASE do not call me sir, you can call me by my username or any other word but not sir

My first thought after watching this was is the printed money reaching general public through loans at lesser interest rate than pre-crisis time. If yes, then eventually some people will start some business and can live a better economic life than before. Also, they will pay taxes. This will help the nation return the debt it holds and everything will be fine. Printing money would have fulfilled its purpose.
It is a government's duty to ensure the welfare of all the people in the country and they have chosen printing money as the tool to overcome this crisis (there might have been some policy changes or new one's made to fight the crisis). Do they have a plan? I don't think so. Is printing money working? Yes.
Bubbles are not new to the financial markets. So, that tells me that we can overcome bubbles and that is a big thing.
A trade should be based on an assumption based on facts
  • #674
  • May 8, 2021 7:51am May 8, 2021 7:51am
Let us get back to talking about day trading. PLEASE!!
A trade should be based on an assumption based on facts
  • #675
  • May 8, 2021 9:50am May 8, 2021 9:50am
Quoting PeterCaleb
{quote} They're not 'tantrums' per say. I simply figured out years ago that it's very unhealthy to repress what is truly felt and thought. That is why I am usually 'unpopular' with people here. I don't conform to 'political correctness' as it makes things worse not better for people. And I am the one who raised the issue re: part liquidity being withheld as we were on the topic of this and people needed to understand how the real world works. Peter
Just change the font and font size.
A trade should be based on an assumption based on facts
  • #676
  • May 8, 2021 9:53am May 8, 2021 9:53am
Quoting maverick2017
{quote} Hi Trader, Don't the big guys trade for other big companies and the big guys are always sitting on a lot of liquidity? <-- this is only my view. These people need to to fill the orders of big companies as soon as possible. So, they release the liquidity they have whenever there is a need to. Is the order book same as level II data we have? {quote} There are laws against this practice, I guess. Another thing is these big institutions need to fill the orders from their clients and don't they compete to get the business? {quote} Do the banks...
Do the banks also trade their own money etc?

Maverick
It is a complex picture and I don’t pretend to fully understand all of it. As retail traders we only get occasional snippets of information and a lot of this comes from sources of questionable reliability. You mention Level II order books. These relate to stock trading. I was referring to retail spot Forex which is a very different game.

In my opinion the best place to start to try and understand the big overall picture is to look at what we do know. Roughly 50% of the entire Forex market is commercial. This consists of businesses buying or selling products or services around the world and settling their accounts through a bank. There are of course many banks in the world but most of this business is channelled through about a dozen or so of the very largest banks who make up the core of what is generally referred to as the inter-bank market. Banks have an obligation to fulfil settlement orders for their commercial customers. They typically do this within 24 hours. These orders are aggregated together and make up what I referred to as the order book. It is not a book as such. Most of these orders find their way onto one of two online systems used by most banks.

If you have ever transferred large amounts of money to another country you will know that the banks charge a significant fee for this service. It is a lot more than the 1-3 pips we typically pay for our Forex trades. Obviously if a bank can buy below the daily average price or sell above it, they can make additional profit so this is what they try and do. This constitutes the first and possibly the most important level of intra-bank trading.

The other 50% of the Forex market is speculative. Speculators are not the counter productive evil empire that some politicians and others sometimes claim they are. They provide the essential component of liquidity. Without liquidity markets as we know them would cease to function and unscrupulous political leaders could manipulate their country's currencies to their own often dubious ends. Speculators therefore help keep politicians and central banks under some control as well as making it possible for us to trade Forex as a side product.

In order for something like a Forex market to operate continuously 5 days a week there has to be someone who is always willing to take the opposite side of any trade. These people are known as Market Makers (MMs). The main market makers are again the dozen or so big banks previously mentioned although there are quite a few subsidiary MM's. This is where my knowledge becomes a little muddy. I have heard it said that most if not all of these subsidiaries are owned by the big banks. While it seems to me likely that they are connected in some way or another I have my doubts as to whether they are all owned outright. Perhaps some are.

In any case all MM's, whether large or small are in business to make money. They do this by buying at a lower price than which they sell which of course is commonly know as the spread. They also “encourage” anyone to sell at a lower price than which they bought and vice versa. A practice commonly referred to as price manipulation. MM's also need to be competitive. If they get too greedy, both speculators and non speculators will take their business elsewhere.

At the bottom of the food chain are the retail traders. Despite all the marketing hype and BS, most of our trades never even make it past our own brokers although it is probably true that nearly all trading these days is handled automatically with little or no human intervention. If retail Forex brokers are running their business properly, what they do is hedge any imbalance in their books with one or more market makers from whom they also derive the price feeds that they pass onto us. Again I use the term books for computer programs and databases. The term brokers is also a bit of a misnomer. They are not really brokers at all. Their activities are more like that of bookmakers who take sporting bets. Obviously, with retail traders comprising only about 5% of the total market and a very discordant part at that, they will have very little impact on prices. The price moves we see on our charts are the due to much bigger traders including banks, funds etc. The statement “I don't think that these guys are there to trap the retail guys” is probably true. The traps are set for much bigger prey and retail traders just get caught in them. Also the idea that brokers or MM’s trigger stops for individual traders is probably untrue at least these days. In the early days of Forex it seems that a few smaller MM/brokers did do that on occasions. It created a public outcry and companies that resorted to those sorts of practices quickly developed a bad reputation. My understanding is that the MetaTrader server software does have the facility to trigger stops within a certain price range. If such a facility does exists, I doubt if any responsible, regulated broker would be silly enough to use it. It would be too easy to get caught and the penalties for doing so would be severe. It would also not be good business.

