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Order Flow - Finding cluster of stops on chart

  • #221
  • Jan 20, 2011 2:13am Jan 20, 2011 2:13am
Quoting Benevolent
It's a combination of tape reading, fundies, a reliable data vendor(Just as Scotty has mentioned) and a few other nick-nacks. This is only my perception of liquidity traps, however.

Best to you.

P.S. This trade was analyzed from the 4 hour to 15 minute. I'm looking for a 1-2 day hold, I enjoy when interest rate differentials are in my favor as well. Just a personal preference I suppose(Thanks Dom ).
ok, I think I have a sort of feeling of your reasoning, but there is nothing happening there regarding of what we have discussed recently,just the way I see thinks developing

I'm not so versatile when it comes of explanations.

but you have said that the implication of such a developing will affect the following 1-2 days ---> quote: " I'm looking for a 1-2 day hold..."

Being said that your timing is wrong,bc you should have waited for the current day session to close,only then you can be sure of their intention, if they manipulated the price or not.

Hope you do not get offended is just my perception based on my own observations

anyway nice to see others opinions

all the best.
  • #222
  • Jan 20, 2011 2:28am Jan 20, 2011 2:28am
I just realised my comments were way behind the times, some of you have already discovered the 'void'! I'm no expert but I do trade market/exchange mechanics with pretty good success. I don't use any Technicals or Fundamentals at all.

I'll have a proper read through and see if I can chip in with anything of worth later.
"I made all my money by selling too soon"
  • #223
  • Jan 20, 2011 2:36am Jan 20, 2011 2:36am
Quoting Benevolent
It's a combination of tape reading, fundies, a reliable data vendor(Just as Scotty has mentioned) and a few other nick-nacks. This is only my perception of liquidity traps, however.

Best to you.

P.S. This trade was analyzed from the 4 hour to 15 minute. I'm looking for a 1-2 day hold, I enjoy when interest rate differentials are in my favor as well. Just a personal preference I suppose(Thanks Dom ).
Hi!
Am i somewhere near?
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  • #224
  • Jan 20, 2011 2:52am Jan 20, 2011 2:52am
Quoting Scotty B
No, I don't think you can differentiate between a move that will experiance negative feedback (be reversed) with only a chart, I could be wrong. Because fundamental information is so asymmetric, it would be impossible to know who is really making a move happen unless you had actual order information (time and sales), or you knew for example that a barrier was being knocked out.

The knocking out of a barrier, when values have not changed creates a stochastic effect in the market. The market is incentivized to make a round trip. Those who are hunting...
Wow!

So if I understand you correctly, it all keys on the ability to get the barrier info the quickest. If this is so, it all leads back to the fastest and MOST complete news AND rumor feed. When I see these tips about option barriers, they are never confirmed; the story is always rumored, but the rumor has generally turned out to be correct and that fact shows up in the chart when price reaches the barrier. Note that, on this advice, I have been successful in placing trades that tag along with price, because I have been fairly confident that price will make it to the rumored barrier. I have never had much success trading at the barrier price. I think this would be considered the classic stop hunt area. IMO, the reason is because the informed traders are already done with the feast and there are few scraps left at the barrier level, or when the barrier turns out to be very strongly defended, then to fight the defense so late in the game would be futile.

In other words, trading the rumor to the barrier seems to be the best strategy from my experience.
  • #225
  • Jan 20, 2011 2:56am Jan 20, 2011 2:56am
My shot at previous example AU. The SL aggregation in this example should be very obvious imo:
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  • #226
  • Jan 20, 2011 3:32am Jan 20, 2011 3:32am
Quoting CindyXXXX
Rubbish... anyone can its just most won't but its not because they can't. I don't believe anyone is smarter than the next person, just that some spend more effort understanding than others (becasue they want to). We all have brains and forever 2x2 will equal 4

Just my opnion
Years ago someone suggested I couldn't do something. I disagreed, stating that I just won't do it. Upon reflecting, I realised there was no difference between the two.

