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Order Flow - Finding cluster of stops on chart

  • #21
  • Jan 6, 2011 3:05am Jan 6, 2011 3:05am
How were you able to conclude that the digital option holder has to keep it below 1.3125? How can you determine the put/call nature of the option?
  • #22
  • Jan 6, 2011 3:07am Jan 6, 2011 3:07am
Quoting xXTrizzleXx
How were you able to conclude that the digital option holder has to keep it below 1.3125? How can you determine the put/call nature of the option?
As someone already stated (you i believe).. news feeds, like IFR, give you the rumors and info.
  • #23
  • Jan 6, 2011 4:23am Jan 6, 2011 4:23am
Quoting Monroe
As someone already stated (you i believe).. news feeds, like IFR, give you the rumors and info.
Sorry for the ambiguity; I meant why below as opposed to above? I don't recall the nature of the order being stated. Perhaps I am just sleepy

Regards,
xXTrizzleXx
  • #24
  • Jan 6, 2011 4:49am Jan 6, 2011 4:49am
Guys, you can SEE the stops on Oanda: http://fxtrade.oanda.com/analysis/hi...al-open-orders

Look at this video that I've made (click to go to YouTube and view full-screen in 720p). You can see some BEAUTIFUL stop hunts going on (the price attacks the thick red/green line which are clustered orders):

Inserted Video
  • #25
  • Jan 6, 2011 10:18am Jan 6, 2011 10:18am
Quoting xXTrizzleXx
Sorry for the ambiguity; I meant why below as opposed to above? I don't recall the nature of the order being stated. Perhaps I am just sleepy

Regards,
xXTrizzleXx
Yes it was stated Trizzle, and check it out, they tried to hold it above until it expired then....
  • #26
  • Jan 6, 2011 1:06pm Jan 6, 2011 1:06pm
Quoting Adal
You can see some BEAUTIFUL stop hunts going on (the price attacks the thick red/green line which are clustered orders)
It's a nicely made video. Thanks for sharing it. It really shows you how banks of orders are eaten up for breakfast with no problem at all. People around here should be a bit more aware of it before placing as much dependency as they do on "S/R". These are, quite literally the food/fuel of the market.

I do have to say though that IMO this activity doesn't really represent "stop hunting" (say, by a single party) as it is normally thought of. Unless you consider the normal facilitation of trade by the market to be nothing but the hunting of stops. Then, I would agree - the orders are just fuel for the fire.

Let's "eat some breakfast"!
  • #27
  • Jan 8, 2011 6:18pm Jan 8, 2011 6:18pm
threads like these always fade in nothingness...
come on guys, we learnt that to be consistent we need to exploit market inefficiencies, and orderflow gives you a chance in that, but how with only a chart?
Let's get some new ideas here.
  • #28
  • Jan 8, 2011 6:59pm Jan 8, 2011 6:59pm
Quoting Carnegie
Hi guys,

Since the FX market is OTC, there is no "center" orderbook or whatever I should call it. What we have is FXCMs orderbook, OANDAs orderbook etc. which wont help at all because no big banks or big indivduals trade their order thru these small retail brokers.
ill give u a clue,the system is manipulated for us small guys to loose ,this is simply an exchange u think banks will be dumm enough to create a marketplace so u can take enormous amounts of money from them,no sir

ok what i started doing,is go to the oanda positions tools lab and etoro open positions and do evrything the opposite that traders do,i tryed it this week and scooped 40 pips with uscad,fxcm has it too on dailyfx

btw ur young,come to college traders threats and trading limit orders ull be suprised to know that there is many of college kids here,im 18 in march too

cheers
btw read master the markets tom williams the best book evr written and also read jesse livermores books,
  • #29
  • Jan 9, 2011 11:19am Jan 9, 2011 11:19am
Quoting scott89
threads like these always fade in nothingness...
come on guys, we learnt that to be consistent we need to exploit market inefficiencies, and orderflow gives you a chance in that, but how with only a chart?
Let's get some new ideas here.
Very good initative there, Scott. Thank you.

I have also noted that the order flow threads always end abruptly. But in this case I have written in the first page why I stopped writing. You cannot see order flow blindly.
The amount of reading necessary to understand the structure of the market is incredible but I am more than willing to spend my time at it.


Dragan:
Thank you for your comments. It is obvious for everyone that this is not a place to spend one month and become a millionaire on. If banks or brokers are our counterpart in the transaction then it is obvious that he who created the game will be the one winning.
But here on FF we have a couple of guys that have proved that if you do your homework then it is very possible to be in the winning 5% or whatever that number is.


