Do you look for or trade exhaustion? | Page 3 | Forex Factory

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Do you look for or trade exhaustion?

  • #41
  • May 14, 2016 2:16am May 14, 2016 2:16am
Quoting DonPato
Inceptionist...thanks for sending these. I've read them but will look it over again to try and find something I've missed. These books are very technical, and I would imagine that is what i appear to be looking for. IT IS NOT... I am looking at order flow and how that affects price. I do not trust or rely on tick values as volume "indicators"...and that is all we get here in forex. Most of the examples listed in these books are from indices and futures markets where the volumes are actual volume statistics. And yes they hold value, but not in the...
There are some alternatives...You can trade currency futures or options ( put-to-call ratio)...COT report could be another valuable asset...and last but not least, some ECN brokers offer you the benefit of looking at their order books to get an idea about order flow and market sentiment...Regards
Simplicity is the key to brilliance.
  • #42
  • May 14, 2016 10:41am May 14, 2016 10:41am
Quoting Inceptionist
There are some alternatives...You can trade currency futures or options ( put-to-call ratio)...COT report could be another valuable asset...and last but not least, some ECN brokers offer you the benefit of looking at their order books to get an idea about order flow and market sentiment...Regards
I am actually considering that. Currently my data feed does not cover currency futures. I only trade index mini futures. I will look into that promptly.
@xxxx§|[::::::::::::::::>
  • #43
  • May 14, 2016 11:46am May 14, 2016 11:46am
If exhaustion is real.. its hard to spot because liquidty picks up and dies off though out the day or week. Example Slow news day may see lower liqudity. Or London open might have high liquidity, then by london lunch time price may be stalled in a 10 pip range waiting for usa to show up and liquidty to pick up again.

Instead of Studying exhaustion... you may do studies on when liquidty is high and low. it might be of more use. to you.. I gave you a few hints of where to start looking.

I use liquidity changes all the time.. I expect them and its very reliable.
The only system that will work is one designed by and for yourself.
  • #44
  • May 14, 2016 2:53pm May 14, 2016 2:53pm
This is a good subject,

exuastion is the the exit point,every period of time and the momentum within that period has the initial energy and the point where it exuasts,its maxiamun potential,it can not within that measured period exceed it.so exuastion is vital in trade managment .your r/r ratio is vital .regardlee of the period of time you measure it will have a maximun ptentential its exuastion point.
  • #45
  • May 27, 2020 2:18pm May 27, 2020 2:18pm
Quoting DonPato
An example of the areas I can identify (in retrospect) as areas of exhaustion {image} You thoughts?
...hello donPato, howis trading going, have you been able to find a way to trade exhaustion, been trying to, however, it has it moments and when it is just off.
  • #46
  • Nov 20, 2021 10:22am Nov 20, 2021 10:22am
Quoting DonPato
My theory for this phenomenon is quite simple. All directional order flows exhaust at some point because there comes a point when all those who wish to participate in a particular direction at a particular time have done so, and there are no further orders coming into the market to continue pushing price in the given direction...thus price stalls and begins to move the other way. This point causes two things to happen. Those who were early in the move begin to take profit, causing the order flow to stall...then those who were the last to participate...
Not sure if I am too late but there is a system that kinda works on this theory
https://www.forexfactory.com/thread/732504-safe-kiss
It uses no indicators just hinged lines
Has a couple of flaws such as big drawdowns, uncertainty when the trend ends and performs poorly on the lower Timeframes
  • #47
  • Last Post: Dec 5, 2021 11:30pm Dec 5, 2021 11:30pm
It’s not that easy to identify exhaustion. I enter and exit when I believe that the price has moved quite far in one direction and it can reverse its position anytime soon.
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