Mark ... Everything you have been told is a LIE
Volman meets Burke or My journey with PA
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- #1,622
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Published Oct 2022? BIS FX Report
Retail FX is about 6% of the spot market. {image}
Hi Mark,
Cheers for the PDF link.
While the below is NOT a conspiracy theory of mine hahaa, as I still trade ONLY WHAT I SEE, I always questioned in my mind how much of even the
“6% Retail Trades” gets to Tier & the LARGER Spot market.
My thoughts only (ie just imho lol) are that each retail broker has access to a pool of Liquidity Providers.
Brokers would start accessing their low-level LPs (in house or very close wink) that begin a retail trade aggregation.
If that aggregation exceeds their own Risk Protocols biased in one direction then they could shelve off some of that risk to the next Level-Up LP that brokers and other LPs have access to.
Then follows imo the same internal mid-level LP retail aggregation activity. While further up at the Spot Market at Interbank / Tier they continue doing their own serious business with major customers, oblivious to Retail at this point, sometimes Tier forcing price in wider ultimate directions either up or down on the Majors (AU, EU, GU, UCad, UJ, UChf) than when the day began, causing Minor pairs (with their extra spread to cater for the double pair transaction activity ie GBP to USD then USD to JPY in the case of GBPJPY) to move also, and then OFTEN (I believe lol) we will see those massive candles just pop up on mt4 which to me are just reflecting & "catching up" to the larger external Tier moves that DO NOT show as Tick Activity on mt4 (and no actual Vol, ever, in Fx MT4) but do show up later on mt4 as Visibly Obviously Large (VOL lol) candles on our charts.
At some point then, and for the same reasons (but just imo) the mid-level LPs may well access Prime and Prime Of Prime LPs to offset their own current risk profile management (as they are all just ‘taking trades” but NOT market making as such with price) but do provide Tier / MMs a bigger aggregated pool of trade availability.
The Bottom line then, IMHO only lol.
NONE of the 6% of Spot that Retail takes up, ever gets out immediately to the bigger Tier Market as The Shakeouts during the day reduce the Risk Parameter Requirements of the lower level LPs or in fact create profit for them as some traders hold too long before tapping out etc OR close quickly (like me) for TP. I have come to understand my own risk parameters while “stuck” inside just two trading sessions only (asia & pre-London/London) that I find it best to “bank” any profits where I can and just ‘go back in’ for another trade later should the opportunity arise.
Doing this quicker TP I do see the market does run further for my trade lol (or maybe flips and would wipe out my ‘already taken’ profit) then runs off to the Major Levels at (defined weekly or daily/monthly/yearly?) Boundaries that BW (when he was speaking correctly) ARE present in our markets imho. As these Boundaries are often reached outside of my ‘trading time session periods’ (ie happen at New York Session Open to the London Close Fixing Time) I find it prudent to bank any profits in my sessions when I can then just tune back in later the next day to see where price has been run to (and which often makes me smile lol). Then it’s a NEW trading day.
Sorry for the length of that post Mark, but your PDF link got me going again wink
What I wrote is ALL supposition only and just some thoughts considered on my part over time.
NONE of those thoughts Drives My Trading, they are just a background narrative that I hold in my head lol.
$6 trillion a day times 6% is still a healthy pool thankfully for any wanting to utilise it
- #1,623
- Feb 4, 2023 7:25pm Feb 4, 2023 7:25pm
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{quote} Hi Mark, Cheers for the PDF link. While the below is NOT a conspiracy theory of mine hahaa, as I still trade ONLY WHAT I SEE, I always questioned in my mind how much of even the “6% Retail Trades” gets to Tier & the LARGER Spot market. My thoughts only (ie just imho lol) are that each retail broker has access to a pool of Liquidity Providers. Brokers would start accessing their low-level LPs (in house or very close wink) that begin a retail trade aggregation. If that aggregation exceeds their own Risk Protocols biased in one direction then...
Very good post.
Here is why I think you are correct in many ways. This observation comes from the regulatory side. If brokers were not taking the opposite side of trades, why would the regulators require the $50 mil or whatever (in the US) for brokers to have as back up and control by the NFA and other orgs. This cushion almost proved too small for some during the Swiss Black Swan. These requirements came a few years before that event. Forced many brokers (many who have totally disappeared) to flee the US. The FIFO thing also peeved many.
ps - Another way I know most trades are taken by brokers is the size. I can not see many liquidity providers wasting time and resources on 0.01 units.
