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Question on how price moves

  • #41
  • Edited Aug 16, 2010 12:17am Aug 15, 2010 11:54pm | Edited Aug 16, 2010 12:17am
Quoting TradeRunner

In the end YOU EITHER HAVE A BUY /
SELL SIGNAL or you don't.

Nothing else matters.
And may I ask how you arrive at these signals?
Time hides Nothing
  • #42
  • Aug 16, 2010 12:09am Aug 16, 2010 12:09am
Quoting TradeRunner
This entire thread is, shall we say, BIZARRE !!
If it wasn't before, it is now. I guess you're right though in a way. If the multinational corporations were not operating through their Vietcong tunneling systems that were put in place after the Tet offensive, my RSI might not work as good as it does now. I like the way the multinational corporations make my moving average work, well, they control the 100EMA. The banks control all the other MA's and the bucketshops keep taking out my stops. Everytime a multinational spends a dollar, the price goes up, everytime they make a dollar the MACD is adjusted. It's all really complicated.
  • #43
  • Aug 16, 2010 12:24am Aug 16, 2010 12:24am
Quoting CindyXXXX
And may I ask how you arrive at these signals?
Every person must find their own methodology for trading. Mine would likely not suit you, yours would not likely suit me even if both could be proven to be profitable. It's why some people drive Fords and others drive Chevy's.

But back to currencies, it is impossible to know everything that is going to move the markets. What happened today will NEVER be repeated exactly for there are never the exact same number of market participants or the exact same circumstances.

Therefore, you can only trade your method and trust the method that you trade because one simply cannot have total knowledge of what is going to happen next. I hope this makes some sort of sense.
  • #44
  • Aug 16, 2010 12:29am Aug 16, 2010 12:29am
Quoting Scotty B
If it wasn't before, it is now. I guess you're right though in a way. If the multinational corporations were not operating through their Vietcong tunneling systems that were put in place after the Tet offensive, my RSI might not work as good as it does now. I like the way the multinational corporations make my moving average work, well, they control the 100EMA. The banks control all the other MA's and the bucketshops keep taking out my stops. Everytime a multinational spends a dollar, the price goes up, everytime they make a dollar the MACD is adjusted....
  • #45
  • Aug 16, 2010 6:04am Aug 16, 2010 6:04am
Quoting Scotty B
Think about the new meaning the phrase "buy low sell high" takes on with this new perspective.
Low would pretty much be wherever you buy and you would create your own high to sell at, right?
However you say: "They put your trade volume on the bid at the raised prices and you sell your inventory back at a profit". This would work if they didn't raise price immediately so you could buy a certain amount (say 30% of your total position) at a low price, then the rest of the 70% of buying is moving price up, then you sell and again they don't move price down immediately so you get to sell 30% at a high price and the other 70% pushes price down, canceling out the 70% that you bought on the way up, and you profit on the 30% you bought low and sold high. But if they think you're informed (because you're a financial institution and trading in size) wouldn't they move price immediately? Then you would actually have to look for liquidity (or pending liquidity consumers) to dump into.

I'm still not sure where mispricing comes into this. The supposedly informed trader buys big, causing dealers to raise price... however the trader wasn't informed and only bought in order to move price, then he dumps his position on following buyers and exits with a profit. If the dealers knew he wasn't informed then they wouldn't have moved price and maybe just sold at a high spread (as per Osler's version of informed vs uninformed spreads) in order to make up for the likely rise in price due to subsequent inventory rebalancing (dealer buying on interbank)? And since price rose but doesn't reflect any new information (since the buyer wasn't informed), that would be mispricing?
  • #46
  • Aug 16, 2010 7:50am Aug 16, 2010 7:50am
In all these conspiracy topics the participants are making 2 mistakes.

1. They suppose that there's a very limited number of smart players out there speculating and everyone waits for the other to finish his game.

2. They don't understand that, in order for a smart player to win big, another one must lose big.

As there are a lot of smart players and none of them wants to lose, I don't see how they wouldn't speculate any tendency to manipulate the orderflow.
  • #47
  • Edited 11:29am Aug 16, 2010 9:33am | Edited 11:29am
Quoting Sauron
In all these conspiracy topics the participants are making 2 mistakes.

1. They suppose that there's a very limited number of smart players out there speculating and everyone waits for the other to finish his game.

2. They don't understand that, in order for a smart player to win big, another one must lose big.

As there are a lot of smart players and none of them wants to lose, I don't see how they wouldn't speculate any tendency to manipulate the orderflow.
Hardly a conspiracy thread I think. Anyway please keep it on topic.

1. No, I think we're just making simple examples. You have to understand the core ideas before you can build and add all the other stuff on it, imo. (As in, the simplistic scenario might not be realistic because there are other things happening at the same time - but you have to understand the basic scenario before you can make good sense of the other things affecting it.)
2. And yet, the market moves up and down, and people are making and losing money. Who's losing? Could be a "smart player", could be utilitarian traders, could be the dealer. So...?

I don't quite understand the last sentence.

:edit:

ok I read another post of yours elsewhere and I think you were saying the same thing as your last sentence here, basically that if someone was manipulating price like that (i.e. buying and dumping) it would be an inefficiency and other players would jump on it. Fair point, but price does go up and down like that every day. Why aren't they thinking it's an inefficiency every time it goes 10 pips up or down? How is it that they know the motives behind every move and can tell what the motives are behind some anonymous buying and whether they have information or not?
  • #48
  • Aug 16, 2010 2:01pm Aug 16, 2010 2:01pm
Quoting eurotrash
Why aren't they thinking it's an inefficiency every time it goes 10 pips up or down?
Why do you think that more often than not, after 10 pips up it goes 10 pips down?

Always be fading like they say.
  • #49
  • Edited Aug 17, 2010 5:16am Aug 16, 2010 3:00pm | Edited Aug 17, 2010 5:16am
Quoting Adal
Why do you think that more often than not, after 10 pips up it goes 10 pips down?

Always be fading like they say.
Couldn't a lot of that be accounted for by longs taking profit?
  • #50
  • Last Post: Edited 4:12pm Aug 16, 2010 3:37pm | Edited 4:12pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
Quoting Sauron
In all these conspiracy topics the participants are making 2 mistakes.
Ah yes, the great conspiracy of market orders, limit orders and their effects on liquidity. :tinfoilhat:

Quoting sauron
1. They suppose that there's a very limited number of smart players out there speculating and everyone waits for the other to finish his game.
Perhaps you'd solve a puzzle by smashing all the pieces on top of each other until they fit together. I'm gonna go at it one at a time though..

Quoting sauron
2. They don't understand that, in order for a smart player to win big, another one must lose big.
Are you suggesting forex is a zero-sum game?? You're a scholar and a saint. I can't believe you're divulging this info to the public!

(also your technically wrong- The "loser" that sold me my position took profit when i went into drawdown and the "loser" that bought my position back exited his trade for a profit later as well . yayyy markets!)

Quoting sauron
As there are a lot of smart players and none of them wants to lose, I don't see how they wouldn't speculate any tendency to manipulate the orderflow.
Why don't you piece together your first point with this little gem to find your answer.

edit:forgot my tinfoil hat
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