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Order Flow - Finding cluster of stops on chart

  • #381
  • Jan 23, 2011 3:18pm Jan 23, 2011 3:18pm
Quoting triger88990
Gold is not a bubble, although it's making an all time high, but it hasn't come close to hitting its old highs in real terms, if you take in consideration inflation
The whole argument that gold is going higher just because it is not near it's inflation adjusted value is ridiculous. People like to make false assumptions that just because the inflation adjusted value from 1970 should be $5,000 or whatever, they believe that a financial instrument must somehow be worth that much, or be valued at that much. They make false assumptions that somehow a financial instrument be it gold or w/e must take into account some inflation reading in determining its price appreciation. It is one of the many fallacies that perpetuates into the future.

The only time that argument for price going up or down is worth anything is if it generates order flow, sufficient aggressive order flow to move prices.

If the market participants who are going to be buying truckloads of gold don't care about what inflation adjusted value is, and thus don't buy based off that, and don't generate order flow, then it is meaningless.

I am sure there are some people buying gold because they believe the inflation adjusted value should be $5,000. The only problem is they are not currently aggressive enough or large enough to stop prices from sliding, and as such are currently wrong.
Private message me for a link to my order flow website.
  • #382
  • Jan 23, 2011 3:19pm Jan 23, 2011 3:19pm
Quoting Adal
The same myth over and over again. That retail is peanuts, that it doesn't count in the great scheme of things.

The reality is that retail is big business these days. 5-10% by some reports. That would make it the third global player by volume, after DB, UBS and Barclays.

Here it's reported to be $118 bln daily, which confirms the 5-10% figure - http://forexmagnates.com/retail-fore...eptember-2010/

Of course, to be aware of such things would require someone to actually research stuff on the net, instead of acting...
Data from one retail broker != All retail broker data. Maybe you need to go back and read some of darkstars posts on market structure.
Kind Regards Chris
  • #383
  • Jan 23, 2011 3:24pm Jan 23, 2011 3:24pm
Quoting chriskins
Not sure a particular retail broker's volume is significant against over a trillion a day from the other participants. But if it works for you then go for it.
You're right. Also, this "sample" in no way is a good representation of the population.
The nail that sticks out gets hammered back in
  • #384
  • Jan 23, 2011 3:30pm Jan 23, 2011 3:30pm
Quoting chriskins
Data from one retail broker != All retail broker data. Maybe you need to go back and read some of darkstars posts on market structure.
How about data from the first three of them by volume, which incidentally make available such data? By some strange coincidence, the three data sets are very correlated. When traders go overboard buying USD/JPY on Oanda, they do the same on FXCM and on Dukas. What could explain such a strange thing? Maybe they all think the same? No, that couldn't be... Maybe you should read something about statistics and sampling in particular...

No offense to DS, but instead of reading posts about market structure from an unknown quantity, I prefer reading books and academic papers about that. Of course, when DS's book will be out I will be reading that too

All the cool stuff I learned was from books and research papers, not from retail forums.
  • #385
  • Jan 23, 2011 3:36pm Jan 23, 2011 3:36pm
Quoting grkfx
The whole argument that gold is going higher just because it is not near it's inflation adjusted value is ridiculous. .........
Sorry but I have to say that you get me all wrong, I never made such an assumption.

all the best
  • #386
  • Jan 23, 2011 3:39pm Jan 23, 2011 3:39pm
Quoting triger88990
Sorry but I have to say that you get me all wrong, I never made such an assumption.

all the best
sorry then for jumping the gun
Private message me for a link to my order flow website.
  • #387
  • Jan 23, 2011 3:53pm Jan 23, 2011 3:53pm
Quoting Adal
How about data from the first three of them by volume, which incidentally make available such data? By some strange coincidence, the three data sets are very correlated. When traders go overboard buying USD/JPY on Oanda, they do the same on FXCM and on Dukas. What could explain such a strange thing? Maybe they all think the same? No, that couldn't be... Maybe you should read something about statistics and sampling in particular...

