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Stating The Obvious and The Quest For Wisdom

  • #61
  • Mar 3, 2010 12:01pm Mar 3, 2010 12:01pm
Quoting Leonlorenzo
I'm not sure of the purpose of the Pm's you sent to me. You asked no questions and I'm unsure what kind of response you would like. I agree with one thing you have said... the use of vouches. I have asked for my vouches to be removed in the past and have stated more than once that members should be somehow verified for profitability before being given them. The problem is, i suppose, that there would be very few members given the badge should profitability be a criteria for them being given.

The poster I called a pleb, he speaks in clichés,...
I agree with that part .

I guess my Pm wouldn't make sense without reference to a post of yours that got removed from this thread. I thought since you posted it less than 24 hours ago you wouldn't have forgot about it.

http://www.forexfactory.com/showpost...88&postcount=4

Quote:
Originally Posted by Deusomega http://cdn.forexfactory.com/images/buttons/viewpost.gif
Milenko there is no need to respond to you. I think your recent post history reveals what type of individual you are. And Leon I meant no disrespect or anything but one can almost feel the frustration and cynicism in your post.

"What are your own views, if you don't mind me asking?

Do you make trades with the following, very shallow, thought process... 'Price will bounce because it has bounced in the past' and 'Price is going up so it will continue to go up'? This is the sort of reasoning the majority of chart traders use.

You need to be faster, smarter, or at least stronger (have better information) than other traders to win."

Therefore I believe my Pm's to you flow logically from your inquiry.

Would you not agree? And yes there wouldn't be too many vouched members if profitability was the main criteria. But it would save newbies a lot of trouble later when they realize some of the vouched members are not profitable themselves. After all, profitability is the only attribute that reveals one's competence and prowess in this game.
  • #62
  • Mar 3, 2010 12:27pm Mar 3, 2010 12:27pm
Quoting Deusomega
I agree with that part .

I guess my Pm wouldn't make sense without reference to a post of yours that got removed from this thread. I thought since you posted it less than 24 hours ago you wouldn't have forgot about it.

http://www.forexfactory.com/showpost...88&postcount=4

Quote:
Originally Posted by Deusomega http://cdn.forexfactory.com/images/buttons/viewpost.gif
[i]Milenko there is no need to respond to you. I think...
Lol, I mentioned something about memory a few posts back. My bad, I hope you accept my apology. Ill re-read the Pm's and get back to you.

Leon
Living the adventure in my head.
  • #63
  • Mar 3, 2010 12:29pm Mar 3, 2010 12:29pm
Quoting Scotty B
How about you guys? You can have whatever data you want, what would you put on your list and why? Hopefully this gets interesting!


Scotty B
Good post, rings a bell. I am in a similar boat and I too use bullet points.

Here is a list of things I wanted to study. I made this list about 18months ago:

 

  1. FX Options
  2. Futures
  3. Supply and Demand
  4. Bid and Ask
  5. Trends
  6. Ranges
  7. Liquidity
  8. Federal Reserve
  9. Broker Structure
  10. Banks searching for liquidity (filling as many orders as possible)
  11. Price discovery for securities
  12. Participants and purposes
  13. Bank and other market maker trading methods (front running, stop hunting, etc.)
  14. Liquidity and block trades
  15. News event liquidity
  16. Stops and options
  17. Liquidity vacuum
  18. Capitalizing on order flow


Unfortunatley, though i dont consider myself an expert on these topics, I have studied each one in great depth and not yet found consistent profitability as measured in longevity. I am about break even for the year at this point, which is hardly exciting.

All I ask for is a chance to prove that money cannot make me happy.
  • #64
  • Mar 3, 2010 12:43pm Mar 3, 2010 12:43pm
Quoting Marsh
Good post, rings a bell. I am in a similar boat and I too use bullet points.

Here is a list of things I wanted to study. I made this list about 18months ago:
[list][*]FX Options[*]Futures[*]Supply and Demand[*]Bid and Ask[*]Trends[*]Ranges[*]Liquidity[*]Federal Reserve[*]Broker Structure[*]Banks searching for liquidity (filling as many orders as possible)[*]Price discovery for securities[*]Participants and purposes[*]Bank and other market maker trading methods (front running, stop hunting, etc.)[*]Liquidity and block trades[*]News...
Add to that maybe looking in to the institutions who do the most currency trading. Wiki shows:

