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Domino's Price and order flow trading

  • #521
  • Edited 12:38am Apr 11, 2010 12:25am | Edited 12:38am
Quoting Darkstar

....When the market moves against them they aren't accumulating losses, they are building inventory. Price seldom ever moves in one continuous straight line.....
Commonly called 'averaging', nothing new and something which retail traders do as well, sometimes to their peril. Works great.....until price does move in a straight line, without any meaningful retracement (ask Xaron!). Grid traders use a similar tactic, their biggest problem is being left with open trades that can have some quite substantial unrealized losses as price moves further and further away from breakeven.

.....and it's far from being 'seldom', it can be a frequent but unexpected occurrence particularly in low yielding currencies used to fund carry trades. A hint of risk aversion can see some quite spetacular one-way moves as traders bail out.

This quote from John Maynard Keynes seems appropriate here - "the market can stay irrational longer than you can stay solvent"!

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  • #522
  • Apr 11, 2010 12:43am Apr 11, 2010 12:43am
Quoting jolany
exactly.
they have deeper pocket to do that.
It's all relative, retail traders can trade in smaller increments right down to one unit!

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  • #523
  • Apr 11, 2010 12:48am Apr 11, 2010 12:48am
Quoting Scotty B
It's one of those things that hard to wrap your mind around
Really? With a bit of creative position sizing and trade management it's not that hard to see how it works is it?

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  • #524
  • Apr 11, 2010 1:13am Apr 11, 2010 1:13am
Quoting pipmutt
You posted a chart for EUR/GBP here and said "how about this one?". I was asking in this post if you could explain what you're looking at, your thinking, and what your plan would be, just so we have a clear example. Thanks!

Here's the post again to save you looking it up.......
SZ - it is support so we are looking long.. 9 extremely noticable.. with L 12 or so compressed orderzones above it.. Diamond breakout .. good and strong off the 8700 big daily support zone long.. new news germany agreeing with greece loans.. lower stops broken and rejected and price resumed to me adds strength. This seems to coincide great with the other pairs price patterns now.. as well..
  • #525
  • Apr 11, 2010 1:16am Apr 11, 2010 1:16am
Quoting pipmutt
Commonly called 'averaging', nothing new and something which retail traders do as well, sometimes to their peril. Works great.....until price does move in a straight line, without any meaningful retracement (ask Xaron!). Grid traders use a similar tactic, their biggest problem is being left with open trades that can have some quite substantial unrealized losses as price moves further and further away from breakeven.

.....and it's far from being 'seldom', it can be a frequent but unexpected occurrence particularly in low yielding...
6 years ago I blew an account doing this.. wasnt much at the time 500 bucks but the horror of that day still bothers me down deep. I did do some recent new research on grid mostly just seeing if I could break that problem.. still working on it lol as a side project..
  • #526
  • Apr 11, 2010 1:27am Apr 11, 2010 1:27am
Quoting hornet
this is life....after spending all day listening to my 6yrs old i need a rest and relax by thinking about trading....


LOL
well I spent all day trying to find a motorcycle thats what im doing lol... not so much looking at charts haha.. Im thinking about a 1948-1953ish HD panhead.. I have an obsession with vintage... wanna get a good that I like there is about 1,000,000 square miles of the united states I need to explore on it.
  • #527
  • Apr 11, 2010 1:45am Apr 11, 2010 1:45am
Quoting domino
SZ - it is support so we are looking long.. 9 extremely noticable.. with L 12 or so compressed orderzones above it.. Diamond breakout .. good and strong off the 8700 big daily support zone long.. new news germany agreeing with greece loans.. lower stops broken and rejected and price resumed to me adds strength. This seems to coincide great with the other pairs price patterns now.. as well..
Ok, thanks for the explanation, I don't quite follow this bit though "lower stops broken and rejected". The low was 0.8704, do you not think a cluster of stops were more likely to be below 0.8700, and if so why weren't they targetted/hunted/triggered?

So what now, trade a break for a possible move to above 0.8800? (by the way this is just to get your thinking, it doesn't matter if the trade wins or loses).


(Yeah I blew an account doing that too, it was an MT4 EA that went nuts with leverage one night! Shame because it was doing great up to then, lol)

Anyway I'll let you get back to your weekend, I'll save anything else for during the week!

ps/ newer news, Poland, maybe that will have a short-term impact on Eur?

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  • #528
  • Apr 11, 2010 2:40am Apr 11, 2010 2:40am
The truth is the market is actually a battlefield. And do not be mistaken that anyone can move it as they pleases. But don't be mistaken that the Banks are there to Screw traders up, Their role is as custodian and moderator(if you like to the activities) Marketmakers (Interbank, not those you may be familiar with) They are liquidity providers helping large corp orders get filled. esp when mkt thins out and orders at at different level staring at each other, So they move around with price shades to try to get the orders to match out. therby providing a service to the corp. community.
To transfer risk from party to party. They move together because they can actually "feel" each other from the way the prices are quoted. How its shading , whethers its tearing, where certain sector are scuttering because they have been hitted by giant corp. You would be suprised at how large some order get. Imagine a customer calling you for a price to deal for 500 million USD on 1 price. What would you do? And for info that's middium cust. Do you know what's the daily transacted volume?

Maybe if you will ponder on this questions ?
What is the market you are actually trading in?
Whos market is it? whos the owner?
Why does it move? What makes it move?
Have you heard of "open market operation"?

We are actually going into the Structure of the Markets.
If you have time, read this link carefully.

http://www.ny.frb.org/education/addpub/usfxm/
also wiki about "Bretton Woods Agreement"

For Indept understanding read this book, I think may be out of print. try library
"Paper Money" by Adam Smith, dell publishing Co copyright by George J W Goodman.1981
  • #529
  • Apr 11, 2010 2:49am Apr 11, 2010 2:49am
Quoting Mr-Forex

If there sits a big buying interest on the bid but nobody is willing to sell - the price will go down.
If the huge buying interest will be served the price will rise.
Hi Forex, Im trying to understand about what you said (in the red ink) but it doesn't make sense to me at all. I hope you could elaborate on that statement.

