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Domino's Price and order flow trading

  • #1,101
  • Oct 6, 2010 6:01pm Oct 6, 2010 6:01pm
Awesome, thanks for the reply once again!
Do you ever enter late into the trend? Or do you prefer to find the absolute area of accumulation/distribution before the train leaves?
  • #1,102
  • Oct 6, 2010 11:02pm Oct 6, 2010 11:02pm
Quoting domino
check out my comments in the AUD/CAD room for more examples... this is still holding..

here http://www.forexfactory.com/showpost...1&postcount=11
here
http://www.forexfactory.com/showpost...0&postcount=13
here
http://www.forexfactory.com/showpost...8&postcount=15
here
http://www.forexfactory.com/showpost...9&postcount=21
here
http://www.forexfactory.com/showpost...6&postcount=26


for my comments and charts.. youll see I do use more than...
Domino, that was a great insight series of posts though it raises some more questions for me.

I put all the lines mentioned in your second link....the fundamentals have changed/reconsider position (red line) is around 8800 which was hit in May and June.
I would love to know what all factors you considered when holding on to trade. Or did you exit and re-enter ?

Also, did you add when the prices hit the white dotted lines ? Or was it that cause the price moved too fast downwards you dint add to the trades??

Edit: I have more questions but need to rush to office....been getting there late by an 1 hr everyday, hope they don't kick me out
  • #1,103
  • Oct 7, 2010 9:35am Oct 7, 2010 9:35am
Quoting Benevolent
Awesome, thanks for the reply once again!
Do you ever enter late into the trend? Or do you prefer to find the absolute area of accumulation/distribution before the train leaves?
Ill start buying late into a trend but im careful about how I arrange orders
  • #1,104
  • Oct 7, 2010 9:47am Oct 7, 2010 9:47am
Quoting vicky_ag
Domino, that was a great insight series of posts though it raises some more questions for me.

I put all the lines mentioned in your second link....the fundamentals have changed/reconsider position (red line) is around 8800 which was hit in May and June.
I would love to know what all factors you considered when holding on to trade. Or did you exit and re-enter ?
was just diverging more... everything was the same just more risk aversion...
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Also, did you add when the prices hit the white dotted lines ? Or was it that cause the price moved too fast downwards you dint add to the trades??
you buy as they move up through the lines.. from underneathe based on PA.
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Edit: I have more questions but need to rush to office....been getting there late by an 1 hr everyday, hope they don't kick me out
hope that answers some of them.. dont get kicked out lol.
  • #1,105
  • Edited 12:05pm Oct 7, 2010 10:56am | Edited 12:05pm
Quoting domino
was just diverging more... everything was the same just more risk aversion...
Ok so the reason for AUD strength/CAD weakness ie - IRD was still on so you still stuck to your gun?

But then you have underlined it as the reconsider trade line, so no reconsideration done?

What factors would have led you to actually shut down the trade ?

Quote
you buy as they move up through the lines.. from underneathe based on PA.
Underneath? Ok, I can work with that. But say, the price breaks below and then comes back up to make a high. Now, we cant say it is LH , or the HH until after the fact....in that case it can be a missed trade or enter even if there is a possibility of a losing trade?


Quote
hope that answers some of them.. dont get kicked out lol.
Yep, working on not getting kicked out...fundamentally, psychologically lol
  • #1,106
  • Edited 1:37pm Oct 7, 2010 12:04pm | Edited 1:37pm
Quoting domino
carry trades work but... you need to use TA you just cant blindly enter into a carry trade without knowing where we are in the cycle of things.. you cant just exit whenever you fell like it to... interest rates is really all you need mixed with some basic TA and common sense...
Cycle of things...that's something I hear about a lot....Interest rate cycles.... This might be a very basic question but what exactly is a interest rate cycle? How to go about analyzing / understanding it?

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What drives the Pairs with divergent interest rates is the fischer effect.. like a stock with a dividend like riocan for example...

the other pairs is driven by growth and value mainly.. like a stock without a dividend or extremely small dividend like walmart.. or appl.. or alcoa...

but just because there is value in a tight dividend or interest vehicle/car/unit/share doesnt mean it will track... there is TA to sync with after a divergence is made...