1 Deutsche Bank 20.96%
2 UBS AG 14.58%
3 Barclays Capital 10.45%
4 Royal Bank of Scotland 8.19%
5 Citi 7.32%
6 JPMorgan 5.43%
7 HSBC 4.09%
8 Goldman Sachs 3.35%
9 Credit Suisse 3.05%
10 BNP Paribas 2.26%
Living the adventure in my head.
  • #65
  • Mar 3, 2010 1:40pm Mar 3, 2010 1:40pm
Quoting Scotty B
Because there are not that many forms of market data, the only thing I can imagine that you are refering to is volumes in a market profile sense. Yes, I've seen MP call themselves orderflow traders to. Kind of funny really. The other source would be the tape, which only exists in fx futures. I've looked into it but I'm not much of a tape reader..
No, I wasn't referring to volume, as we all know it isn't exactly available for our market, nor market profile. I was simply referring to the fact that most people will take a trade based on a picture of candles rather than on the information those candles are portraying.

on a side note, since volume is unattainable, I have found Time can be used as a substitute to a certain degree.

Quote
The only real edge I know of is price's tendancy to turn and rebounce off the point of control, which is really no secret. Is it viable? Sure, but so are IB's sometimes. I'm interested in gaining entries into the market that I can ride for weeks to months at a time. The fewer trades it takes to gain the position the better. This is the question I'm working to answer, but even random entries would eventually stick. I guess you could say I'm trying to be as cost efficient as possible.
It sounds like you want to transition from a trader to a fundamental investor (yes, there is a difference), you will need more capital, bigger stop losses, way more data, and proprietary models to plug in new data and see how it affects your outlook......OR, connect the last two major bottoms on your chart and buy everytime price nears that line in the future

Quoting scotty
If you think that taking only a couple trades per month will only net you 2-3% then you have some re-examining to do.
I'm assuming this isn't directed at me...

Quoting scotty
Thanks for the tip on dealer to dealer interaction, but I don't know where to start looking at that. If you're talking about 'hot potato' trading among dealers, I'm already studying how this could be useful knowledge.
Sure, "hot potato", Dealer inventory management, how dealers manage orders depending on the customer(commercial or financial), the ideal market position of currency dealers, information flow, etc......these things and more are important because they affect the dealer which affects price because in the end, the only entity that prices pairs are currency dealers.

Quote
Sorry to everyone reading.. I don't intend for this thread to turn into a system or orderflow trading thread. The truth is that the options for gaining entry to a trend following trade are legion, but I can't help wondering what the best entry approach actually is. Maybe it's only truly clear in hindsight.
According to my method, the best entry is the one with the highest profitability and the lowest amount of capital I have to lose before I know I'm wrong. I know it seems obvious, but this actually leads to the "dreaded bottom and top picking", which most retail traders believe is a waste of time and will only lose in the end, which is true if you don't know what you are doing. Not that I spend all day picking tops and bottoms, but for example, if the daily trend is obviously down and the hourly trend is up, I'm looking for a 'top' in the hourly trend in order to sell.
  • #66
  • Mar 3, 2010 1:57pm Mar 3, 2010 1:57pm
Quoting jpat1023
Not that I spend all day picking tops and bottoms, but for example, if the daily trend is obviously down and the hourly trend is up, I'm looking for a 'top' in the hourly trend in order to sell.
I'm not sure who said it "Pick bottoms, smelly fingers", lol.

I'm not saying it's good or bad, whether I thought is was either would depend on how you were doing it.
EDIT: And ofc It obviously doesn't really matter what I think. Thought I better add this in case there is anyone else hanging around finding reasons to pick on me.
Living the adventure in my head.
  • #67
  • Mar 3, 2010 2:26pm Mar 3, 2010 2:26pm
Quoting Leonlorenzo
I'm not sure who said it "Pick bottoms, smelly fingers", lol.

I'm not saying it's good or bad, whether I thought is was either would depend on how you were doing it.
EDIT: And ofc It obviously doesn't really matter what I think. Thought I better add this in case there is anyone else hanging around finding reasons to pick on me.
haha yes you can get smelly fingers, which is of course why its so dreaded...
But someone is picking (causing) bottoms and tops, or else price would run up infinitely
And empirical studies have shown that the first buyer is the most informed, with each successive buyer being less and less informed until you get to the uninformed who are buying at tops and selling at bottoms...and paying the informed traders

There is a method about it, I have areas on my chart where I expect a turn and get in the market due to certain factors...price and time being two of the most important.
  • #68
  • Mar 3, 2010 2:53pm Mar 3, 2010 2:53pm
Quoting jpat1023