Congratulations on your wins btw. I have also read about that but it is not in my interest as I want to read as much as possible about order flow. And btw, there is a thread on FF about these kind of trades, i.e. looking at what the "herd" is doing and fading them.

Thank you for recommendations (books), I have already read T.W as I was interested in VSA a while ago. A good read.

Thank you all and good luck.
  • #30
  • Jan 9, 2011 11:47am Jan 9, 2011 11:47am
I do like the language style you present your thoughts in, your English is quite fine.

Just out of curiosity do I ask this... Why do you think your thought process needs to be changed? Just because one of your stops was taken?

Quoting Carnegie
Hi guys,

I have been reading allot of Darkstars posts and found this order flow stuff very interesting.
So I have been looking around the net for Order flow info and just found things about "tape reading" and level 2 orderbooks etc but here is my take on it:

..............................
PS. Sorry for my English, if you do not understand what I mean I will happily try to explain it more.
  • #31
  • Jan 9, 2011 1:55pm Jan 9, 2011 1:55pm
Quoting Adal
Look at this video that I've made (click to go to YouTube and view full-screen in 720p).
Thanks for the effort.

Is there some software that allows to record all this data in parallel?
  • #32
  • Jan 9, 2011 4:06pm Jan 9, 2011 4:06pm
Quoting uexkuell
Thanks for the effort.

Is there some software that allows to record all this data in parallel?
No, it's my custom Python script which collects interesting or actionable financial information from the net, like client positioning from brokers, twits from StockTwits, or price forecasts from banks. Just these days I've added price forecasts from Mizuho into the mix.

I started collecting this data in September. Once I will have enough info I will be able to search for patterns in other things beside price.

I will post updates to this video and other videos in the future. And I have an interesting idea for a video using Oanda box-options.
  • #33
  • Jan 10, 2011 12:05am Jan 10, 2011 12:05am
thanks for all ur comments,i mostly learn all this stuff,as i make a trading mistake then fix it up and get my money back,lol
  • #34
  • Jan 10, 2011 1:41am Jan 10, 2011 1:41am
Quoting Carnegie
Very good initative there, Scott. Thank you.
I have also noted that the order flow threads always end abruptly. But in this case I have written in the first page why I stopped writing. You cannot see order flow blindly.
So you mean that you cannot see it on a simple candlesticks chart? That's what I'm trying to do.
I know, market structure understanding is needed, otherwise it's like playinga tetris game without knowing what you have to do...
  • #35
  • Jan 10, 2011 4:48am Jan 10, 2011 4:48am
Quoting shiva
I do like the language style you present your thoughts in, your English is quite fine.

Just out of curiosity do I ask this... Why do you think your thought process needs to be changed? Just because one of your stops was taken?
The thought of process needs to be changed because I understood that I have not a single clue about WHY things are happening. Why did it fail? How was my counterpart thinking?

Now, I have attached a picture to let you all know how I am going about all this.
This is EURUSD 1HR recent price action. Let's say we shorted on the break of the pinbar. We are in big profit at the consolidation I have marked on the chart, with a blue and black horizontal line.

When this consolidation happens, there is a phase of accumulation/distribution. We don't take any position inside the consolidation, we just wait and see which way price will break out and this is how we do it:
Since we're already short we place our Stop-Loss just ABOVE the consolidation. You may ask why?
If the price would break out on the LONG side of the consolidation, most likely the downmove is over, and our stop-loss in this case is a order for closing our SHORT trade which results in our broker seeing this as we are going LONG.

Likewise, techincal traders anticipating a move up here since it is a Support and Resistance area have their stops (MOST LIKELY, NOT GUARANTEED) just below the consoldation area, and if price moves down there their stops will result in SHORT orders and price will cascade down.

The idea is that there are technical traders trying to catch a long BREAKOUT from the consolidation by setting up orders above the consoldation price action. Equally, there are breakout traders trying to catch a short movement (i.e. having stops below consolidation) and there are those with stop-losses below consoldation.

See what I mean? In each case (up or down) price should cascade in the direction. BUT IT DIDN'T. And I have to know why, I just can't live with the idea that something happens 95% of the time and 5% not. I have to atleast know WHY.