Quoting Vorbis
I wouldn't write people off quite so completely.
I wouldn't write an individual off, but as the group increases in size the overall result is inevitable. I disagree as to why most fail - I think most fail to develop a good mindset. Perhaps they lack the intelligence, perhaps it just never clicked before they stopped trying. It doesn't really matter - the result is the same.

Quoting Carnegie
It seems to me as if I am the threadstarter, and I am the one who right now knows/UNDERSTANDS the least of all of you.
Perhaps you're just the most honest with yourself.
  • #227
  • Jan 20, 2011 4:09am Jan 20, 2011 4:09am
At times of high market liquidity, the various classes of market participants are correctly proportioned and a more accurate value given. When lower liquidity is present because of liquidity suppliers guarding against risk during various events the market has a high probability of episodic volatility occuring.
  • #228
  • Edited 5:25am Jan 20, 2011 4:24am | Edited 5:25am
thats a "bull trap" what have happen in the last hours on eu, the second attack to 1.35 is due to fail, 3510 already mine

edit 3480 is where they will show up their intention, they are fighting back
edit2: the map is unclear at the moment
edit3: is done, there is nothig there left they clear up the road for it to go forword, liquidate..they where building up for another attack
  • #229
  • Jan 20, 2011 4:35am Jan 20, 2011 4:35am
Quoting triger88990
thats a "bull trap" what have happen in the last hours on eu, the second attack to 1.35 is due to fail, 3510 already mine
All i see is a bear trap (On daily scale this is retest of strong price pivot and this was just a stop hunt below last low to acquire bigger position...look at that spike).
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  • #230
  • Jan 20, 2011 5:27am Jan 20, 2011 5:27am
Quoting Darkstar
You guys are so lazy sometimes...
Hey Darkstar, I want you to read this post and really try to understand what I mean, and while you read it (and even before you began reading it) please understand that this is really meant with all respect in the world and I am trying to learn here.

You cannot understand the amount of SHIT about market microstructure I have been reading since I started this thread. To continue, you cannot understand the many questions I have been asking BESIDES the one in this thread.

I don't think the proper word for this is "lazy". Really I don't want to come forward as "the retail trader who never gave up"-bullshit but really I have been studying as a bitch and still I am not getting anywhere. I don't think it is a matter of laziness but rather it is a question that not many of us know WHAT and WHERE to look for things.

For you this might seem obvious (i.e. what to search for) because you already know this. And in my mind, you must be some kind of a ultra code-cracker something in the way of Tom Hanks in the Da Vinci code.
Why am I saying this? Easy.. When I started reading T&E I found some stuff and immediately understood what he was talking about in the book, because these concepts have already been explained to me by you and other people. BUT HOW THE HELL DID YOU FIND THEM?
I don't know how to explain how I'm thinking but look at it in this way: We are reading/searching the book because we already know what to look for.. When you started, YOU DIDN'T KNOW.
It is of utter interest for me to understand, how did you do this?

Really this post may seem as some kind of bullshit or something, but I'm really trying to learn how "to think" outside the box and the way I see it, you have to start thinking (about "the box") to think outside the box to start with

For you it's lazy, for us - we're just looking around and not finding shit because we don't know where to look and what to look for. This is also, WHY I THINK, most order flow threads just mess up in the end.

Look at the first page of this thread and continue to page 5. If you wouldn't have posted anything there (i.e. the clue you gave), this thread would not have been anywhere near where it is - and by this I mean infomation-wise and post count-wise.

I hope you will understand that I am not asking you this just because I want to learn more about trading, no, this is not the only reason. The fact of the matter is that I possess the exact kind of "what to look for"-mind as you do, but unfortunately, NOT when it comes to trading.
It appeared obvious for me and my teachers when I started school that everything within philosophy and psychology was pretty damn easy for me to find. I.e. "what the author meant", and was super-easy to comprehend. But it is unfortunate, that I do not have this sort of thinking when it comes to other stuff.. like trading..