It sounds like you want to transition from a trader to a fundamental investor (yes, there is a difference), you will need more capital, bigger stop losses, way more data, and proprietary models to plug in new data and see how it affects your outlook......OR, connect the last two major bottoms on your chart and buy everytime price nears that line in the future
You don't need a lot of capital to invest using fundamentals... just take a look at Xaron. You form an outlook for the currency and use low leverage which enables you to have a lot bigger stops.
  • #69
  • Mar 3, 2010 3:06pm Mar 3, 2010 3:06pm
Quoting Deusomega
You don't need a lot of capital to invest using fundamentals... just take a look at Xaron. You form an outlook for the currency and use low leverage which enables you to have a lot bigger stops.
True. But your Profit/Time ratio will be lower. ie. smaller profit over longer time, taking profit as a percentage of your account. Yes we all know lower leverage reduces "risk", but it also reduces "reward" by the same factor.
  • #70
  • Mar 3, 2010 3:16pm Mar 3, 2010 3:16pm
Quoting jpat1023
haha yes you can get smelly fingers, which is of course why its so dreaded...
But someone is picking (causing) bottoms and tops, or else price would run up infinitely
And empirical studies have shown that the first buyer is the most informed, with each successive buyer being less and less informed until you get to the uninformed who are buying at tops and selling at bottoms...and paying the informed traders

There is a method about it, I have areas on my chart where I expect a turn and get in the market due to certain factors...price and...
Id say that the 1st buyers/sellers may be the most informed in some situations, but in others how informed one is makes no difference, price simply turns because the scales tip. If everyone has bought then price will drop with few sellers, it doesn't mean that sellers were more informed.

To go with Scotty's 'state the obvious' theme: The best prices are available for the least amount of time.
Living the adventure in my head.
  • #71
  • Mar 3, 2010 3:21pm Mar 3, 2010 3:21pm
Quoting Leonlorenzo
To go with Scotty's 'state the obvious' theme: The best prices are available for the least amount of time.
Exactly.

I touched on this in the 'Behind Order Flow' Thread months ago......this also leads into the little comment under my name...

Quoting leon
Id say that the 1st buyers/sellers may be the most informed in some situations, but in others how informed one is makes no difference, price simply turns because the scales tip. If everyone has bought then price will drop with few sellers, it doesn't mean that sellers were more informed.
But why did the scales tip at this price, at this time? Who got into the market? How big are their orders? What does it take to reverse a trend?
A few things to think about, but I feel like we are taking scotty's thread for a ride, and I don't want to intrude....although there wasn't much of an original point to this thread, I don't want to step on any toes...
  • #72
  • Mar 3, 2010 3:41pm Mar 3, 2010 3:41pm
Quoting Leonlorenzo
Id say that the 1st buyers/sellers may be the most informed in some situations, but in others how informed one is makes no difference, price simply turns because the scales tip. If everyone has bought then price will drop with few sellers, it doesn't mean that sellers were more informed.

To go with Scotty's 'state the obvious' theme: The best prices are available for the least amount of time.

I see this a lot in posts not picking on you specifically but I like how Pring phrases this. For every buyer there must be a seller so the number always stays constant. There are never more buyers than sellers and vice versa. Change comes when either those willing to buy or those willing to sell become more enthusiastic to do one or the other. Thereby causing either buyers to pay more at a particular point in time or sellers to be willing to sell for cheaper prices.

It's this enthusiasm to do one or the other that changes the current trend.
  • #73
  • Mar 3, 2010 3:53pm Mar 3, 2010 3:53pm
Quoting Deusomega
I see this a lot in posts not picking on you specifically but I like how Pring phrases this. For every buyer there must be a seller so the number always stays constant. There are never more buyers than sellers and vice versa. Change comes when either those willing to buy or those willing to sell become more enthusiastic to do one or the other. Thereby causing either buyers to pay more at a particular point in time or sellers to be willing to sell for cheaper prices.

It's this enthusiasm to do one or the other that changes the current trend.
Yes for every buyer there must be a seller, price changes when someone agrees to trade at a worse price than the current one - the current one is an illusion created by charts. Something is only worth what someone is willing to pay.

In other words, once liquidity is consumed at the current price a market order demanding further liquidity changes the price/last traded price. Thats it in theory.



Edit: Deleted a mix up in thought.
Living the adventure in my head.
  • #74
  • Mar 3, 2010 4:02pm Mar 3, 2010 4:02pm
Quoting Deusomega
For every buyer there must be a seller so the number always stays constant. There are never more buyers than sellers and vice versa.
Maybe it's splitting hairs or semantics, but there isn't necessarily a 1:1 relationship between traders since the market maker is able to take the other side of your trade, so if I buy and there isn't another trader selling the market maker will sell to me.

