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Domino's Price and order flow trading

  • #581
  • Apr 12, 2010 4:00am Apr 12, 2010 4:00am
Assuming that you didn't read this thread and the others related, we ask this because there are some persons here who don't seem to be able to put a position without overwhelming fear that the institutions made a rule to screw the retail trader. This fear makes them to question every 1-pip movement of the market.

As I don't agree with them because I've seen no proof, is it safe to assume that the stop-hunting is the exception and not the rule before every meaningfull movement?
  • #582
  • Apr 12, 2010 4:06am Apr 12, 2010 4:06am
Quoting daytrading
Pip,

There is no need for institutions/banks/funds to 'conspire' against retail traders. Reasons to enter the market for retailers are in most cases quite different from those of the professionals. With 'reasons' I don't mean the intentions of either to make a profit, but the actual reason to enter at specific price points.
It is not a need for them to conspire but I believe that on intraday basis the market is easily manipulated. It is difficult to see 2 big institutions going head to head against each other but it is easier to see them working together to move markets in the direction they want to be able to get their orders filled at better levels playing on the fact that they know where the small fish will be, where the small fish will play into the hands of institutions. It is not a need to do so but it is a game they play very often, this on intraday basis. On the overall moves of the markets over longer period of times I don't think this happens so much because fundamentals have effect on the markets.
The quality of your life is brought about by the quality of your thinking.
  • #583
  • Apr 12, 2010 4:10am Apr 12, 2010 4:10am
Quoting daytrading

Pip,......

.....Hope this helps.

regards
daytrading
Thanks, I think other people may have questions about how orders are processed and executed which also seems to be a grey area.
  • #584
  • Apr 12, 2010 4:28am Apr 12, 2010 4:28am
Quoting hornet
It is not a need for them to conspire but I believe that on intraday basis the market is easily manipulated. It is difficult to see 2 big institutions going head to head against each other but it is easier to see them working together to move markets in the direction they want to be able to get their orders filled at better levels playing on the fact that they know where the small fish will be, where the small fish will play into the hands of institutions. It is not a need to do so but it is a game they play very often, this on intraday basis. On...
There is no need to manipulate the market - it is more than likely that the top ten institutions in terms of size in the spot FX market have not only similar fundamental views on the value of a specific currency, but they all pay attention to support and resistance levels that can be seen by everyone. If you trade against the obvious, you get kicked (badly) in most cases. The market operates on a 'free will' and 'informed decision making' basis.

Take the example of a football field and the players trying to score. The professionals vs the retailers (I make this up here for illustration only). The professionals/institutions will wait to score when they are close to the goal (this I would regard as place and time for an opportunity), while the amateurs could be described as trying to score from unfavourable spots on the field at the wrong time - while their hindsight analysis will tell them to imitate the professionals and wait for the opportunity, i.e. scoring when the time and place is right.

Don't underestimate institutional's in their view of fundamentals.

Hope this helps.

regards
daytrading
Enter Signature
  • #585
  • Apr 12, 2010 4:36am Apr 12, 2010 4:36am
Quoting daytrading
Hope this helps.

regards
daytrading
Thanks for your opinion, relates to what I believe on bigger timeframe because of fundamentals.
The quality of your life is brought about by the quality of your thinking.
  • #586
  • Apr 12, 2010 4:54am Apr 12, 2010 4:54am
Quoting hornet
Thanks for your opinion, relates to what I believe on bigger timeframe because of fundamentals.
Correct: while many retailers see the short time frames in isolation - and their analysis (in isolation) might well be spot on (little punt here), institutional's who take a short position rarely do so without paying attention to the 'bigger picture'.

An example would be that intraday analysis might dictate a short - while the fundamental analysis and longer TF's show an up-trend. Retailers might be able to extract some value from taking a short - but only until the institutional's (re-) enter long positions based on the next level of support.

That can be close - which would as a result destroy current intraday short positions - or a little further away (in relative terms), and some day-trades work out fine. As long as these short term retail traders are aware what the basis is for such short term gains, that is a step in the right direction.

Hope this helps

regards
daytrading
Enter Signature
  • #587
  • Apr 12, 2010 5:35am Apr 12, 2010 5:35am
i have received a few PM asking for better explanations of how I trade. I will try and explain it again here. Just simple stuff. i try to follow price around and ride the waves.

Attached a picture of USDCAD. After the breakout on friday, price consolidated and retraced a bit during Sunday session. We can clearly see that price was pushed down for whatever reason and we had a "roof" at around 1.0040. Now we want to see that roof break for price to show a change of direction. HH and LL swings, 101 of technical analysis...right ?