How I view things is that this is the government, knowing the true nature of the FX market did their best to limit any foul play. Which leads me to believe brokers take on a lot of the risk vs the client and it is OK with the gov. Kind of casino like.
Either way, the regulations made for a more transparent and legitimate business FX retail brokers.
I do like the "just collecting trades" part as that is mostly what most of the lower entities do and yes pass on aggregate bundles.
I am not saying it is a bogus market in any way. 6% of some ungodly amount is still a lot.
Mark ... Everything you have been told is a LIE
- #1,624
- Feb 4, 2023 7:50pm Feb 4, 2023 7:50pm
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{quote}
I am not saying it is a bogus market in any way. 6% of some ungodly amount is still a lot.
Agree for sure Mark, not bogus at all.
Highly organised top & bottom is what I think (we think).
Which MAKES it tradeable by virtue of that imho.
I could NOT trade a truly random market, and would not (unless like a night of fun playing roulette for example, with a set amount to lose as entertainment).
But being "organised" means we can look deeper, as a trader, into such organisation, the when, where, how etc. Not simple, but can be done.
One day, when appropriate to the discussion I'll write up one based on my history in horse-playing.
In Oz we do have a totalisator (ie parimutuel)
BUT
We have also have real life living lol, Bookmakers (market makers).
These guys set a market (race) to around 117%, and if evenly laying the horses they must pay out 100% (naturally) leaving a 17% profit each race on their Turnover
Of course they CANNOT get punters to evenly distribute their bets across all horses so at TIMES a Bookie will HAVE to quote prices that are NOT advantageous to THEM based on their perceived % chance of a horse in the race to attract business. We called these situations overlays, and as punters were most desired by us.
ie In the end the Bookie was giving better value than the purely maths value of some horses.
We can do that in Trading by getting in at the extremes for reversals, or by jumping on a "moving train" as our templates tell us a new value direction.
All maths with horses?
NO. Not exactly. (I added just one extra little bit of my own to my horse assessments that did make a difference - my visual observations).
Cheers pal
- #1,625
- Feb 4, 2023 7:55pm Feb 4, 2023 7:55pm
- Joined Dec 2010 | Status: Stop Pretending | 5,275 Posts
{quote} A Very Good Day Pt-3 Some thoughts on all of this. Very aware that the HMA (or most all indis) are derived from price. And that they lag for the most part. None of that really matters if you can define how price works within your framework (whatever that may be). So, I have some smoother squiggly lines and some horizontal lines. Then I watch price in this framework and devise a method to trade it based on the repeatable patterns I observe. I view the HMAs as proxies for price - and price movement - for its "time frame". I have settled on...
Each day is unique unto itself. That is how I approach every day. This goes deeper than just trading, but it fits trading to a T. With the indices it is something general like the diagram below. Price comes in from overnight usually in smaller ranges even if there was some vertical movement. In the US session it will do some form of the three main movements - Up, Down, Sideways.
Don't get me wrong as there are some decent moves overnight, with the better moves coming during the London session in general. I tend to trade the 5-minute swings and those are often minimal in size overnight. The best bet is to trade the MNQ overnight.
MES Monday 30 Jan 2023
Some of the hardest days to trade are the shallow up or down move days. These are days where price moves most of the day either up or down in a shallow grinding manner. Just so happens there were two grind days in a row this past week. Monday was a down grind and Tuesday was an up grind.
Mark ... Everything you have been told is a LIE
- #1,626
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Mark ... Everything you have been told is a LIE
- #1,627
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{quote} Agree for sure Mark, not bogus at all. Highly organised top & bottom is what I think (we think). Which MAKES it tradeable by virtue of that imho. I could NOT trade a truly random market, and would not (unless like a night of fun playing roulette for example, with a set amount to lose as entertainment). But being "organised" means we can look deeper, as a trader, into such organisation, the when, where, how etc. Not simple, but can be done. One day, when appropriate to the discussion I'll write up one based on my history in horse-playing....