Quote
Yesterday was a typical day in E/U where the big money absorbed all selling before the big up move happend. I took a time but finally it rallyed.
Everybody who can read order flow correctly have noticed it.

On important support/resistance levels the big money always shows up.Every time.
A good indication for breakouts is that the bid side suddenly becomes equal or bigger than the ask size.
How do you know or recognize that big money was absorbing the selling? how you recognize the big money is showing up at the important S/R ????
Trading is the game of fear and greed.
  • #530
  • Apr 11, 2010 3:31am Apr 11, 2010 3:31am
Signing up.

Thanks for the efforts.

The best of luck to you---and to all of you on the thread.


Lenoxer
  • #531
  • Apr 11, 2010 3:33am Apr 11, 2010 3:33am
Dealers will cut the volume at the bid or ask as they gauge the demand increasing on either side. This allows price to move quicker and lowers their risk.

I don't see how this stuff is any use unless you want to learn to be come a dealer. You cant use the same strategy as the Sell side its a totally different side of the market.
Economists have forecast 9 out of the last 5 recessions
  • #532
  • Apr 11, 2010 3:52am Apr 11, 2010 3:52am
Quoting pipmutt
It's all relative, retail traders can trade in smaller increments right down to one unit!

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retail trader cant .not enough capital(to hold any level)it causes big loss.
mm can .they have enogh capital to hold sometimes a level in the ask or bid.
big institutions joins with each others.
  • #533
  • Apr 11, 2010 4:48am Apr 11, 2010 4:48am
What I dislike about sheeps, dogs, sharks, big money, small money, losers, stop hunting, front-running is the following:

You all suppose that there's only one big bank which can control the market and thousands of small traders who are always undercapitalised and wrong.

I see it as an arena in which thousands of banks, funds and corporations try to outsmart each other. And any kind of manipulation of the market will be very fast compromised by the player which detects it as an inefficiency.

Parazite, I found your example very wrong. One institution wants to buy 500 contracts at 3900. So what? Aren't there other institutions who want to sell 500 at 3900, or want to buy 1000 at 3910, or sell 500 at 3920? Some of them want and some of them must. According to you, everybody almost stops trading to make way for your institution alone to have a great time in the markets.

So, can you show us some proof or smart arguments related to this theory?
  • #534
  • Edited 5:30am Apr 11, 2010 4:57am | Edited 5:30am
Quoting Sauron
What I dislike about sheeps, dogs, sharks, big money, small money, losers, stop hunting, front-running is the following:

You all suppose that there's only one big bank which can control the market and thousands of small traders who are always undercapitalised and wrong.

I see it as an arena in which thousands of banks, funds and corporations try to outsmart each other. And any kind of manipulation of the market will be very fast compromised by the player which detects it as an inefficiency.

Parazite, I found your example very wrong....
No no, he's spot on. What he describes about reversals and what happens in those areas is spot on. You'd be wise to go check out what he's saying rather than demand more more more. He pretty much laid it all out, now you go put it together.
  • #535
  • Edited 9:07am Apr 11, 2010 5:18am | Edited 9:07am
And he deleted his post. Great.
  • #536
  • Apr 11, 2010 6:04am Apr 11, 2010 6:04am
OK, using google I was able to painstakingly reconstruct his post, and found it was basically a copy and paste from various articles from www.camron.com.au
  • #537
  • Apr 11, 2010 6:07am Apr 11, 2010 6:07am
Quoting Parazite
The usual psycho-babble. Now there is an avalanche of threads on Tape-Reading.....A common complaint - it's like reading the same book over again.
hey parazite.
ur in the game.
lots of peeople didsnot realised what u shared.and of course they doesnot know how instituions follow each others.
edit:i have just seen u deleted that.better its not for someone who is looking for holly grail.
  • #538
  • Apr 11, 2010 6:12am Apr 11, 2010 6:12am
Quoting eurotrash
OK, using google I was able to painstakingly reconstruct his post, and found it was basically a copy and paste from various articles from www.camron.com.au
does it matter?

what he posted that was absoulutely right.
  • #539
  • Apr 11, 2010 6:22am Apr 11, 2010 6:22am
Quoting trade price
does it matter?

what he posted that was absoulutely right.
Sure it may or may not be right, I'm just saying that anyone can copy and paste info that has been painstakingly researched and written by others and try to pass it off as their own (note: copy/paste from articles without acknowledging it's someone else's work = trying to pass it off as your own) and make it appear as if they know what they're talking about.

I'm not suggesting that Parazite doesn't know what he's talking about, I'm sure he does, but it's just not right what he did. And it's sort of directed to Scotty as well, given his responses to P's post. Anyway it's deleted.
  • #540
  • Apr 11, 2010 6:29am Apr 11, 2010 6:29am
Quoting eurotrash
Sure it may or may not be right, I'm just saying that anyone can copy and paste info that has been painstakingly researched and written by others and try to pass it off as their own (note: copy/paste from articles without acknowledging it's someone else's work = trying to pass it off as your own) and make it appear as if they know what they're talking about.

I'm not suggesting that Parazite doesn't know what he's talking about, I'm sure he does, but it's just not right what he did. And it's sort of directed to Scotty as well, given his responses...
i know its not good to post someones else posts but its valid as long as it helps new people to understand this business.(imho)
and of course he did not said he knows everything.he was helping people. and he did copy and paste that helps someone.
if u can do that, please do. as long as it helps someone.
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