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  • #481
  • Sep 5, 2009 5:30pm Sep 5, 2009 5:30pm
Quoting pipmutt
Good point about a level being hit a few times, I hadn't thought of it like that, is this why they say triple tops are actually quite risky areas?
Probably. Someone posted a link to a video on here (Sam Seiden I think?) and he talked about the same thing. He was saying that the more times a level has been hit, the more likely it is that a real breakout will happen there.
  • #482
  • Edited 5:52pm Sep 5, 2009 5:40pm | Edited 5:52pm
I almost forgot...I can never visit one of these mystic-cryptic-kung-fu-big-secret-pattern-underlying-all-of-trading threads without posting a link to THIS video!

EDIT: whoops, didn't want the embedded version

www.youtube.com/watch?v=YldowmD89ng (http://www.youtube.com/watch?v=YldowmD89ng)
  • #483
  • Sep 5, 2009 7:34pm Sep 5, 2009 7:34pm
It is vital we align our market beliefs with the reality of the market. Our belief system is our trading method after all.

In my view, skfx demonstraights a lack of understanding of the forces of supply and demand which govern any market. As per usual, the market is "out to get" the retail trader in his view. The chart and his interpritations he offered simply do not stand up to simple logic and the law of supply and demand.

Please see my red writing for notes. If you still persist in the view that the market is out to get you, please read a economics 101 text and get up to speed.

Its about time the simple, logical answers are bought to the forefront, and the super secret bs is exposed for what it is, missunderstanding and illusion.

The market will always and has always operated under the governing dynamics of supply and demand. Its no secret, the problem is most people have missunderstood the game from the start.



Attached Image (click to enlarge)
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  • #484
  • Sep 5, 2009 9:05pm Sep 5, 2009 9:05pm
It's only a preview, but a good start if you're truly interested: Trading and exchanges: market microstructure for practitioners By Larry Harris (http://books.google.com.au/books?id=Rd9hDRR1Yx4C&printsec=frontcover&source=gbs_v2_summary_r&cad=0)

If the missing pages bother you, it's time to buy the book.

Thanks for the additional resources StoragePro, LasVah, capitalist88 and Scotty (and others I may have missed). Very interesting indeed.
  • #485
  • Sep 5, 2009 9:57pm Sep 5, 2009 9:57pm
Good quote from Scotty:

I think the guys who trade orderflow have more than rumors. If you are not trading with a chart you are trading with an orderbook as Sk has confirmed when I asked about volume data or orderbook data. If you don't have real information about real orders, than this whole orderflow thing can be boiled down to simple price action, S/R, and pattern trading. If there are no orders to view, then you are not trading orderflow.

Quote from the OP April 30TH 2009

When i enter the market(I'M A TREND TRADER)i am looking for an entry with the least possible risk i can(i'm not psychic i can only use price as a guide).That means entering the trend at the best price possible.
I guess an example would be,if you went down to the supermarket and purchased bananas you know roughly what to expect.If the price tag displyed 10.00/kg then you would shop elsewhere as you know better,thats a damn rip off..

Only a few months ago the op was a trend trader and now on his profile page his preferred method of trading is: Front running.
So in a very short time he has become proficient enough to become an orderflow front runner?? Surely it's not that easy as the whole trading community would know making it obsolete.

Quote:
Originally Posted by hensch http://cdn.forexfactory.com/images/buttons/viewpost.gif (http://www.forexfactory.com/showthread.php?p=3012454#post3012454)
Just my opinion, but I think what we are trying to read here is how to ride on the market movers coat tails, not trying to predict what the may be doing.

So we still have to let the dust settle and discover the missing pieces of this puzzle

Originally Posted by hensch http://cdn.forexfactory.com/images/buttons/viewpost.gif (http://www.forexfactory.com/showthread.php?p=3012454#post3012454)
Just my opinion, but I think what we are trying to read here is how to ride on the market movers coat tails, not trying to predict what the may be doing.

So we still have to let the dust settle and discover the missing pieces of this puzzle.

quote aston dan:
Apologies, my misunderstanding then.

If that is the case, then to be honest, i fail to see how this takes us any further beyond Price Action 101.

For me, the value on reading order flow is in being placed to front-run the orders which actually move the market.

quote op:

when you get congestion forming,then wait till the market shows its hand,if you cannot see the hand crystal clear,then fold.

You need to understand the WHITE SPACE and what's in it.

congestion forming, white space.... front runners don't use charts do they?