When I said figure out why riocan is good and youll know what your looking for is because...
Riocan looks like your all time fav pick just saying.

So, what you are saying is though dividends work in stock markets...not all picks might turn out to be great ..we need to make sure to pick them with some latitude of price movement left and TA in sync.

TA sync being the most imp. but what is TA was out of sync? and buy, continue to buy, continue to buy and hold ??
  • #1,107
  • Oct 7, 2010 2:12pm Oct 7, 2010 2:12pm
long time no speak...

but this is probably the best trade here on FF.

surely because it resonates with me and my way of trading but, nevertheless, great stuff.

some of my recent trades.
nice breaks for turnaround, follow through and TTE entry getting triggered on next bar but you guys should know why i took them.
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The quality of your life is brought about by the quality of your thinking.
  • #1,108
  • Oct 8, 2010 12:40am Oct 8, 2010 12:40am
Quoting vicky_ag
Cycle of things...that's something I hear about a lot....Interest rate cycles.... This might be a very basic question but what exactly is a interest rate cycle? How to go about analyzing / understanding it?
the interest rate cycle is the idea that interest rate raises and cuts are cyclical and in sync with the business cycle.. for example as we move into a recession cuts take place to spur growth and pull out of the recession.. then there is downward cycling and upward cycling.. a set of rates that are cycling in a downward movement shows slowing growth and longer harder recessions overtime. upward cycling or cycling that is even shows more growth faster healthier..
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Riocan looks like your all time fav pick just saying.
maybe not my fav pick but deff fav for examples.. because its great company.
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So, what you are saying is though dividends work in stock markets...not all picks might turn out to be great ..we need to make sure to pick them with some latitude of price movement left and TA in sync.
yeah pick good companies then trade when ta is in sync.
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TA sync being the most imp. but what is TA was out of sync? and buy, continue to buy, continue to buy and hold ??
ta out of sync is left alone.. the company may be perfect.. but if the stock is selling off and trending low.. its not a buy.. its creating a opportunity.. when the intial break occurs back in sync with the fundies.. buy.. then it will wave.. and break again you buy again.. as trend continues...
  • #1,109
  • Oct 8, 2010 12:41am Oct 8, 2010 12:41am
Quoting hornet
long time no speak...

but this is probably the best trade here on FF.

surely because it resonates with me and my way of trading but, nevertheless, great stuff.

some of my recent trades.
nice breaks for turnaround, follow through and TTE entry getting triggered on next bar but you guys should know why i took them.
good to see you back..

nice trades.
  • #1,110
  • Oct 8, 2010 12:43am Oct 8, 2010 12:43am
there is an example of a death roll building on gbp/aud 4 hour chart ill try to post a pick
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  • #1,111
  • Oct 8, 2010 8:23am Oct 8, 2010 8:23am
Hey Domino,

just wanted to say "thank you" for your continuous contribution here - I found it a bit shocking how close your method is to my personal style of trading, LOL.
Even the part with your last trade - I am positioned in a very similar manner in gbp/aud

Just out of curiosity - how do you define your exits in the IRD-based trades?

Keep up the great work, domino, your thread is a rare gem of common sense in this forum.

Best regards
S
  • #1,112
  • Oct 8, 2010 8:41am Oct 8, 2010 8:41am
Quoting domino
there is an example of a death roll building on gbp/aud 4 hour chart ill try to post a pick
Domino not to be nit picky but I think we had a pending chart for the original break of GBP/AUD:

http://www.forexfactory.com/showpost...postcount=1067

BTW, I think you missed this post:

http://www.forexfactory.com/showpost...postcount=1105
  • #1,113
  • Oct 9, 2010 12:21am Oct 9, 2010 12:21am
AJ 4 Hour.
Playing at good swapped SZ. In sync with IRD.
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  • #1,114
  • Oct 9, 2010 9:15am Oct 9, 2010 9:15am
Quoting domino
yeah ill post it when i get home
.

gapped order flow is good if its against your position.. and bad if its with you your position. gbp aud was a B because it had already eaten some orderflow clusters.
here is the higher entry gbp aud...
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  • #1,115
  • Oct 9, 2010 10:11am Oct 9, 2010 10:11am
Quoting domino
here is the higher entry gbp aud...
Thanks, so it was a B and death roll break. Hoping to be able to trade like you someday.
  • #1,116
  • Oct 9, 2010 10:26am Oct 9, 2010 10:26am
Domino, more questions here: (please stop me if i am being a pain)

1. What is a yield curve divergence ?

Googled the term, nothing came up. Is that the potential of the impending trade not realized and prices are tanking? Say for example: AUD/CAD the IRD between the two doesn't warrant much of CAD strength but the more it strengthens the more the yield curve divergence?