So we see it gets broken at point 1.
then the move breaks out to point 2. where prices starts to retrace down to point 3.

4. is my entry candle. i use Joe Rosss TTE for entry.

my basic rule for filtering entry is also very simple:

i want 4. to be above 1. because this tells me that the breakout was sustained. we conquered that previous top and we are holding above it. it showed a follow through after breakout.

stop loss goes below 4, first target at 1:1 then BE+1 on remainder and trail.

very simple stuff but works on all timeframes, all products. not all react the same way, some setups show up better on 30 mins on some pairs. some other are better on 60 or 240. it all depends on which market you trade, what style you want to have.... maybe daily or even weekly


edit: adding EU chart also. same identical concept
Attached Image(s) (click to enlarge)
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The quality of your life is brought about by the quality of your thinking.
  • #588
  • Apr 12, 2010 6:00am Apr 12, 2010 6:00am
Hi Michael
in same trade on euro..
  • #589
  • Apr 12, 2010 6:02am Apr 12, 2010 6:02am
EURCHF is a setup that was not valid for me because 4. is above 1.
Attached Image (click to enlarge)
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The quality of your life is brought about by the quality of your thinking.
  • #590
  • Apr 12, 2010 6:02am Apr 12, 2010 6:02am
Quoting NKE
Hi Michael
in same trade on euro..
Hi Nick, nice seeing you around.
The quality of your life is brought about by the quality of your thinking.
  • #591
  • Apr 12, 2010 6:56am Apr 12, 2010 6:56am
Quoting hornet


Attached a picture of USDCAD.....

http://www.forexfactory.com/attachme...8&d=1271068439

Nice to see some practical examples.

Why not trade the breakout at (1) with a stop below that previous (white) bar's low?

Looking at that chart there are around 4 other similar set-ups (depending on how microscopic you want to get with the swings), all potentially profitable. Same with Eur/Usd and Eur/Chf charts.

I'm not trying to change your strategy because it obviously works for you, and I'm not trying to find fault, it's just a suggestion for something to do while waiting for your perfect set-up, more opportunities if you like.
  • #592
  • Apr 12, 2010 7:03am Apr 12, 2010 7:03am
Quoting pipmutt
Nice to see some practical examples.

Why not trade the breakout at (1) with a stop below that previous (white) bar's low?

Looking at that chart there are around 4 other similar set-ups (depending on how microscopic you want to get), all potentially profitable.

because trading breakouts is not what i do. i used to, but not any longer, this way works better for me and my rules.

imbalances in supply and demand make the market move. if the move is sustained and i get a retrace i try to exploit it, otherwise i pass.

yes, you can find them everywhere, on every timeframe and product. but then you will need to be selective by building rules around the things you see and how to use it
The quality of your life is brought about by the quality of your thinking.
  • #593
  • Apr 12, 2010 7:11am Apr 12, 2010 7:11am
Quoting Fx chartist
@Forex: IMHO, what you said is wrong, how come the market goes down if nobody is selling? It doesn't make any sense at all. The footprint chart you describe above indicated that you're misunderstood about it.
In all markets you can join/buy the bid or directly the more expensive ask price.Vice versa.

So in that case the sellers were still persent at the ask - the buyers ran out of steam.
  • #594
  • Edited 7:56am Apr 12, 2010 7:11am | Edited 7:56am
Quoting hornet

yes, you can find them everywhere, on every timeframe and product. but then you will need to be selective by building rules around the things you see and how to use it
I'm not really into statistics, supply and demand imbalances, or order flow, but it would be interesting to see some statistical analysis of taking every opportunity using simple analysis and paying for a few losers, as opposed to being selective using more in-depth analysis and only taking a few. Maybe the compromise would be to reduce risk on the less probable ones.

There's no denying there were more opportunites on those charts using simple analysis though.

By the way what made you stop trading breakouts?
  • #595
  • Edited 7:26am Apr 12, 2010 7:14am | Edited 7:26am
Quoting Scotty B
Yes, to do the momentum play you'd issue a buy stop for the breakout. This is just a conditional market order that only your broker sees/knows about. When your stop price trades, even for one lot, your broker will then execute a market buy on your behalf. This will contribute to further upside liquidity consumption, especially if there is a lot of buy stops in the area, whether they are stop losses (exits) or just plain old buy stops (entries).

You bring up another order type though. There is such a thing as a stop limit order. It works like a...

