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  • #681
  • Apr 13, 2010 12:03pm Apr 13, 2010 12:03pm
Quoting Scotty B
Yes the spot market volume dwarfs fx futures, but are you implying that futures data is not useful?
No.

What I would say from experience in both, is that using one to reference the other had no bearing for me.

The guys on our futures side looked at their data while the cash traders looked at cash data.

When volume was applied, it was done so only in the futures market since the cash market leaves you guessing (and with the daily transaction volume in cash, it's not really necessary to worry about liquidity).

Edges in the spot market weren't derived from volume.

regards
daytrading
Enter Signature
  • #682
  • Apr 13, 2010 12:05pm Apr 13, 2010 12:05pm
Quoting pipmutt
Is there any data about how much of that 3.9 trillion is commercial and how much is purely speculative?
No, because its not going through a centralized exchange.

The BIS in Switzerland keeps records of estimates regarding the volume of different currencies ($/€/Y etc.) - but that is it.

regards
daytrading
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  • #683
  • Apr 13, 2010 12:08pm Apr 13, 2010 12:08pm
I'm sorry for the people that think the volume on FX futures isn't useful, they loose the big tool ever.....

Lubo.
If I know how, I tell You!! Few but Good!!
  • #684
  • Apr 13, 2010 12:11pm Apr 13, 2010 12:11pm
Quoting pipmutt
Is there any data about how much of that 3.9 trillion is commercial and how much is purely speculative?

I know, but i can tell you otherwise I must kill you!!!

Lubo.
If I know how, I tell You!! Few but Good!!
  • #685
  • Apr 13, 2010 12:11pm Apr 13, 2010 12:11pm
Quoting daytrading
No.

What I would say from experience in both, is that using one to reference the other had no bearing for me.
Thanks man,

Ironically, I've found the opposite to be true. The two markets walk in tandem with each other anyways. If there is a signal on one, there's no reason you couldn't place a trade in the other, with the exception that liquidity is better in cash if you are trading with size. The ideal situation (for me) is to take the futures signal to the spot market. Altough I'm a small guy so I can stick it out in futures for a long time without worrying about liquidity issues.
  • #686
  • Apr 13, 2010 12:16pm Apr 13, 2010 12:16pm
Quoting pipmutt
Where/how are you seeing it? Sell, or Buy?
Don't know what FZEX would mean but on my EU future data there's no orders under .355, u see the price is going up from that price.

Lubo.
If I know how, I tell You!! Few but Good!!
  • #687
  • Apr 13, 2010 12:18pm Apr 13, 2010 12:18pm
Quoting daytrading
No, because its not going through a centralized exchange.

The BIS in Switzerland keeps records of estimates regarding the volume of different currencies ($/€/Y etc.) - but that is it.

regards
daytrading
According to everything I've read, much of the volume is due to orders being passed around to different dealers as a way of feeling the market out as it were. I think there is a research paper in this thread that says a reletively small initial order coming into the spot market will be passed around so many times that the volume it causes is huge. The spot market operates this way precisely because it's so opaque/nontransparent.

Many of those papers have predicted that daily volume will decrease in the next few years as the market becomes more transparent. We'll see about that.
  • #688
  • Apr 13, 2010 12:22pm Apr 13, 2010 12:22pm
Quoting Scotty B
Thanks man,

Ironically, I've found the opposite to be true. The two markets walk in tandem with each other anyways. If there is a signal on one, there's no reason you couldn't place a trade in the other, with the exception that liquidity is better in cash if you are trading with size. The ideal situation (for me) is to take the futures signal to the spot market. Altough I'm a small guy so I can stick it out in futures for a long time without worrying about liquidity issues.
Bear in mind the following:

although you might perceive that one follows the other, the cash market never really follows the futures. The reason being that a heavy load of cash transactions happen for reasons other than speculation and are therefore not linked to possible trades based on volume patterns in the futures market.

See the futures market as a dog on an elastic leash and the dog-walker as the cash market. The cash market decides where the price ultimately moves - the futures either anticipate (being ahead) or catch up (being behind).

regards
daytrading
Enter Signature
  • #689
  • Apr 13, 2010 12:29pm Apr 13, 2010 12:29pm
Quoting daytrading
Bear in mind the following:

although you might perceive that one follows the other, the cash market never really follows the futures....
I'll concede your point, but I've seen a lot of people being dragged along behind their poodles. Granted, the poodle is choking itself, but it's pulling as hard as it can. Because the two market's are nearly 100% correlated, price discrepancies only create arb opportunities. Even if they are small ones, free cash is free cash. Their is a strong incentive for them to stay close together.
  • #690
  • Apr 13, 2010 12:31pm Apr 13, 2010 12:31pm
Quoting Scotty B
I'll concede your point, but I've seen a lot of people being dragged along behind their poodles. Granted, the poodle is choking itself, but it's pulling as hard as it can. Because the two market's are nearly 100% correlated, price discrepancies only create arb opportunities. Even if they are small ones, free cash is free cash. Their is a strong incentive for them to stay close together.
True.
Enter Signature
  • #691
  • Apr 13, 2010 1:45pm Apr 13, 2010 1:45pm
Quoting FXEZ
Btw, I'm seeing massive potential order flow building below 1.355 on EU - looks like it's just a matter of time before the volatility party starts.
I agree directionally waiting for it as well..
  • #692
  • Apr 13, 2010 2:19pm Apr 13, 2010 2:19pm
Quoting Scotty B
One thing that orderflow can do is give you great entries, but exits are often difficult to project.
It's a good question. I'm not sure if it has been addressed yet.

