Ken's Continuing Successes with EO's system

A few questions ..

Who takes your trades when you place your order?

Do you move the market with your orders?


My thought process has shifted to a completely different idealogy , which may not be a safe haven for others , So while I try and unravel what i am thinking now , I am not sure I should continue this in a open forum. As with most of my ideas it never has fit 100% .

I would suggest everyone continue to strive to hold their trades and add on. Checkout The captians trade last week during a holiday week. 450 pips.

To say that is a risky way to trade is to not understand the ideas behind EO's style . We keep looking at all the different trades as entries when in reality most are areas to add to a trade in progress.

The ideas brought furth by that video . confirms that . the cycle which envelops those trades is the same. I went back to even posts I had on babypips and that cycle has been the same since I first started trading.

There was a thread on babypips once called the forex store. Very common sense idea . look for the over extended currencies to buy . get a discounted price. Like buyng anything in a store.

The questions above are a start to my new idealogy or thought process , I will give the basics at least to what i am thinking but without a good understanding of trading it will hurt newer traders . as they will not have the foundation to understand the levels. possiblly.

Hope everyone is having a great Holiday thus far. Ken

One of the ideas that has always rubbed me the wrong way is the thought that forex is gambling that for every order thiere is a winner and a loser. Just because someone ants to buy doesn't mean the seller is selling at a lose . it just means they are at a level that they WILL sell. maybe with a large gain.

Also there is money that is exchanged that has nothing to do with trading , It is whne someone NEEDS a different currency to settle a obligation. They may wait for a day or two for a better rate , But normally they just exchange the currency and they pay a spread or fee to do so.

So number one you have to believe this first . If not The rest you will not agree to at all.

A single thought to go along with the above idea.

Do you think big money, banks and the such would be involved in gambling ? They have risk managers to rein in hotshot traders . They have risk analysis to back up thier actions and inactions , Do you ?

Oh, shoot,! I don't think I ever told you that whilst in the pursuit of a grand and wonderful dream, should you all of a sudden round a bend and see before you an enormous uncharted mountain with towering cliffs, jagged rocks, and seemingly impenetrable walls, just consider it a sign that your dream is considerably more worthwhile than you had previously imagined, and that you are exactly where you're supposed to be.

Kudos -
The Universe

http://www.kidport.com/reflib/worldg.../Mountains.JPG


Don't waiver from your plan . we will get there .

have you ever heard the comment , Trade with Big Money ?

Or trade with the trend ?

What do those mean to you ?

How do you see big money or the trend?

Do you see trading as a battle do you need the rules of engagement ?

Are we On the wrong side of the battle ?

Have you ever seen a ECN brokers price sheet ?

It shows the offers from institutions that deal with that broker.

It will have a total dollar amount and the price they will accept for that amount. It is the reason that at times you can actually make money when entering with a eccn broker if price moves past the offer to quickly and it hasn't been filed yet.

Also why ECN brokers charge a commision along with spread.

But if we can see this does it not make sense that big players have access to better information as well.

Common sense has to kick in at some point. Life very rarely creates a even playing field.

I don't use a ECN broker or I would post one up.. Sorry . But I have seen guite a few of them .

That Video that everyone got to see last week,

I am not sure I believe in Market Makers. but it got me to thinking about how their orders get filled compared to ours. And also the common sense aprroach to where they could be filled the easyist.

Then looking back at the charts and applying common sense to that thought . Brought some points into view.

Even though we are always told to trade with the big boys. Do you even consider them when your planing your trades?

Or like most of us , are you just looking for that perfect candlestick pattern or setup of the same?

Then once in the trade do you think are we helping move the price in the direction that big money is or are we fighting that move and what is that move?

Are we being manipulated ?, to help these players to be able to get their orders filled. Can we use this information to our advantage ?

I don't hink we are being manipulated but I think THEY ( who the hell is THEY anyhow). know what we do so can see even if they don't have real information where we ould enter or place stops . Which is information important to them to get the best fill price they can.

Think of buildcity's Momentum candles / what if you knew they were fixing to happen. rasies a question doesn't it. I mean it would be great if their was some conspiracy we could unlock to trade with ease.