Quoting dragan53
thanks for all ur comments,i mostly learn all this stuff,as i make a trading mistake then fix it up and get my money back,lol
Well I believe it is the best way to go about this (I don't know much so don't rely on me though) IF you are the kind of person that learn from your mistakes. But as long as you get your money back it's better than allot of us

Take care and good luck.


Quoting scott89
So you mean that you cannot see it on a simple candlesticks chart? That's what I'm trying to do.
I know, market structure understanding is needed, otherwise it's like playinga tetris game without knowing what you have to do...
Hey Scott,

In all honesty, I would be lying if I told you yes or no. I will from now on spend my time reading until I understand all of this, because as of right now, I don't have a single clue.
I do believe though, that it should be possible to do it from a candlestick chart, and the only way to know this is continue to study and PRACTICE all of your ideas on the market to see if it works or not!

Yes, I agree with you on that one. Knowledge of the market structure is needed because that will most likely give answers to allot of the questions Technical Anlysis cannot answer to us. But that is another discussion.


Thank you all for contributing. Take care and happy trading.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.png Size: 110 KB
  • #36
  • Jan 10, 2011 5:03am Jan 10, 2011 5:03am
Quoting Carnegie
Likewise, techincal traders anticipating a move up here since it is a Support and Resistance area have their stops (MOST LIKELY, NOT GUARANTEED) just below the consoldation area, and if price moves down there their stops will result in SHORT orders and price will cascade down.

The idea is that there are technical traders trying to catch a long BREAKOUT from the consolidation by setting up orders above the consoldation price action. Equally, there are breakout traders trying to catch a short movement (i.e. having stops below consolidation) and...
I don't know that the techies necessarily went long at the first sign of support during the consolidation. I think they would have had orders waiting on both sides. When price broke downwards, they were probably in the trade short. If price then came back up, it could have triggered their stops above the consolidation range. That's one scenario.
  • #37
  • Jan 10, 2011 5:44am Jan 10, 2011 5:44am
carnegie ask questions and demand answers the only way to find out whats happening
  • #38
  • Jan 10, 2011 6:31am Jan 10, 2011 6:31am
Quoting Carnegie
In each case (up or down) price should cascade in the direction. BUT IT DIDN'T. And I have to know why, I just can't live with the idea that something happens 95% of the time and 5% not. I have to atleast know WHY.
It would only cascade in a direction (i.e. down) if the orders there (breakout shorts and stop losses from longs... and then anyone else who joins in later) are of sufficient size to consume the bid side liquidity for whatever
cascade distance. Also consider that even if there are good sized sell orders below consolidation, there can be already existing shorts that push below consolidation and buy back their positions from the sell orders below consolidation, thereby consuming the breakout/stop loss positions without causing a price cascade to the down side - in fact if the existing shorts are larger than the sell orders down there, their buying back will likely cause price to go right back up (and then the new shorts will have floating losses and will start buying back their positions as well etc.)
  • #39
  • Jan 10, 2011 9:15am Jan 10, 2011 9:15am
Quoting eurotrash
Also consider that even if there are good sized sell orders below consolidation, there can be already existing shorts that push below consolidation and buy back their positions from the sell orders below consolidation, thereby consuming the breakout/stop loss positions without causing a price cascade to the down side - in fact if the existing shorts are larger than the sell orders down there, their buying back will likely cause price to go right back up (and then the new shorts will have floating losses and will start buying back their positions...
Your comment here is very good and I quoted the part most interesting. Isn't this what is referred to as "stop hunting"? Triggering the stops and the big guys buy into the short orders that are triggered in the move down?

Thanks eurotrash, happy that you could join the thread. I have read many of your posts and you are one of the few in this forum that have knowledge about market structure.
  • #40
  • Jan 10, 2011 9:48am Jan 10, 2011 9:48am
Quoting Carnegie
Your comment here is very good and I quoted the part most interesting. Isn't this what is referred to as "stop hunting"? Triggering the stops and the big guys buy into the short orders that are triggered in the move down?
Yes in a way, I merely made that example to show one reason why even if there was good sized sell orders below consolidation, price would not necessarily have cascaded/fell. Is it stop hunting? Depends on what stops are. When most people say "stop hunting", they're referring to their actual stop loss orders. It needn't be those, just a "liquidity pool" to the appropriate side which others can dump their existing position into, and/or take an opposing position, without moving price against themselves as much as they would if that liquidity was not there. Now don't think I'm suggesting that if price breaks below consolidation and then goes back up then that's necessarily a stop/liquidity hunt.
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