2. From this post here again:

http://www.forexfactory.com/showpost...8&postcount=15

Your method goes like this:

a. Fundamental factor - IRD / yield curve divergence
b. Psychological factor - What all are you looking at ? Risk aversion ?
c. Technical factor - Trend , S/R, stop clusters, PA

I have tried to think of ways how you have arranged the chart as in:

How did you decide the white dashed by buying? Is it cause they are major S/R ?
Why did you think the red X was a buy zone? Was it because of the downtrend nature of prices when in that zone? I mean for the whole of the trend price have moved along nicely towards AUD strength only for that part when CAD for sometime seemed stronger.

And finally, even though the red line ie rethink trade line was breached in May/June why wasnt the trade closed?
  • #1,117
  • Oct 9, 2010 2:45pm Oct 9, 2010 2:45pm

Quoting vicky_ag
Ok so the reason for AUD strength/CAD weakness ie - IRD was still on so you still stuck to your gun?

I see trends a bit different than most.. see both charts below this post.. notice as IRD converges and diverges look at how price trends and responds.. look how price is trapped by steady rates.. notice how raises lead to raises until it plateaus and price shrinks as it converges until it plateaus .. price cycling and risk aversion and risk app.. cycling with the rates.. when the pairs dropped to 8800 so funds stayed the same we were dropping into psych zones with divergences being created.. white zone potential buy zones but not ness. a buy we are watching the price action in the zones.. so this never had a buy till 89... if that makes sense.. price didnt sync until the red.. and the red was the end of the psych wave break zone.. generally if the break doesnt occur around the red there is probably a fundamental change like when the EURO broke this zone at 40... when it was dropping.. So until the red we have .. Fundamentals.. Psychological demand zone.. built order flow.. and the break long at 89.. target eying Parity on the pair + the interest rate payments buying down on risk.. and the risk cycle in sync with the long. hope i explained that well.
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But then you have underlined it as the reconsider trade line, so no reconsideration done?
its reconsider a buy re look at fundamentals line... best example of this is the EURO.. when the EURO dropped under 40... this psych zone was broken and breaking the psych zone without a buy being triggered is a big NO sign re-evaluate the EURO and im not gonna lie I was bullish on the euro around that time.. I didnt have a trade active but i was looking to buy into that drop... but I saw the EURO bust through that zone with force.. and I had to take another look.. and then I believe around 34 we went short to 1.21 youll have to look back in this thread.. I know it was posted. and exit was posted in not gonna find it tho... but this zone on the AUDCAD was Demand building up all fundies in sync.. through the buy zones.. and then the tech syncing.. with a target over parity... psych stuff is generally stuff I save for my firm tho I dont plan on getting into it or how its calc here.
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What factors would have led you to actually shut down the trade ?
there is no trade open yet price has to move up through these zones.. there are buy zones we dont buy as its dropping thats my biggest thing..
if you look at this thread youll see how I see two different types of support too
here
http://www.forexfactory.com/showpost...0&postcount=10
here
http://www.forexfactory.com/showpost...5&postcount=12
here
http://www.forexfactory.com/showpost...2&postcount=17

in post 17 im just talking about how they are built.. the psych zones and how the demand builds inside the zone.. big banks with the IRD fade through these zones like how the orders are setup.. in the pic.. there is a book... ill have to look up the name that talks about this.. it was written by the guy who bankrupted that hedge fund on the Russian currency crisis buying blocks through these zones.. he refused to change his direction and acknowledge the change in fundies at a certain area opposite the demand zone... ill find the name for you I dont remember it off the top my head..
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Underneath? Ok, I can work with that. But say, the price breaks below and then comes back up to make a high. Now, we cant say it is LH , or the HH until after the fact....in that case it can be a missed trade or enter even if there is a possibility of a losing trade?
price drops unto these zones... for example falls into this audcad trade its an inside capitulation outside accumulation style psychological trade.. once in the zone we watch the support zones and make the buys on the break.. and sync with fundies.. these are usually very powerful and lead to outside wave patterns and V shaped reversals. we buy on breaks always.. nothing is hindsight traded.