The OP has said he has been busting his nuts pouring over charts for hours and hours, surely you would be busting your nut over the orderbook and the tape wouldn't you, after all this thread is about 'orderflow' isn't it.

to quote hensch:
Just my opinion, but I think what we are trying to read here is how to ride on the market movers coat tails, not trying to predict what the may be doing.

not orderflow trading, not front running just coat tailing the pros after the market has showed her hand.

Cheers J
  • #486
  • Sep 5, 2009 10:14pm Sep 5, 2009 10:14pm
Quoting capitalist88
I almost forgot...I can never visit one of these mystic-cryptic-kung-fu-big-secret-pattern-underlying-all-of-trading threads without posting a link to THIS video!

EDIT: whoops, didn't want the embedded version

www.youtube.com/watch?v=YldowmD89ng (http://www.youtube.com/watch?v=YldowmD89ng)

Do not ill speak of the sacred voodoo ninja master, our reverred OP. You will be scalded by the angry mob! This OP had the standard thread pattern going just right including the going away due to "family commitments" or "being sick" in order to create longing for his ninja mastery wisdomite but for some reason he decided "his work is done here" which breaks the old pattern of hundreds of pages of drivel and hero worship by the masses.

Oh well...
  • #487
  • Edited Sep 6, 2009 4:37am Sep 5, 2009 10:51pm | Edited Sep 6, 2009 4:37am
Hey eveybody,

I'm glad that all of you are still working on this stuff. I think some of you are thinking that understanding this stuff means you will be automatically profitable. This is not true. When I say 'understand,' I mean understand how the markets work. There are pretty straight forward rules, and limitations the maket carries with it by nature. The reason some of you are not getting it, is because you have not taken the time to understand the basics.

This topic is not a door in itself to the promise land, but just a door to another door. When you get to the next door, you'll feel like a newcomer to this game all over again. Once you understand how the market works, you can move forward, thats it. There is no big secret to be revealed, and nobody is trying to hold anybody else back.

When I first came into the forex world, I started at babypips, and what I got was charts charts charts. Then I came here and got more charts charts charts. The majority of people here are chart bound. Think about the 'trading systems' section of this site. Anyone that has been a member for a while has seen the rapid growth of this section over the last year. Everyone is under the impression that to be a trader, you need a system based on some technical or fundamental studies.

This topic is about escaping all the insubstantial fluffy candy that you were told is trading. Its like leaving trade school (pardod the pun), where you are learning how to be an electrician, and going off to university to study electricity itself. Or like leaving med school, because you realize you skipped pre-med.

A solid understanding of the Forex, is the only foundation you should be building a stratagey on. Once you know the ropes, do whatever you want. I don't want want to minimize TA, and FA, they both hold merit and many people have given their lifes work to these studies. Just make sure your foundation is solid!

Be able to answer these questions: (these are just a few)

What is Forex?
What type of market place is it?
Why does it exist?
When was it created and why?
Who trades in it?
How is the market structured?
Are there any rules to the game, if so, what are they?
What is a chart?
How does price move?
What are orders and why do we use them?
What differant types of orders are there?
Trading is a zero sum game, what does that mean?
Who wins and who loses?
What is a broker?
What is a dealer?
What is liquidity?
What is demand?
What is greed?
What is fear?
How do the emotions of people effect how price moves?
Ect...

I could go on all night guys. This is where the Harris book and other sources like it can begin to help you. I think babypips and sites for newbies would be far better if they started with this stuff first. But people want an easy out, so I suppose they will always exist like they do and be wildly popular.

The reason I quit posting here is because there is so much to this stuff, that it cannot be effectively taught/learned in this format. It's something that a person needs to spend some time with on their own. Don't get too caught up on Darkstar, Gaston and the others. They didn't find anything new, they just studied the mechanics of the markets, and went and did what others have been doing for decades.

Regards,

Scotty B
  • #488
  • Sep 5, 2009 11:12pm Sep 5, 2009 11:12pm
Hello all. Here is an interesting link that relate who are the current majors banks involved in the FX market and their respective shares of the whole fx market.

I found it very interesting as it gives what is their total shares of the fx spot market as a whole. As we know that there is no centralized exchange in the spot fx market, still, if we get figures from the majors banks involved, it can give us a pretty good idea of the total volume market traded in the spot fx market.

As for last 5 years in a row, Deutsch Bank is place 1st with about 20.96% of total volume traded in spot fx for 2008 until now.