By the way if anyone has access to Meta-trader server side documentation for either MT4 or MT5, I would be interested in having a look at it.

There is a lot more could be said on this topic but I think this is more than enough for one post. Maybe some others could add something but only factual or verifiable information please. Otherwise the whole topic just spins off into fantasy land.
Tim
Don't Guess Test
  • #677
  • May 8, 2021 9:54am May 8, 2021 9:54am
Quoting maverick2017
{quote} When I used to trade forex then we had 4 digits after decimal. Now that has changed I guess. 10 pips if there are 4 digits after decimal is different than 10 pips if there are 5 digits after decimal. {quote} ^^ taken from investopedia.
The USD pairs are all out 5 decimals and JPY pairs are 3 decimals. 10 pips is 10 pips weather your looking at 4 or 5 decimals (USD pairs) or looking at 2 or 3 decimals (JPY pairs).

However in discussion, at least for me personally, I always discuss pairs as 4 decimals for USD pairs or 2 decimals for JPY pairs.

Example, if I am talking about the EUR/USD, price is at 1.1262, I don't say price is at 1.21629

The 5th and and 3rd decimals are fractional movements

Attached Image
Swing the AXE..HARD w/ Effort, Consistency and Patience
  • #678
  • May 8, 2021 9:59am May 8, 2021 9:59am
Quoting RickM
{quote} Hi TraderTim Data & that foul mouth Peter (his tantrums may hide some genius he has hidden in his little brain - pity he can't express himself without being so bloody rude). Lets look at EURUSD on Friday as a classic example. Looking at the data I have streaming on that's days volume, 87% of volume was placed onto the market only within 16 separate one minute candles. That means the market was trading the other 13% of the days volume within the other 1424 one minute candles. Therefore most liquidity never sits on the market and we cannot...
Hi Rick,
I see where you are going but I will have to think about that. I will get back to you.
Tim
Don't Guess Test
  • #679
  • Edited 10:18am May 8, 2021 10:01am | Edited 10:18am
Quoting maverick2017
Let us get back to talking about day trading. PLEASE!!
Attached Image

USD CHF is 5 decimals. ATR is 28
USD JPY is 3. ATR is 25

Just check first 2 numbers after the zeroes.

I have created little script for tradingview. It shows pair name (or any text you want) and current ATR (21). I don't know how to clean it to show only the ATR, but in fact it is ok too. If you don't need to draw text, but only ATR, simp;y remove lines 3,4,5 & 6

Inserted Code
//@version=4
study("Symbol&ATR", shorttitle="Symbol&ATR", overlay=true, precision=5)
Nombre = input("Nombre", title="Symbol&ATR")
vcolor = input(color.new(color.black, 0), title="Color")
b = label.new(bar_index, high, Nombre, textcolor=vcolor, style=label.style_none, yloc=yloc.price, size=size.huge)
label.delete(b[1])
atrcalc = atr(21)
l = label.new(bar_index, na, text=tostring(atrcalc), style=label.style_none, yloc=yloc.abovebar)
label.delete(l[1])

Hope it will help, Cheers
Observer effect
  • #680
  • May 8, 2021 10:16am May 8, 2021 10:16am
Quoting TraderTim125
{quote} Thinking, Specific and Optional Knowledge While some may find programming and statistical analysis useless and unnecessary, I certainly don't. It has been the background of all my trading in Forex, stocks and options over the years. I struggle to understand how people do without it but obviously they do. I fully accept that quantitative analysis is not the end-all and be-all of trading. For me, the psychological skills that pertain to trade execution are just as important. Again, I find others who don't think it is important. What is also...
Hi traderTim, welcome back.

I do think everyone has different important things to learn to trade based on their styles. It is both objective and subjective. Like for RickM, knowing the mechanism of volume is objective need as it is the tool to trade. For me it’s not playing a part in my trading decision, so I have no need (objective) but can choose to learn (subjective), vice versa I have to learn certain aspect of trading which RickM does not need to. Many may not aware that HK people is many “trade forex” (actually just buy/sell cash) based on psychological and round numbers, especially for JPY and TWD. But most of them don’t even know what a pip is, yet profiting in a long run.

Of course day trading is completely different story and needs deeper learning, just there are so many styles out there and each requires different skill and knowledge sets. There is no “should” or “shouldn’t” to learn that can be judged by others but the trader himself/herself. All others can determine is if the information is correct or accurate.

I am not sure about FF 10 years ago, I joined last year. What I see is it’s more a bully ground for the members who have been here longer. You can cruise other threads to feel the vibe, and browse 3-party websites for FF reviews.
The funny thing is those high rank members are not necessary successful traders. Compared with another forex forum where ranking is based on performance of linked trading accounts, here (not meaning this thread, no offence. I think some real successful traders have participated in this thread) many “experience traders” spread incorrect information and antagonising newer members. TBH, I don’t mind real pro being an Ahole if able to show a consistent high growth of account size. But in this forum many are more like directing their anger in losing trades to others, and project their failure to others to make them feel better.

There are things worth reading and learning in FF. i believe people also welcome your contribution. It’s up to how you can cope with the abusive feedback you will receive quite frequently to determine whether you should stay and post, or just read...

good luck and trade well.
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