Quote
Yep, working on not getting kicked out...fundamentally, psychologically lol

hope all this sits well.. if I didnt explain well or there is questions just rephrase and ask again its not being a pain...
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  • #1,118
  • Oct 9, 2010 2:48pm Oct 9, 2010 2:48pm
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  • #1,119
  • Oct 9, 2010 4:40pm Oct 9, 2010 4:40pm
Quoting vicky_ag
Domino, more questions here: (please stop me if i am being a pain)

1. What is a yield curve divergence ?

Googled the term, nothing came up. Is that the potential of the impending trade not realized and prices are tanking? Say for example: AUD/CAD the IRD between the two doesn't warrant much of CAD strength but the more it strengthens the more the yield curve divergence?
Ive attached a great PDF about Yield curve divergence.

Quote
2. From this post here again:

http://www.forexfactory.com/showpost...8&postcount=15

Your method goes like this:

a. Fundamental factor - IRD / yield curve divergence
b. Psychological factor - What all are you looking at ? Risk aversion ?
c. Technical factor - Trend , S/R, stop clusters, PA

psych zones if you look at the picture I posted about the formations... thats as far as I go as describing them.. i gotta keep some secrets dude.
Quote
I have tried to think of ways how you have arranged the chart as in:

How did you decide the white dashed by buying? Is it cause they are major S/R ?
Why did you think the red X was a buy zone? Was it because of the downtrend nature of prices when in that zone? I mean for the whole of the trend price have moved along nicely towards AUD strength only for that part when CAD for sometime seemed stronger.
the calculations and everything is proprietary ..
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And finally, even though the red line ie rethink trade line was breached in May/June why wasnt the trade closed?
nothing is open until 8900.. I have formation and entry statistics that are proprietary but just cause its at the red doesnt mean I hold a position I just have a buyside mentality through that zone.. price has to move upward through the zone and breakout to be a legit buy... with fundies the same and the breakout at 8900 the aussy became a buy and turns into outside wave formation in the psych zone.. the outside wave formation is rebroken and there is a new buy at 9200 stops are moved up and price continues to trend are chased at lows..
Attached File(s)
File Type: pdf ci2-7.pdf   103 KB | 680 downloads
  • #1,120
  • Oct 9, 2010 4:57pm Oct 9, 2010 4:57pm
Quoting Setebos
Hey Domino,

just wanted to say "thank you" for your continuous contribution here - I found it a bit shocking how close your method is to my personal style of trading, LOL.
Even the part with your last trade - I am positioned in a very similar manner in gbp/aud
thats setebos.. good to see a vet in here im interested to here about your trades cause our thoughts are in line.. so I hope to here more from you.

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Just out of curiosity - how do you define your exits in the IRD-based trades?
Ill chase IRD forever if I can.. so basically at longer term breaks against the IRD ill exit and move to "cash" and wait for these to desync from fundamentals again... dragging stops behind lows with trend allows me to retain that 1 risk but drag the reward of the trade into many multiple of risk but "long tail distribution" style if you know what I mean.. and dragging stops up even when they are not into profit and letting the income stream eat up the risk protects me from what little losses I take..

realistically if you could apply the idea of trading with the income stream like this on randomized data you would even create profit in randomness.. because of the way you skew the distribution. some trades ill have reward of 1:.5 or 1 risk to .5 return .. some trades ill have R:R of 1:3 and ive had some 1:150 (+)

shortened answer: I drag stops behind wave lows forever until triggered in direction of IRD. EDIT: sometimes tho i have to take a profit.. because of stupid financial laws.. or try to offset something else because of taxes but thats not important for the thread lol.

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Keep up the great work, domino, your thread is a rare gem of common sense in this forum.

Best regards
S

thanks setebos
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