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  • #21
  • Jan 26, 2011 6:06am Jan 26, 2011 6:06am
Quoting Vorbis
I may be wrong, but I think MT-4 displays the bid price.
It also can display the Ask as well for the broker it is running on
  • #22
  • Jan 26, 2011 6:18am Jan 26, 2011 6:18am
I stand corrected, gentlemen.
  • #23
  • Jan 26, 2011 6:23am Jan 26, 2011 6:23am
Quoting Scotty B
I stand corrected, gentlemen.
Well, not necessarily, because of the nature of spot, the chart only reflects the pricing from the broker that quotes it. So I think your main point is still valid, that the chart is not where one will find the bid / ask that is probably more widely being traded.
  • #24
  • Jan 26, 2011 11:03am Jan 26, 2011 11:03am
Thanks for the spreadsheet ScottyB. Someone mentioned you have been watching futures too long, do you trade futures? Or just watching futures for the additional info and applying it to trading currency?

Clever posts in the other forum

I have been teased about that dude my whole life! Yes it's my real name, no I don't like cool-aid, no I have never been to Guyana, no I don't know what my parents were smoking when they decided to name me that!
  • #25
  • Jan 26, 2011 11:13am Jan 26, 2011 11:13am
Quoting Jimmy Jones
Thanks for the spreadsheet ScottyB. Someone mentioned you have been watching futures too long, do you trade futures? Or just watching futures for the additional info and applying it to trading currency?

Clever posts in the other forum

I have been teased about that dude my whole life! Yes it's my real name, no I don't like cool-aid, no I have never been to Guyana, no I don't know what my parents were smoking when they decided to name me that!
I was worried in the other thread that you had no clue who Jim Jones was. I couldn't resist having a little fun with it.

No problem with the spreadsheet. I hope it helps some folks understand a little more.

Futures..Yes, I look to the FX futures for data, and execute through Oanda. The central exchange, real volume info, time and sales ect. is extremely valuable if you know what to look for.

I was a little disappointed that the other thread gave up on the chart aspect of OF. There was one dude who was getting pretty close to what can be done via just a chart. It's common sense things, but you can paint a ROUGH picture of what is going on behind the chart i.e. the execution of orders. For example, it's fairly easy to see where there are lots of limit orders or depth. If the limits dry up and price pushes through them then of course there will be some stops that execute. What do you think this looks like? It's a DUH kind of answer, infact, I think I've already explained it.
  • #26
  • Jan 26, 2011 11:21am Jan 26, 2011 11:21am
Quoting eurotrash
^ Cheer up, could be worse.

http://img502.imageshack.us/img502/4781/ronaldtz.png
I'm lovin' it.
  • #27
  • Jan 26, 2011 11:22am Jan 26, 2011 11:22am
Quoting edja00
Don't forget these charts. I think they could be really helpful.

Carnegie, you said no charts, but these kind of charts are OK though, right?


I'm studying my ass off to understand it all. Will report if I find something useful.
Hi, love the discussion... where do you get these charts? I am very interested in understanding this process, and I am a visual learner.

Any help would be appreciated.

Thanks!
  • #28
  • Jan 26, 2011 12:00pm Jan 26, 2011 12:00pm
I would love to answer the question, but frankly I don't have a solid enough understanding of market structure and order flow yet. It just now occurred to me when reading your post that limit orders are probably a roadblock that have to be eaten up before price can continue against them. Before that I was not really understanding the diff between market and limit. Add in all the different types of limits (stops) and I am lost again

I am reading a couple of books Darkstar mentioned in his posts from 2006, 'TWOD' and 'Trading and Exchanges: Market Microstructure for Practitioners'.

Until I can really understand how markets work I think my answers will all be guesses...

Quoting Scotty B
I was worried in the other thread that you had no clue who Jim Jones was. I couldn't resist having a little fun with it.

No problem with the spreadsheet. I hope it helps some folks understand a little more.

Futures..Yes, I look to the FX futures for data, and execute through Oanda. The central exchange, real volume info, time and sales ect. is extremely valuable if you know what to look for.

I was a little disappointed that the other thread gave up on the chart aspect of OF. There was one dude who was getting pretty close to what can...
  • #29
  • Jan 26, 2011 12:03pm Jan 26, 2011 12:03pm
Hi Scotty,

I just sent you a PM. I'd really like to discuss more with you about tapereading in futures. I am currently learning it...watching the 6E. Just took a tapereading workshop...22 hours....as well. Would welcome any insight you can provide on this.



Anthony
  • #30
  • Jan 26, 2011 12:06pm Jan 26, 2011 12:06pm
Hi Jimmy,

I am currently reading Tradng and Exchanges. But what is TWOD that you mentioned?
  • #31
  • Jan 26, 2011 12:10pm Jan 26, 2011 12:10pm
Quoting pilotui
Hi, love the discussion... where do you get these charts? I am very interested in understanding this process, and I am a visual learner.