No offense to DS, but instead of reading posts about market structure from an unknown quantity, I prefer reading...
If you think 3 retail brokers data is a good sample of the over FX markets volume then I don't know what to say to you. Good luck with your trading.
Kind Regards Chris
  • #388
  • Jan 23, 2011 4:04pm Jan 23, 2011 4:04pm
I think I, and most others, would appreciate keeping this thread civilized. From all apparences this is not a "my junk is bigger than yours" thread, but an exploration of ideas, starting by a person who is searching for something beyond pinbars, to try and gain a better understanding of what is actually going on in the market.

I find this thread very interesting, and would hope some of the more egotistical of you could tone it down a bit as to not scare others off.
  • #389
  • Jan 23, 2011 4:08pm Jan 23, 2011 4:08pm
Quoting chriskins
If you think 3 retail brokers data is a good sample of the over FX markets volume then I don't know what to say to you. Good luck with your trading.
I'm not doing an FX census. All I need is an extra edge. 3 retail brokers is enough to know what retail traders are up to. Knowing how 10% of the market stands is valuable information.

Why does FXCM have such tough conditions for giving you access to minute level SSI client positioning information? Probably because it's useless...

Just wanted to point out that real order flow information is freely available, but instead of actually trying to do something with it, people bitch that it's not perfect and go back to useless S/R charts for predicting where the stops are.

Anyway, I'm stopping here per Jimmy's request.
  • #390
  • Jan 23, 2011 4:11pm Jan 23, 2011 4:11pm
Guys, aren't we totally Off Topic?
  • #391
  • Jan 23, 2011 4:16pm Jan 23, 2011 4:16pm
Quoting scott89
Guys, aren't we totally Off Topic?
I think so

Last year while I was in Japan, there was a few weeks where I stopped trading, took a pen and paper and tried to "draw a market" out with descriptions, in terms of supply and demand only.

It was a difficult exercise, but I am going to try it again. Having a good understanding of what is causing price to move is very important to me, I have no faith in indicators / strategies using calculations of past price to try and predict future movements, so trading that way just doesn't work for me. I really want to gain as good an understanding as I can of why price is actually moving.

This thread is helping me, and I hope it can continue in the manner it has before the last few hours...
  • #392
  • Jan 23, 2011 4:20pm Jan 23, 2011 4:20pm
Quoting Adal
I'm not doing an FX census. All I need is an extra edge. 3 retail brokers is enough to know what retail traders are up to. Knowing how 10% of the market stands is valuable information.

Why does FXCM have such tough conditions for giving you access to minute level SSI client positioning information? Probably because it's useless...

Just wanted to point out that real order flow information is freely available, but instead of actually trying to do something with it, people bitch that it's not perfect and go back to useless S/R charts for predicting...
You are wasting your time, without paying large monthly fees you will never know enough order info in FX to be of any use, just trying to save you some time.
Kind Regards Chris
  • #393
  • Edited 4:42pm Jan 23, 2011 4:30pm | Edited 4:42pm
Quoting chriskins
There is no order book, or centralised volume information. So not sure what you have but I would guess unless you work for a central bank or a huge IB then you have nothing that is exploitable.
Ahh, this tired ass argument again...

Let me rewrite your post so the assumptions your making are more obvious:
Quote
"The only way I can think to see order flow is by looking at the order book of a central bank or huge IB. Since nobody outside these institutions can see the order book, I don't see how order flow can be read."
Had you written your post like that you would have likely received a response pointing out why your assumptions are flawed. In the process, you would have grown more knowledgeable and avoided making your second deeply flawed post...
Quoting chriskins
Not sure a particular retail broker's volume is significant against over a trillion a day from the other participants. But if it works for you then go for it.

Lets rewrite it in the same light:
Quote
"Hmm... Since you guys weren't dazzled by my brilliance when I said that you needed the order book of a central bank or huge IB, I can only assume that you are reading the order book of some retail brokerage. That being the case, I feel it necessary to point out that retail is only a small part of the $1trillion+ per day Forex market. Much more goes on outside retail, so one can only assume that looking at retail is a pointless exercise."
Never mind that its $4t now, or that retail traders tend to have the same motivations and utilize the same strategies as larger interbank participants, the simple fact is that looking at an order book of any type is not how order flow is read. Its read by deconstructing the logic processes of participants within the context of the execution limitations imposed by market microstructure.