Is that the same as always having buyers and sellers? I don't believe it is.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #75
  • Mar 3, 2010 4:06pm Mar 3, 2010 4:06pm
Quoting Deusomega
I see this a lot in posts not picking on you specifically but I like how Pring phrases this. For every buyer there must be a seller so the number always stays constant. There are never more buyers than sellers and vice versa. Change comes when either those willing to buy or those willing to sell become more enthusiastic to do one or the other. Thereby causing either buyers to pay more at a particular point in time or sellers to be willing to sell for cheaper prices.

It's this enthusiasm to do one or the other that changes the current trend.
No, common misinterpretation. I could be the only seller in the market and push price down if I absorb all the buyers at this level.

Here's the reality, the number of lots that have been bought up to this point is the same number of lots that have been sold up to this point, but that certainly doesn't mean that we always have the same number of buyers and sellers, or more importantly, the same number of traders that want to buy and want to sell.

I could go into a long essay about microstructure and how orders are actually executed, matched or pocketed or pushed out to other dealers, but I'll save my breath for now and let you dive into some research.
  • #76
  • Mar 3, 2010 4:08pm Mar 3, 2010 4:08pm
Quoting LasVahGoose
Maybe it's splitting hairs or semantics, but there isn't necessarily a 1:1 relationship between traders since the market maker is able to take the other side of your trade, so if I buy and there isn't another trader selling the market maker will sell to me.

Is that the same as always having buyers and sellers? I don't believe it is.
Yes it is the same thing you said it yourself... a buyer or seller doesn't have to be a trader.
  • #77
  • Mar 3, 2010 4:12pm Mar 3, 2010 4:12pm
Quoting jpat1023
Here's the reality, the number of lots that have been bought up to this point is the same number of lots that have been sold up to this point, but that certainly doesn't mean that we always have the same number of buyers and sellers, or more importantly, the same number of traders that want to buy and want to sell.
Good point, if someone has 500 billion dollar order to sell at 1.5 then that level will hold until all that money is absorbed by the buyers. Price may move far away from that level and come back at a later time days/weeks/months later and get knocked back down again until one day that level is taken out. History repeats.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #78
  • Mar 3, 2010 4:14pm Mar 3, 2010 4:14pm
Quoting jpat1023
No, common misinterpretation....
If you are the only seller in the market the spread will change but until someone buys from you that price doesn't mean anything. There still has to be someone willing to buy from you before that price means anything at all.

No one argued that each buyer and seller has to sell the identical number of lots... that's ridiculous. It's common sense that traders vary in size.

I said for every seller there must be a buyer. I don't care if the one initiating the transaction is a trader, market maker, dealer, etc in the end for someone to sell something there has to be someone to buy to finish the transaction. If one individual large trader sells multiple lots to multiple buyers he of course becomes the seller to EACH buyer. Therefore the ratio stay constant at 1:1 always.

Please do write the essay in which there can be buyers without sellers. I'm sure the entire financial community would like to see it and revise existing economic texts post haste.
  • #79
  • Mar 3, 2010 4:23pm Mar 3, 2010 4:23pm
Quoting Deusomega
If you are the only seller in the market the spread will change but until someone buys from you that price doesn't mean anything. There still has to be someone willing to buy from you before that price means anything at all.

No one argued that each buyer and seller has to sell the identical number of lots... that's ridiculous. It's common sense that traders vary in size.

I said for every seller there must be a buyer. I don't care if the one initiating the transaction is a trader, market maker, dealer, etc in the end for someone to sell something...
Semantics...
You didn't clarify we could count a buyer multiple times, so it made it sound like you meant 1:1 in terms of people...
  • #80
  • Mar 3, 2010 4:27pm Mar 3, 2010 4:27pm
Quote
No one argued that each buyer and seller has to sell the identical number of lots... that's ridiculous. It's common sense that traders vary in size.
And neither did I, so what are you talking about...?

Quote
I said for every seller there must be a buyer. I don't care if the one initiating the transaction is a trader, market maker, dealer, etc in the end for someone to sell something there has to be someone to buy to finish the transaction. If one individual large trader sells multiple lots to multiple buyers he of course becomes the seller to EACH buyer. Therefore the ratio stay constant at 1:1 always.
So instead of labeling it buyers and sellers, which sounds like people, we could say for every lot bought, there must be a lot sold......which is all I was saying in my post...

Quote
Please do write the essay in which there can be buyers without sellers. I'm sure the entire financial community would like to see it and revise existing economic texts post haste.
I don't know what your talking about here...I never said there could be buyers without sellers...
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