There maybe one even . But there is a group of traders that trade such large amounts that how we think wouldn't work for them.

What does it take to move price ? What does it take to make a 10 pip candle ?

So the tiny candles we see it goes to figure is US as a group buying and selling barelly making a move . But once a accumlation of positions has been built at a certian level, Then it is now possiblly a area of interest to a big trader that he can see as a entry for his volume .


The hard part is how far is willing to go to gather those positions and also is their suffecent pending Orders there as well to help him to move price in the direction he intends.

The main focus would be to get into the market then have the help of us little guys to move it the way they want . This way we are helping to buld theirs as well as our psotion size. We can then clearly see the pijnts where . Counter trend trades come in and trades are manged. Also where their is suffecent size to make it worth thier time to add on as well.

This is the thought process that is going on. the work now becomes in clarifying it into usable information .

Well big money and trend I can see with momentum(size and structure)each candel of that recently movement.

In my opinion I don't think I can move price .I can only paticipate of the move,thats all.Well and all orders and stops are build around S/R .Who created those S/R zones?Big players and their orders.
Only my view.

To support the thought that , there are big players out there. That could move the market if they wanted I did a bit of research about the distrubution of wealth globally.

We have all heard Of Soros billion dollar day .

So thinking he doubled his account that day . I searched for billionaires . there are 10015 billioniares worldwide. Out of 4 .4 billion adults.

10% of the adults control 85% of the wealth used to be 90%, To be in the top 10% you only have to have $500.000 in assets. Now that is a good point , To be in any of this list you don't have 1 billion in liquid assets ( cash) but property inventory cars planes worth that amount.

Most rich folks can find it just as hard to lay their hands on cash as the rest of us.

I then took a look at the proffesions of those 1015 billionaires only about 5% actualy list a connection to finance. Most own companies or stuff.

So maybe with a stretch 10% of the billionairs control over 75 % of that groups funds as well. It starts big and drops off pretty fast.

So it easy to see that a very few people indeed could use the market to thier benefit. Hell that is what we are all trying to do. But butting heads with them would not be a winning idea.

Not to say if you understand the way they are taking their trades you can't move along with them and against them but you have to SEE the moves and be pretty clear in your thinking.

The information about the wealth was out of a study by the U.N . in 2010.

The information of what they do is from Forbes.


interesting.

So to think we are the market, may be a bit naive. The EO ideas remain the same . Just additional information may give you insight to the why they work which is what we look for plus maybe a reason to add on and when to get out . The understanding of why this cycle has remained for so long and it's players is my goal.

Still trying to wrap my head around that trading manual. Great thread you've got here!

I haven't posted any charts lately so here's a GU long..

We've discussed this setup before a hundred times, so we all know what to do here. Get in, cover -- if it makes a run back down to 1.534X-5X we get stopped out and wait for re-entry, if it closes across the 5EMA on the 1H then we leave it running. If it consolidates, tough luck, next trade!

The 1H is attached but you can see the S/R levels better on the HTFs.. yesterday's daily bullish close across the 5EMA shows why you should be looking for the setup, and the monthly chart shows why it is very unlikely that we get a close below 1.534X-5X this month (remember, it's the 30th already).

If anyone took the GU trade you could use this area as TP1 depending on your MM -- we're at the 50/62/200 on the 1H and up 50-70 pips depending upon where you entered (15M or 1H). I definitely wouldn't consider closing more then 50% of the trade unless we get a close back across the 1H 5EMA. If you do take half off and we close across the 50/62/200 make sure you readd on the retest. 1.548X would be the next area to watch, then 1.553X, then the neckline.

I know you don't think we are being manipulated, but I do think we are. IMHO...

The market is deterministic....it is not random....."Someone" is pulling the strings...with our little trades we are not even a speck of dust in the realm of this "reality" created for the benefit of others..

Knowing there are people like the "employees" & "executives" of companies like Goldman Sachs and Deutsche bank....... leeches is a better definition of their role in life....

