Stating The Obvious and The Quest For Wisdom

Hmm thinking about IFR again I wonder how reliable the descriptions are given to each buyer and seller. Like exporter, sovereign, etc... DS is always saying to think about the participants and if these descriptors are reliable this might be a way of figuring out how solid the bids and offers are besides the size descriptor given(small large etc). By thinking of each group's primary purpose in forex....

Guys,

I feel like there is still too much complexity being applied here, and that it is ultimately a distraction.

Without explaining in great detail each step of my trading progress so far, let me just summarize the relevant points in a few lines. It has been over two years since I began my Forex journey, and almost all of it has been devoted to the study of order flow. Darkstar's posts ignited a fire in me that led to the most rigorous and in depth studies of any topic I have ever committed myself to. I read into every little price movement, thought about every possible participant, and ran into what feels like every wall imaginable, with nothing to show for it. At the beginning of this year I had all but given up on order flow trading. That is until Darkstar shed just a little more light on his trading, which freed me from the boundaries I had put upon myself.

The biggest, most eye opening things that I have learned in the past month have had nothing to do with orders, interest, stops, or options. What I found out was that I knew all of that. I did not figure out any specific entry criteria that had been missing all along. I discovered that I had all the information already at my fingertips.

Order flow trading is not a set of rules, it is a mindset. How many times has that been reiterated in this thread. Knowing that, everything else should lose some level of importance. At least that is what happened for me. I realize that the option barrier sitting on a big round number is only one small piece to the bigger puzzle. As I stop focusing on the details that don't matter, I am seeing things I was missing before.

What I am learning is that I do not need to push myself any harder. I do not need to read any more articles or do any more research. What I need the most is to be in the market. There is no other way to apply order flow information than to trade it. It cannot be effectively back tested, it cannot be programmed, it can only be applied by a real life trader. The biggest wall keeping me out of the market is the belief that I do not have a "system" to trade, or the right information to trade. But I cannot develop the system OR the skill without having the experience of trading in the first place. All of us are still here because we blew up some initial account, and now we are way too scared to actually trade again until we are ABSOLUTELY sure we will make money. But I will never learn to trade without actually trading. Duh, right?

That is my point. Look at the other order flow thread, and see all the directions it went, all the avenues of possible research about each participant and way to look at the market. There is no way I can say that there are not edges imbeded in that kind of information, but at some point a trader needs to just let go and trade what he sees. Jesse Livermore has come up in this thread a few times. He is one example of a trader who spent his time learning by trading the market, not attending seminars or reading books.

Now, the question I am sure everyone wants to know is how my trading is doing? Well of course 1 month is no measure of success, but my bottom line has changed. That is not to say I am anywhere near the 5%, but I think I am definitely past the 95%. If there is any traders purgatory between failure and success, I am there.

I have opened a small sub account with Oanda. My goals are to find obvious points where order flow will be tipped in my favor, then position myself to ride the move. That is it. I will watch price and make decisions based on what I think is going on at the time. I expect each trade to be different, but at the same time have similar characteristics. Even if I blow this account up in 2 weeks, I bet that I will have learned more about order flow trading then the past 6 months of reading.

Anyway, this post is not really aimed at anyone specific, but more to the general direction of the thread. I honestly feel like there is not much else to be said about order flow trading than has already been said. That at this point it is truly up to the individual. I look forward to Darkstar's book, but I think I do for different reasons than I did before. We shall see.

Good luck,
Marsh

Hi Marsh !

Excellent quote man
We often get lost in reading a bunch of books, websites, watching
seminars, DVDS etc.

I've done that too and still do sometimes because it belongs to the learning
process.

If you have no mentor who pushes you in the right direction the costs
of searching are definitely higher....

I'm using the IFR News service by setting price targets based on the
information given.

Then I watch price action in combination with volume flow patterns.

If the signals match together I make my decision.

The difficult thing is to interprete the news presented.....

AS DS quotes trading the news alone doesn't make it....

Happy trading

Bernhard

Ask anyone who has ever been in a futures pit what OI is? They only have one definition: the one you quoted, not the one you coined.

That is my final response and well as the final post of this topic since everyone seems to have drank the coolaid of someone who just makes it up.

Otherwise Scotty you got a good thing going here.

One more.

Again it is mini futures not the large contracts I was referring to.

Yes it is true the large contract futures are much smaller than the spot market but there is correlation and some predictablility between the two forex types. The mini is next to useless though.

which tools will you be using to do it? Only chart? IFR? Any kind of order book?


thanks in advance

I definitely don't want to quibble or mince words, but I get confused because everytime price reverses there is always limit orders higher or lower one the price ladder. If the consumers of liquidity want to keep going in one direction I'm sure there would always be another price with another limit available.

Sometimes there is more or less "open interest" in the sense in which you used the term. Like that 200 bid I mentioned watching last week on an illiquid market. Size scares the market and they are careful around it. I'm sure there are other ways of seeing intention in the market with DOM but all I've found written about it is garbage. My own observations are all I really have to go on.

Maybe a thoretical example of how you look at mkt depth/open interest would help us understand better. If you are looking at DOM, what would you have to see that would raise your eyebrows?

I know you could possibly say that I'm making it an if x then y thing again, but this time I am going on a little more than just pure ignorance.

Supposedly there is an option play going on right now in EU (IFR). The barrier is at 3400.

There is... I scraped that euor long at 3425

Bearish IB setting up on the 15...

Attacker PA subterfuge?

In your experiance, what % of barriers are successfully defended? Watching PA right now it's pretty clear there is a fight going on at 3405ish.

Can't help that feeling that a long might be at play around here, or a bit lower, could be a very good one too, always ready to change my mind of course

I cut that short at BE BTW. I'm fairly confident it will go through, but there is a great deal of buy interest here and we have already done a 100+ pip move to get here. We may need a meaningful pullback first. If I hadn't just taken a big loss I'd push it, but I need a high probability win...

Anyway, very few defenses survive. They can sometimes win a batle, but if price is close they almost always lose the war.

rumor of a German newspaper report too ("eurozone finance ministers are questioning the function of the EU"), about an hour ago.

if the drop happened mid- to late-US session, would your view be different?
are there other factors that may change your view?

This defense is done...

Anyway, yeah there are a lot of things that would change my view. Everything happens in a context, so if it were late us session I would probably have a whole different opinion.

Substantial volume has come in at these lows. We may go back into range until there an actual decsision about Greece comes out later this week. I'd be surprised if a stop probe just below these lows does not occur, even if it's for a few pips. Everyone and their mom will put their stops there. I bet we'll go back to 3550 and wait till thursday/friday.

Around 375 perhaps...

Hi Darkstar !

Well not much defense here at 1.3400
Nice play !

Bernhard

All your stop are belong to somebody.

Very healthy volume now. I'd be real surprised to see this new low broken until EU Summit. This could easily be a medium term low if there is any good news later this week. Otherwise, like DS said, there will not be a bottom in sight. Eurozone is begining to look like a clown. If they can't get there own house together then why trust them with your dough. EU will fall to parity if Greece fails (I'll still be very surprised). Not instantly of course, but it will need to be really cheap for the world money to give a hoot about Euro again. IMHO of course.