As far as random, makes me think of shooting craps. My best day was over $5k. Most were no where near that.
Some people who play the dogs use visual observation to make bets. Win a few, lose most, they still swear by it. The dog takes a dump, bet that one to win method.
Take care
Mark ... Everything you have been told is a LIE
- #1,628
- Feb 4, 2023 10:04pm Feb 4, 2023 10:04pm
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{quote}
Was never in the horses. As far as random, makes me think of shooting craps. My best day was over $5k. Most were no where near that. Some people who play the dogs use visual observation to make bets. Win a few, lose most, they still swear by it.
The dog takes a dump, bet that one to win method.
Take care
Hahaa, yes I've heard about that type of observation assessment lol
.(many may not know but they teach racehorses to urinate prior to a race by whistling to them lol)
I always used to go though to the stalls where you could view the horses up close that you were interested in, pre-race.
But no, the observations I employed as a finesse on top of the maths, were fully performance based observations from past races
(that the pure maths guys missed out on
).
- #1,629
- Feb 5, 2023 12:37pm Feb 5, 2023 12:37pm
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{quote} A Very Good Day Pt-4 Each day is unique unto itself. That is how I approach every day. This goes deeper than just trading, but it fits trading to a T. With the indices it is something general like the diagram below. Price comes in from overnight usually in smaller ranges even if there was some vertical movement. In the US session it will do some form of the three main movements - Up, Down, Sideways. {image} Don't get me wrong as there are some decent moves overnight, with the better moves coming during the London session in general. I tend...
The News or Red Data Days
Most red data releases are benign. Some are volatile. Sometimes one that hadn't amounted to much before suddenly goes BOOM. The moral of the red data story is: Be FLAT. It. Is. As. Simple. As. That.
My broker has id'd these four as special. The margin is increased to 25% of the hold margin starting the night before.
CPI
PPI
NFP
FOMC
This past week was the FOMC and the NFP. Red data has become more of a nuisance anymore. Due to it's potential unpredictability it is best to stay out. Most times you can get an entry soon after. The name of the game, after all, is patience waiting for the correct entry as opposed to any entry. I really do not care about the fundamentals (funny-mentals). Knowing data can be "massaged" you tend to take most with a grain of salt. An example is the most recent NFP. That number was the biggest lie in a while. Look into the data. They have non-adjusted - all negative and "seasonally" adjusted - all rosy. They don't even try to hide the lies anymore. Oh well ...
What we do know is that whoever moves the market likes to use news. They especially like to use Red Data.
MES M15 for week 5 2023
Mark ... Everything you have been told is a LIE
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Mark ... Everything you have been told is a LIE
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My luck sucks sometimes. Caught the crud again. 2nd time in two months. What are the odds for that. Not any near as bad this time.
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Success = Practice + Patience + Persistence
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Mark ... Everything you have been told is a LIE
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Mark ... Everything you have been told is a LIE
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Mark ... Everything you have been told is a LIE
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This is going to be my focus.
A day like this is what I call a slow grind or pain in the ...
Well, they used to be a pain. This is a few hour example of how markets move in general. Impulse. Pullback. Do it until it is time to reverse.
Being that I prefer short term trading for my own reasons, I have decided to see how "scalping" can work with the M2-Hull "cycles". I paper traded this move today using that method in context with the higher TF MAs. Seemed to work fairly well. Will give a full run and see if this is feasible.
I will show my "trades" for today in the next post.
ps: hint, that little green rectangle is the scalp box
A day like this is what I call a slow grind or pain in the ...
Well, they used to be a pain. This is a few hour example of how markets move in general. Impulse. Pullback. Do it until it is time to reverse.
Being that I prefer short term trading for my own reasons, I have decided to see how "scalping" can work with the M2-Hull "cycles". I paper traded this move today using that method in context with the higher TF MAs. Seemed to work fairly well. Will give a full run and see if this is feasible.
I will show my "trades" for today in the next post.
ps: hint, that little green rectangle is the scalp box
Mark ... Everything you have been told is a LIE
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It never gets easier, you just get better
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Mark ... Everything you have been told is a LIE
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It never gets easier, you just get better
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Mark ... Everything you have been told is a LIE