I once thought (in my early teens) there had to be someone checking to see if there were too many cars on the road, as I knew the number of miles paved was not enough to hold the sheer number of cars being sold every year.....I could not fathom the thought of car makers just pumping too many cars on the road, with out any regard to the capacity of the roads to sustain their numbers....little did I know that there was no one with this role....the car market was made by people who had no idea what they were doing, or cared about the outcom, sthe car companies were and are being run by people who only care about growing the business....to me growth for the sake of growth is unsustainable, in any aspect of life.....

Now I am in my early 50's, life has changed me......and I think there is no way this forex market runs without any control, without anyone actually pulling the strings to tease poor souls like us to enter it and be had.....

I would be so happy to be proven wrong, and be able to return to the way I was....and trust others......

PAPION

Papion

I dont know where and how you got that idea from. I can talk about this one because i have LONG enough experience of being the "leech" in your words.

If you will trust my words, What actually happens is this-

1. There is stop hunting in early Sydney, especially on Mondays. I have heard rumors that some rich "oil" kids trade over weekend and banks run to cover these trades at Sydney open creating sharp moves. But I dont really know how it works because i have never worked with those banks. What i know is I have seen it happening often. That's why i dont keep positions over weekend.

2. There are BIG orders. These create havoc especially in thin markets. But these BIG orders are rarely random. They are at good technical levels and if you analyse charts properly, these orders will help you rather than harm you.

3. There are option barriers. Suppose a big bank has sold large amount of call options for GU at 1.6. Now if price is just below 1.6 on expiry date then it makes sense for the bank to try and sell it to keep price below 1.6. Losses incurreed in selling GU will be more than offset by gains in option if it expires worthless. But then again they use SENSE. If they have to sell huge amounts and incur huge loss in this selling they wont even try it. AGAIN these levels are not random. If you read charts you will be watching 1.6 anyway.

NO can possibly "control" these markets. If you want an recent example open USDCHF chart. Even Swiss national bank couldn't keep up against technicians.!

Just a piece of advice- As a smaller fish you have enourmous advantage. You can get in and get out lightening fast. Big guys cant do that. You can take 30 pips. Big guys cant do that- their cost of trade is huge. Use this advantage and win. No big guy has any power over your account but Negativity will kill your account.

Hope that helps someone

Cheers and happy new year everyone

The obvious question that must be answered in order for the theory to hold water is this:

Why would they bother manipulating retail traders?

We make up such a small percentage of the market and trade in such diverse ways using so many different approaches, what would be the gain in trying to manipulate us? How could they manipulate us when there is no collective mindset with the hundreds of thousands of retail traders out there?

I find a lot of people confusing market makers with BIG guys. Here is a write up that will help. In forex market there are basically two types of participants. Market makers and traders (market takers)


1. Market maker is someone who gives a two-way price to his customer. Like our brokers who continuously quote two way prices to us. Say GU is quoted as 1.5980 and 1.5982. Broker is willing to buy GU at 1,5980 and sell GU at 1.5982. How do they make money? They hope that given large number of customers, someone will buy GU (at 1.5982) and someone will sell GU (at 1.5980) at same time. They simply hope to pocket the spread. Of course this depends on having large number of customers. Otherwise they will have a position opposite to clients. Suppose someone sells at 1.5980 but no one buys at 1.5982. So they have a long position now. They have several options in this case. A. They can hold the position if they believe GU will go up. – Very unlikely. Most of market makers have strict rules against taking views/holding positions. B they can hold the position for short time and hope someone buys from them in future. Note that even if price moves against them by spread to 1.5978 and 1.5980 they can still exit at cost if buyer comes and buys at 1.5980. C. However, in most of the cases they will simply go ahead and sell to “their” broker (most likely some bank). They will normally get narrow spread of say 1.59805 and 1.59815. So they still make 0.5 pip.

So spread is the fodder of market makers. Naturally. Larger customer base means more income for them. So a big guy simply means the one with most customers in market maker sense. They DONT take positions and DONT influence prices.