Hopefully one of you will understand something from my jibber-jabber here.
Take care everyone.
  • #231
  • Jan 20, 2011 5:27am Jan 20, 2011 5:27am
It feels like ideas are drying up in this thread. =/
  • #232
  • Jan 20, 2011 6:15am Jan 20, 2011 6:15am
This from the guy who wanted this thread to die

No offense guys but you re just not gonna learn this in a week. There is so much info on this thread already that if you can't see it yet then maybe you re just not ready but that's ok some of us have just had much longer to ponder over the same questions

Personally I think it went down hill when people started posting price charts but each to their own. Now get out of this rat hole and go study
Time hides Nothing
  • #233
  • Jan 20, 2011 6:20am Jan 20, 2011 6:20am
Quoting CindyXXXX
This from the guy who wanted this thread to die

No offense guys but you re just not gonna learn this in a week. There is so much info on this thread already that if you can't see it yet then maybe you re just not ready

Personally I think it went down hill when people started posting price charts but each to their own. Now get out of this rat hole and go study
Funny thing you say there cindy.. Yesterday I looked at the thread and had the feeling that everyone knows more than I do and was really on overload trying to understand.. So I went to sleep, you know why?

Because in the back of my mind this has happened before.. Funny thing you said there: "There is so much info on this thread already that if you can't see it yet then maybe you re just not ready". That is exactly what I thought to myself.

So I went to sleep and said to myself I wont think "firmly" about this thread until I have finished T&E. Because at the moment, I'm just guessing on what you guys said with help of my vague concepts of what "liquidity" is (for example).

So, I agree 100%. There is more than what's on the surface. But I'm not ready yet.

Take care!
  • #234
  • Edited 6:44am Jan 20, 2011 6:27am | Edited 6:44am
The key is knowledge. If there's one thing that separates darkstar etc from the rest of us it's that they have imense amounts of knowledge from good old fashioned hard work. Theres only so much "work" you can do on a price chart IM humble O of course.

I guess from there it's a matter of applying what you know to your advantage which is probably the hardest bit but the most fun I imagine




Quoting Carnegie
Funny thing you say there cindy.. Yesterday I looked at the thread and had the feeling that everyone knows more than I do and was really on overload trying to understand.. So I went to sleep, you know why?

Because in the back of my mind this has happened before.. Funny thing you said there: "There is so much info on this thread already that if you can't see it yet then maybe you re just not ready". That is exactly what I thought to myself.

So I went to sleep and said to myself I wont think "firmly" about this thread until I have...
Time hides Nothing
  • #235
  • Jan 20, 2011 8:05am Jan 20, 2011 8:05am
Good day everyone.

I've been watching this thread closely the last few days. Very interesting info and ideas has come from a few members here. So thanks for that.

I've been trading for 2 years now and I've spend a lot of time researching, that includes reading, back testing and trading, but up until the start of this thread I still couldn't understand the most basic thing and that was how and why prices fluctuate. I knew when there is a demand for a currency for whatever reason, traders will buy it and price will head up, but that is too simple. I had to know more and get a better understanding.

Now that I've read some posts about liquidity, the distribution of it and equilibrium, things make much more sense, although I now only understand a very small part of order flow. I'm going deeper into the rabbit hole and I want to know more. I know this is something that will take time, but there is no turning back now.

I have taken the red pill.
  • #236
  • Jan 20, 2011 8:33am Jan 20, 2011 8:33am
There is a lot of things that has been posted in this thread that I don't understand so I want to ask a few questions and clarify a couple of things for myself.

The best way to do this is by an example:

Trader X is watching the USD/CAD pair and from his analysis he decides it's time to buy USD. So he buys 1000$ @ 1.0000 (The figure is irrelevant and is just used for the example.)
If there is enough liquidity available, his order will get filled without the price moving up.
If there is not enough liquidity, the broker will fill his order at a higher price where there is enough liquidity, lets say at 1.0020. Is this correct?

I have read that market orders demand liquidity and limit orders provide liquidity, but don't you also provide liquidity when you place a market order? ex. if Trader X buys his 1000$, don't he provide liquidity to Trader Y who wants to place a short order?

After an order has been filled, does it still affect liquidity while it is open or does it only affect liquidity when you want to exit that trade or when your stop is hit?