So far the scenario (from what I can see) is:

Look for Orderflow Imbalances* around the normal suspects (Evens, S/R).

If found then, prepare for and trade the ensuing Volatility in the direction of the imbalance.

Then what to offset?

I'll guess that the process repeats to decide whether or not to hold positions? Or just MM, time limitations, Evens and S/R etc. to offset?

*not possible for me, right now, I guess. I'll have to continue to trade with a lag - at the bottom of the food chain as volatility starts up.

(Sorry if my post is completely ignorant - still getting my brain up to the level of the thread. LOL!)

The thread continues to get better. Thanks again, folks!
  • #693
  • Apr 13, 2010 2:20pm Apr 13, 2010 2:20pm
Quoting FXEZ
I'm seeing massive potential order flow building below 1.355 on EU
Quoting domino
I agree directionally waiting for it as well..

Well I have absolutely no idea what either of you guys are talking about
  • #694
  • Apr 13, 2010 2:51pm Apr 13, 2010 2:51pm
Quoting pipmutt
Well I have absolutely no idea what either of you guys are talking about
when price drifts into a triangle or a wedge what is it doing?

price is being bid up slowly in low volume near resistance... when high volume moves into the market areas of low volume at resistance should be rejected.. look at the orderflow build up on the attached chart slow drift up vrs fast drop.. unless intervention or new odd are price will fall through area with largest orderflow.. If it takes 9 buy bars to break the high of 1 sell bar the orderflow is generally down.. in this case long term trend is down we are at resistance on low volume the high volume should move into the market to reject and price will move through the path of least resistance or with the orderflow which is built up underneath.. with 3550 being low volume rejection for the sellside.
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  • #695
  • Apr 13, 2010 4:08pm Apr 13, 2010 4:08pm
if you guys have been following this trade.. http://www.forexfactory.com/showpost...&postcount=468

the RZ short
stops are now 62974 @ 1:1.25 RR
  • #696
  • Apr 13, 2010 4:12pm Apr 13, 2010 4:12pm
Quoting domino
how about this one?

E/G

SZ9L

This one we can stay in the this as long as price doesnt fill the gap stop at entrance to gap fill.. 88033 puts us into slight profits.
  • #697
  • Apr 13, 2010 4:16pm Apr 13, 2010 4:16pm
Just thinking out loud. If anyone wants to make some comments on how to trade order flow with this setup, please do.
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  • #698
  • Apr 13, 2010 4:18pm Apr 13, 2010 4:18pm
Quoting FXSurfer
Then what to offset?

I'll guess that the process repeats to decide whether or not to hold positions? Or just MM, time limitations, Evens and S/R etc. to offset?
We trade as long as the volatility is there or if the period of low volatility constrains price movement with stops inprofit to the break of the constraint... we further go signals as long as volatility continues..

Quote
*not possible for me, right now, I guess. I'll have to continue to trade with a lag - at the bottom of the food chain as volatility starts up.

(Sorry if my post is completely ignorant - still getting my brain up to the level of the thread. LOL!)

The thread continues to get better. Thanks again, folks!

the volatility created from the points should continue until it doesnt lol seems stupid statement but if it to continue.. bars needs to be increasing in width then will drift tighter build short order flow then will put in a sequence of LH/LL waves signal exit regardless of area or what its against.
  • #699
  • Edited 4:21pm Apr 13, 2010 4:20pm | Edited 4:21pm
All i see is a reasonable opportunity to buy at around 570 and 587 with an exit target at 614 and caution at 3600, (yes i admit it is hindsight).
As far as liquidity on futures goes, for all intended purpose of most traders around here, on majors only, there's more than enough.
Ten contracts fill almost instantly on European and US times, and it may well be that someone is using futures volume successfully, though i don't expect them to make a statement like that on a public forum.
Biggest joker
  • #700
  • Apr 13, 2010 4:27pm Apr 13, 2010 4:27pm
Quoting sir6
Just thinking out loud. If anyone wants to make some comments on how to trade order flow with this setup, please do.
This is gonna be one hell of a spot IMHO.. your on the bull side of this line I wouldnt short yet.. but if u did.. 9985 is a good point.. with a 100 point stop.. would be a longer trade until then id trade the long side of the triangle with tight stops.

I think its best to take the longer term trade on this or stay to the side honestly.

if this breaks im gonna be pissed tho.. cause that means more canadians will probably be visiting and using the exchange rates to go on vacations and view america..
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