Thanks for your comments Scotty. I do have the Larry Harris book but I haven't got through it all yet. Nice book by the way.

OK, so we have a bunch of conditional buy orders resting above the swing high in anticipation of the breakout. These will be executed by the broker once price touches that level. Won't most of these be executed as marketable limit orders rather than plain market orders? (most people will be demanding a fill on the break at a certain fixed price won't they?).

My point is that a load of marketable buy limit orders triggered at the break (say 1.50) with a limit price of 1.50 will not contribute to the surge in price up the ladder other than by helping to absorb the offers at the 1.50 level.

If all those orders were market orders then the outcome would be quite different as, without a fill limit price, they could easily chase price up the ladder until they'd all been filled, causing a surge or spike upwards.

However I believe that when most retail folk play breaks they demand a fill at the break price and so don't use market orders to enter. I can't understand how a surge of limit orders at a fixed price can propel price upwards. That is the key point of my ramblings.

Now if that break point also has a load of stop losses behind it to be executed as market buys then that's another matter.

I guess I might continue banging my head against a wall for ever. These questions are so hard to answer as so few people have experience of the low level mechanisms at play.
  • #596
  • Apr 12, 2010 7:18am Apr 12, 2010 7:18am
Quoting pipmutt
I'm not really into statistics but it would be interesting to see some analysis of taking every opportunity and paying for a few losers as opposed to being selective and only taking a few. Maybe the trade off would be to reduce risk on the less probable ones.
hmmmmm.....sorry pip i don't agree.

i think this sort of talking comes from fear of leaving money on the table. i am not interested in how many pips i make, i go for the best setups based on my judgement. i make the pips that are there for me to make, i leave the rest for other traders with other methods while waiting for another quality setup.

i am not trying to master the markets, i am just trying to make money. and if i want more money i increase my size. why should i lower my standards ?
The quality of your life is brought about by the quality of your thinking.
  • #597
  • Apr 12, 2010 7:27am Apr 12, 2010 7:27am
Too many order flow talking traders(not any live trades).

who is talking too much.i am sure u dont have enough time to trade.(you are busy teaching order flow).easy to teach.Trading is not easy.
if u can jump on me.(what i am doing here).i am bored .(need some orderflow pill.)
  • #598
  • Apr 12, 2010 7:28am Apr 12, 2010 7:28am
Quoting hornet
hmmmmm.....sorry pip i don't agree.

i think this sort of talking comes from fear of leaving money on the table. i am not interested in how many pips i make, i go for the best setups based on my judgement. i make the pips that are there for me to make, i leave the rest for other traders with other methods while waiting for another quality setup.

i am not trying to master the markets, i am just trying to make money. and if i want more money i increase my size. why should i lower my standards ?
It's ok to disagree, we're only tossing ideas around.

I wouldn't say it comes out of fear of leaving money on the table, I would say it comes out of seeing a reasonable opportunity and exploiting it instead of letting it pass by. If anything not taking opportunities suggest the trader is fearful, of losing.

Increasing trade size to make more money wouldn't really be a solution, all you'd be doing is increasing risk proportionately.
  • #599
  • Apr 12, 2010 7:36am Apr 12, 2010 7:36am
Quoting jolany
Too many order flow talking traders(not any live trades).

who is talking too much.i am sure u dont have enough time to trade.(you are busy teaching order flow).easy to teach.Trading is not easy.
if u can jump on me.(what i am doing here).i am bored .(need some orderflow pill.)

Not sure who you're referring to jolany? If it's me then don't worry...I trade 15 min and 30 min timeframes and have plenty of time between trades to discuss the things that interest me.

I've said before that the mechanisms at play behind the scenes are something I'd like to understand but I don't expect them to give me an edge. They may help me form a picture in my head of what is happening when a certain bar forms but nothing else.
  • #600
  • Apr 12, 2010 7:39am Apr 12, 2010 7:39am
Quoting jolany
Too many order flow talking traders(not any live trades).

who is talking too much.i am sure u dont have enough time to trade.(you are busy teaching order flow).easy to teach.Trading is not easy.
if u can jump on me.(what i am doing here).i am bored .(need some orderflow pill.)
no trades today.

nothing better to do. lots of time to trade but no setups for me. easy to teach becasue it's simple. trading should be easy, why make it difficult ?
why jump on you ? no interest
i am bored also, since i have no trades open i use my time to discuss cordially with other like minded people
The quality of your life is brought about by the quality of your thinking.
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