This is basic questions, but I hope I can get some clarity on it.
  • #237
  • Jan 20, 2011 8:39am Jan 20, 2011 8:39am
Quoting CindyXXXX
This from the guy who wanted this thread to die

No offense guys but you re just not gonna learn this in a week. There is so much info on this thread already that if you can't see it yet then maybe you re just not ready but that's ok some of us have just had much longer to ponder over the same questions

Personally I think it went down hill when people started posting price charts but each to their own. Now get out of this rat hole and go study
That's what I also was thinking about.
So I started to read the thread from the beginning, here's a little summary, hope you apprecciate.
Let's go back IN TOPIC.

Balance of DOM --> Big order --> Disequilibrium --> Vacuum effect.
How would that look on a chart?

And another thing clicked in my head, what about spread? I mean, that's another thing we see on the chard, with a big order coming in the spread would widen, but only on one side. If the order is a BUY order, only the ASK price would move and widen the spread.

Am i totally wrong and deviating from the path of right thinking?
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  • #238
  • Edited 9:24am Jan 20, 2011 9:09am | Edited 9:24am
Quoting PiptheRipper
There is a lot of things that has been posted in this thread that I don't understand so I want to ask a few questions and clarify a couple of things for myself.

The best way to do this is by an example:

Trader X is watching the USD/CAD pair and from his analysis he decides it's time to buy USD. So he buys 1000$ @ 1.0000 (The figure is irrelevant and is just used for the example.)
If there is enough liquidity available, his order will get filled without the price moving up.
If there is not enough liquidity, the broker will fill his order at a...
Make the distinction between you trading as an individual and you making market (broker). If you hit the buy button, you expect your order to be filled at the price quoted, in this case Long Loonie @ X.XXXX. If you’re long, then there has to be a counterparty to offset the trade, if there’s not you put your MM, market maker, short until he can find a seller. When a rush of orders comes in the market has to find the counter-side to fill or else the MM assumes all the risk, at times they will as most traders are usually on the wrong side of the market, but there has to be some type of retrace eventually for the broker to square. Brokers usually bundle and offset level up with their liquidity providers.


As the order rush comes in, all available liquidity in that area gets eaten up, if there’s more order volume than liquidity to fill, price has to move to find equilibrium, if orders keep coming in price keeps moving until it’s reached. The price generated by your MM is a shaded average spread of what’s available to him intra-bank from his liquidity providers combined with his in-house liquidity available, there may be several brokers dealing up with the same providers. Your broker has big time algo’s running that handle average price, spread, ect…. to help him control his book. He’s not going to quote you something he can’t fill and make a profit doing it..


The main concept I think DS wanted to hammer down is the makeup of the market (order volume, placement or the lack there of (vacuum) , when price moves, what happens not necessarily the nuts and bolts of the transaction.



fwiw
  • #239
  • Jan 20, 2011 9:16am Jan 20, 2011 9:16am
Quoting scott89
And another thing clicked in my head, what about spread? I mean, that's another thing we see on the chard, with a big order coming in the spread would widen, but only on one side. If the order is a BUY order, only the ASK price would move and widen the spread.

Am i totally wrong and deviating from the path of right thinking?
Definetly thinking along the right lines - Also you can imagine before a big news event that the spread will suddenly widen... This ISNT the brokers being assholes it happens becasue large players may pull orders out of the market to avoid getting caught when they may be unsure about what will happen. With all that liquidity being removed from the market naturally the spread needs to widen to a point where there is enough liquidity to satisfy current demand

I'm borrowing an example from DS and probably murdered it but hopefully you get the gist

Also like someone else pointed out I dont think theres one specific way to trade order flow bid ask may just be one aspect of it.
Time hides Nothing
  • #240
  • Jan 20, 2011 9:37am Jan 20, 2011 9:37am
Quoting Benevolent
For those of you interested, the AU will be having the same vacuum type scenario for a long.
Was looking good until 4 hours ago... What happened?

Don't worry its always when someones watching lol

Such is Life
Time hides Nothing
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