Here is the link to euromoney survey:

http://mag.digitalpc.co.uk/ActiveMagazine/getBook.asp?Path=EMY/2009/05/01&BookCollection=EMY_AM&ReaderStyle=Normal&browserWindowWidth=1270&browserWindowHeight=974

Hope it help

Shreem
  • #489
  • Sep 5, 2009 11:33pm Sep 5, 2009 11:33pm
Quoting capitalist88
Probably. Someone posted a link to a video on here (Sam Seiden I think?) and he talked about the same thing. He was saying that the more times a level has been hit, the more likely it is that a real breakout will happen there.
Kind of like this?
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  • #490
  • Sep 6, 2009 12:23am Sep 6, 2009 12:23am
Quoting capitalist88
I almost forgot...I can never visit one of these mystic-cryptic-kung-fu-big-secret-pattern-underlying-all-of-trading threads without posting a link to THIS video!

EDIT: whoops, didn't want the embedded version

www.youtube.com/watch?v=YldowmD89ng (http://www.youtube.com/watch?v=YldowmD89ng)




Ohhhhh noooo, I feel a Fibonacci debate coming on.....

Anyway, I'm off to count the steps between my keyboard and the coffee pot, but first I've got to understand the significance of the steps and their relation to the dynamics of the coffee, the pot, and the water.......or, how about this for a whacky off-the-wall idea, I could just go and make a cup of coffee, the end result is the same!
  • #491
  • Sep 6, 2009 12:30am Sep 6, 2009 12:30am
Quoting pipmutt



Ohhhhh noooo, I feel a Fibonacci debate coming on.....

Anyway, I'm off to count the steps between my keyboard and the coffee pot, but first I've got to understand the significance of the steps and their relation to the dynamics of the coffee, the pot, and the water.......or, how about this for a whacky off-the-wall idea, I could just go and make a cup of coffee, the end result is the same!
Been over trading?

...
I believe . . .
  • #492
  • Sep 6, 2009 12:54am Sep 6, 2009 12:54am
Quoting pipmutt

Anyway, I'm off to count the steps between my keyboard and the coffee pot, but first I've got to understand the significance of the steps and their relation to the dynamics of the coffee, the pot, and the water.......or, how about this for a whacky off-the-wall idea, I could just go and make a cup of coffee, the end result is the same!
  • #493
  • Sep 6, 2009 2:27am Sep 6, 2009 2:27am
hello all,

i've read some of this thread yesterday and woke up this moment with some idea.

i once looked at level2 broker data and saw size and price. when i see a big number of orders appear at a price beyond a tested support/resistance this could be a place to get in quick before the (stop?) orders are triggered.

http://www.mbtrading.com/images/features/md1b.gif

i don't realy remember how this data looks when it moves... have to wait untill monday.

the fact that it's data from a broker is no problem i think, because we want to know what the herd is doing.

i want to thank all the contibutors here. the olsen paper and larry harris e-book will help me understand market structure wich is most importand.

greets pax
even with my eyes open i cannot see everything
  • #494
  • Sep 6, 2009 3:00am Sep 6, 2009 3:00am
Quoting Scotty B
Hey eveybody...
Great post Scotty.

There's a couple of things I'd like to add that may help someone. If not, it's no sweat off my back.

First is the statement my mentor (a good friend) made to me at the beginning of my journey some years ago.

"I can help you build your path, but you're the one who has to walk down it"

Skfx has laid a pretty good path IMHO. It's up to you to walk down it.

Second, Darkstar, Gaston and daytrading all appear to have a number of years of first hand experience in the industry. This alone would be worth it's weight in gold. Most of us here are home traders, we're way behind the field so-to-speak.

And lastly execution. That's what it's all about. Not just in trading, but everything you do in life.

Think of footballer. Here in Australia we have two types of football. Aussie Rules and Rugby. Do you think they know the physics behind the sport they play? Ha! No they don't, most of them are bone heads (I used to be one. Still am... lol).

One thing they all have in common is that they know how and when to execute to do their job, and they do it the better than anyone else. That's why they are Pro's.

Quoting skfx
Price action is half the equation the other half you cannot see.
The trouble for most is that the half you cannot see is the half you wish you could.
Many are wishing they could and seem to be spending all of their time trying to find it.
  • #495
  • Sep 6, 2009 4:16am Sep 6, 2009 4:16am
There have been some interesting things posted in this thread. I think there is enough information in the posts and in the reading to fill in the gaps in anyone's education about how the market operates. Because that's what is really key - not trading based on a mythology or superstition, but based on the realities of supply/demand, buyers sellers and who the participants are, their motivations and their approaches to the markets. All this time I thought the markets were something that they are not. Blue pill or red pill? That's the choice we each have whether to do the research and investigate and learn and understand, or if we're content to shoot the bull in the various threads going around in circles being full of knowledge. As one of the Market Wizards said, "Everyone gets what they want out of the market. Everyone." That's true for this thread as well.