2. Trader is market taker. Like us he takes a position in market. HE buys/ sells from his market maker (Broker). Here only benefit one can have is a good view because we are paying the spread. So market must move in our favor by more than spread before we can hope to make any money. What does BIG guy means in this sense? Big guy is one who simply takes large position sizes. Does he have any advantage over retail traders? NO. In fact he has huge disadvantages because of large positions. Because of his large positions he will most likely have to pay higher spread than retailers. Sometimes his own selling will bring price down and he will have to sell successive lots a lower and lower price. He simply can’t sell at exact level like us. His cost of trading is huge. So he can’t play for small moves. He is forced to take fundamental or at least slightly long-term view. He can’t capture small moves. He can’t even reverse his position quickly. Often, reversals will mean huge spread loss even if market doesn’t move at all.

So get this right- only market makers have certain advantage. But they are not active players who influence prices.

BIG traders are those who drive markets and they are at huge disadvantage from us. Imagine paying 30-40 of pips in spread and trying to make money! No wonder very few “BIG” trading guys have survived this market for long. I don’t know any firm trading forex and making Consistent money. So don’t let anyone fool you with talk of big guys and disadvantages of retail traders. Don’t let negativity come in. Analyze your charts and trade.

EDIT: These big guys are basically hedge funds, trading desks of big banks etc. Sometimes they take positions in billions and hold it for years altogether. I Dont know of any big guy bothering about retailers 5-10 pips. And i PITY them instead of being AFRAID of them- Imagine against how much disadvantage these poor chaps are trading. Feel sorry for them.

If anyone is still not convinced, i just had a little chat with a BIG guy few days back. Minimum position they have ever taken- 250 Millions. View- Betting on short euro, short dollar, long commodities for next FIVE years. Are they interested in my 20-30 pip "scalping"? hell NO!

Great trade doc!
Nice post Survivor!

But most importantly

Have a fantastic new year all!

Im psyched to get started on 2011 and getting back to my normal trading, hope you all are as well!

Well this has taken a interetsing turn,, as usual much to much over thinking , but that is good for the brain , I guess.

I don't think we are manipulated in so many words. I disagree though that banks aren't maiking Lots of money from Forex. At the start of the ressecision when A lot more of thier bussiness practices became transparent or under more scrutiney.

Their was many articles regarding their paying of extreme bonuses. Their resounding reply was these traders make us so much money to not pay them this well would jeopardise the core of the banking industry.

I also understand about options and you can get a list of those and times they expire. Price will try to hold near those levels on those days.

But the core idea I am working on unraveling. is not manipulation , but expolation. Which isn't so much bad or evil but a measurable quality we can also take advantage of.

We have our brokers to trade with who have the job of matching our trades. They do this in different ways. I have seen my orders change in the past from the same broker . If you start being very profitable you may notice the same. I have seen mine go from a dealing desk to a pass through or direct ticket trade. Direct ticket meaning they pass the order straight to a bank , which relieves the broker of any risk . And yes they still make thier spread. For a ecn broker this the only way they process orders.

Now I have doubt of a group of people around the globe, Trading inconjunction with each other moving the market . But I also am not naive enough to think it isn't a possiblity. I was in the bussiness world long enough to know this one true fact,

The more at stake, the less risk of a unknown outcome is part of the equation.

We seem to agree on a small detail that is the way larger traders orders are filled. weither this is a disadvantage or not I am not sure. But The one point in that market makers video that struck a cord. Was the statement they look for accumalation of positons . to decide on the direction or move, That making total sense as they need the opposite side of a transaction as we do.

I also belive price can move a good deal in either direction without much regard to current finacial climate. Ranging markets.

My focus into the new year is to try and see where the Big traders would have the best chance of getting his order filled and why. I have noticed the same move over the last week that supports some of the ideas expressed in that video. but the why's may or may not be the reasoning.

I taking a more realistic view think they HAVE to trade a certain way to be able too. But our herd instinct and mentality is a exploitable factor for them, and can be for us as well.

This is what I will look for, where I see the highest probablity of accumalation during a stagnent market ( consolidation ) and if I was trying to place a big order safely how would I go about it.

In other words just try and include the larger player in my thought process, not so much a total shift of strategy but a bit of understanding what they have to do as well.

They effect what we see on our charts way more than we do. The big candles are their orders being processed, I really want to SEE what they do, BEFORE those big candles happen .

Just more fuel for the fire.