In any event, this thread is for aspiring order flow traders to work out how to do what you choose to believe can't be done.

Your welcome to join the effort, but if all you want to do is point out how stupid it all is, maybe it’s best if you do so in your "deconstructing trading assumptions" thread. We have a great deal going on here and posts like yours do little more than muddy up the conversation.

Luck be with you
  • #394
  • Jan 23, 2011 4:50pm Jan 23, 2011 4:50pm
Quoting Darkstar


Ahh, this tired ass argument again...

Let me rewrite your post so the assumptions your making are more obvious:



Had you written your post like that you would have likely received a response pointing out why your assumptions are flawed. In the process, you would have grown more knowledgeable and avoided making your second deeply flawed post...

...
Firstly I never said the only way to trade order flow is by using order books etc, I think price action is a representation of order flow.

I don't think it's all stupid, to have knowledge of market structure and order flow dynamics I would say is only going to help your trading. I was simply questioning Adal when he said he had other non price information from retail brokers that would give him an edge.

"Its read by deconstructing the logic processes of participants within the context of the execution limitations imposed by market microstructure."


I agree completely here, and that is why I was advising against looking at a few retail brokers data and trying extrapolate that to the whole market.
Kind Regards Chris
  • #395
  • Jan 23, 2011 4:53pm Jan 23, 2011 4:53pm
Darkstar, have a question to ask you, if you have some time left for me

how do you see the forex market without the retail side?

how business will be conducted in term of search for liquidity

all the best!
  • #396
  • Jan 23, 2011 4:54pm Jan 23, 2011 4:54pm
Quoting Darkstar
looking at an order book of any type is not how order flow is read. Its read by deconstructing the logic processes of participants within the context of the execution limitations imposed by market microstructure.
'deconstructing the logic processes of participants within the context of the execution limitations imposed by market microstructure.'
I think the answer is in those simple words.

Anyway, I don't know about you guys, but I don't fell like making money without understanding would be enough to me anymore at this point. Actually, 'making money' passed in background for me. Couriosity leads me to research the truth, to try to understand WHY things happen and HOW they do.
  • #397
  • Jan 23, 2011 5:02pm Jan 23, 2011 5:02pm
Quoting scott89
'[color=black][font=Verdana]
Anyway, I don't know about you guys, but I don't fell like making money without understanding would be enough to me anymore at this point. Actually, 'making money' passed in background for me. Couriosity leads me to research the truth, to try to understand WHY things happen and HOW they do.
Yes, it' s not about the money, but about becoming a master at your art .
“Nothing great in the world has ever been accomplished without passion.”
  • #398
  • Jan 23, 2011 5:02pm Jan 23, 2011 5:02pm
Quoting chriskins
I agree completely here, and that is why I was advising against looking at a few retail brokers data and trying extrapolate that to the whole market.
Fair enough. Sorry if I pounced on you. I just don't want the thread to devolve into another "this is all nonsense" argument. We had way too many of those with pipmongrel or whatever his name was...
  • #399
  • Jan 23, 2011 5:06pm Jan 23, 2011 5:06pm
Quoting Darkstar
Fair enough. Sorry if I pounced on you. I just don't want the thread to devolve into another "this is all nonsense" argument. We had way too many of those with pipmongrel or whatever his name was...
No worries, I just scanned this thread quickly, I am going to have a good read as it is extremely interesting to me. Sorry for my glibness earlier.
Kind Regards Chris
  • #400
  • Jan 23, 2011 5:06pm Jan 23, 2011 5:06pm
Quoting triger88990
Darkstar, have a question to ask you, if you have some time left for me

how do you see the forex market without the retail side?

how business will be conducted in term of search for liquidity

all the best!
The retail/insti dichotemy is a bit of a red herring. The fact is insti traders do the same things that retail traders do, just on a bigger scale. So if retail disapeared tomororw, you wouldn't notice much, if any, difference in the way price behaved. Liquidity would be lower, but there would be fewer orders chasing it as well...
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