I see some who are expanding their knowledge/understanding, some who are content with what they have and a few who are questioning what they have already learned and replacing it with new understanding based on research, facts and actual market dynamics. But just like a bell curve the mass of mediocrity stays stuck in the middle, doing the same things they have always done and comfortably thinking the same thoughts they have always thought. I appreciate the productive contributions of many and will leave you all to your own research. In my view it's all about assimilating the information in the right way so that your picture of the market conforms with how it actually operates. Then with that correct knowledge base, devising a strategy to exploit how things operate. And then it's all about execution. Some of my favorite quotes from the thread:

Quote
If there is one trait as a human that has helped me it's this......HUMILITY.
A humble person NEVER stops learning.

Quote
For the big players,they NEED to place orders,they have no choice.You and I though,it's more of a want thing.We are not forced to do business unless we want too.This is an edge in itself,another one.Think about what this means.
Hint:we get too watch the big nutcases push capital around.But we need not get involved until we know the hand.

Quote
I told you guys it is what you 'cannot' see.

99% of retail traders stop at price.If you stop at price you just haven't gone far enough.
Price has it's place,don't get me wrong,but she lags I'm afraid.
With every tick made,it is H-I-S-T-O-R-I-C-A-L data.
You need to trade out in front.

Quote
When your trading blind you really think that it was your system/your edge that you had devised that cut it out for you.HA,what a big joke that is.Talk about no idea.

Quote
There is a window.You need to get yourself into that window before most.The quicker you are,the more you make,the less risk you take(if any).
When you get in early,everyone is your best friend.

Quote
Look,don't worry if you don't GET IT.If you remain around long enough there may be a glimmer of hope,just a glimmer.
These guys will agree with me that the market is NOT random,it is inefficient.Most will never find these inefficiencies.That's the way it is though.I cannot help it.
If everyone knew where would we be?

Quote
BTW,if someone 'gets' it,then go and help yourself to the market and count yourself blessed.

That's the plan! Many thanks, and best regards!

I'll leave you with the following look at a proprietary commodities liquidity provider:
http://www.youtube.com/watch?v=KqoM3ktuAf4&feature=related
  • #496
  • Sep 6, 2009 5:28am Sep 6, 2009 5:28am
Quoting FXEZ
I'll leave you with the following look at a proprietary commodities liquidity provider:
http://www.youtube.com/watch?v=KqoM3ktuAf4&feature=related

An interesting quote from that clip a minute and a half in....

"......there's young people who've made tens of millions of dollars and they're just..they don't know anything about what they're trading they just understood the pattern of the commodity...."

....it seems, for trading at least, we only need the blue pill
  • #497
  • Sep 6, 2009 5:28am Sep 6, 2009 5:28am
Quoting PeterFM
My Limit was a bit before yours (1.4217) and my exit was 1.4320. Close?
Nice. Your exit was even better than mine, I got out at 1.4305, no need to tempt the market trying to make perfect trades...although yours was pretty damn close. My risk appetite is usually rather small by the end of the week.


Many posts have been made since yesterday...I'll reply again when I catch up
  • #498
  • Sep 6, 2009 5:51am Sep 6, 2009 5:51am
Quoting jpat1023
Nice. Your exit was even better than mine, I got out at 1.4305, no need to tempt the market trying to make perfect trades...although yours was pretty damn close. My risk appetite is usually rather small by the end of the week.
As the man said..'everyone gets what they want from the market' or something like that.
  • #499
  • Sep 6, 2009 8:53am Sep 6, 2009 8:53am
Quoting Ferrari
It is vital we align our market beliefs with the reality of the market. Our belief system is our trading method after all.
Your annotation of that chart sum up my exact belief of what was happening too. I'm glad I'm not going mad.
"I made all my money by selling too soon"
  • #500
  • Sep 6, 2009 9:39am Sep 6, 2009 9:39am
Quoting Bleek
Your annotation of that chart sum up my exact belief of what was happening too. I'm glad I'm not going mad.

Supply and demand are simply the mechanics, it's the motives of the people behind that supply and demand which the OP was focussing on, that's the 'who', 'why', and 'where' he was referring to in his opening post....


Quoting skfx
This thread will be a discussion about ORDERS.
Who places them?
Why they place them?
Where they place them?
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