Any help would be appreciated.

Thanks!
Any old chart will do. Is price resistant to some level or small range? (Range generally < 15 pips?) Let's get theoretical here. Thinking in terms of orders(orderflow mindset), markets and limits, what would some really intense limit orders in some tight range look like? Even if you can't see the time and sales, would there be evidence on a chart? Once you identify this on the chart, you need to ask why those orders are there. EU is starting to "move sideways" on the chart around the 1.37 level. The market kept pecking away orders in the 3670-3690 range. The market had several goes at this level and could not break it for a whole day. So what in the world is going on? Are these in-fact new sellers all of a sudden who have all there massive buy stops above 1.37 somewhere?

You can't just look at a consolidation and assume there are mega stops there. IMHO I believe these are actually longs covering their positions given only the info on a chart, oh and a reuters story I found from the 13th:

http://www.reuters.com/article/idUSN1328567420110113

I believe that all the blind bulls are netting many of the big players out at a very nice profit. This does not mean that EU will not continue higher, but this 1.37 level will be one to watch and keep in mind. If the big guys are truly stepping aside, the wind could be a changin'.

I think the more probable stops will be to the down side where all the bulls are caught going the wrong direction especially if the pros begin squeezing them. Watch for areas where there are lots of bids, and take notice of what happens when those levels are sold through.

What I've just presented is more of a macroscopic view with fundamentals in mind, you can do similar things on tiny time frames. As I've said before, the sky is the limit with much of this. The idea is to become a market detective where you not only look for patterns, but the motives behind them.

I can't believe I'm about to post a chart. Ugh!
Attached Image (click to enlarge)
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  • #32
  • Jan 26, 2011 12:29pm Jan 26, 2011 12:29pm
Quoting Scotty B
Once you identify this on the chart, you need to ask why those orders are there. EU is starting to "move sideways" on the chart around the 1.37 level. The market kept pecking away orders in the 3670-3690 range. The market had several goes at this level and could not break it for a whole day. So what in the world is going on? Are these in-fact new sellers all of a sudden who have all there massive buy stops above 1.37 somewhere?

You can't just look at a consolidation and assume there are mega stops there. IMHO I believe these are actually longs...
It looks like this chart is from last night/this morning. IFR said there was a DNT option with the topside barrier at 1.3720. So it looks like it was an option defense. I could be wrong, though.
  • #33
  • Edited 12:50pm Jan 26, 2011 12:34pm | Edited 12:50pm
Quoting relyt
It looks like this chart is from last night/this morning. IFR said there was a DNT option with the topside barrier at 1.3720. So it looks like it was an option defense. I could be wrong, though.
Sure, I'd buy and option up there. Maybe it was Goldman's...

Just read that this supposed option was taken out. "according to traders." lol
  • #34
  • Jan 26, 2011 12:56pm Jan 26, 2011 12:56pm
Quoting Carnegie
I have noticed sometimes that on the 5/15 min chart we have spikes up in price, from nowhere.. price moves 20-25-30 pips up on one single candle (sometimes more.. but for some reason.. NEVER WITH A RETRACEMENT ) and then the move get's faded 100% and sticks around the same area it moved up from. Then it usually trades in the other direction. I.e. if it moves up and gets faded, it continues to move down.. Why is that do you think?
Hey Carnegie,

I think I understand some of this, but am still learning myself. You are describing a bar formation that usually develops into a pin bar, or head and shoulders on larger time frames.

In simple but basic terms.

Let us say that price is currently consolidating (equilibrium) around 1.00. Orders will collect above and below that price level. Eventually, someone will determine it advantageous or be forced to fill those orders.

In your example it appears that there were buy orders 20-30 pips above where price was that were sufficient enough to be filled but not sufficient enough to consume latent and other market sale orders. The market moves up to fill the demand and then drops to quickly fill the subsequent vacuum. There is a vacuum because those buy orders were filled and there are no other orders to be met except back in the 1.00 level. Or better said, there is a "vacuum" because buy orders at that level are now exorbitantly out of proportion to sales at 1.00.

I hope that does not lead you in the wrong direction.
HP
  • #35
  • Jan 26, 2011 3:07pm Jan 26, 2011 3:07pm
Quoting HipsterPipster
In your example it appears that there were buy orders 20-30 pips above where price was that were sufficient enough to be filled but not sufficient enough to consume latent and other market sale orders. The market moves up to fill the demand and then drops to quickly fill the subsequent vacuum. There is a vacuum because those buy orders were filled and there are no other orders to be met except back in the 1.00 level. Or better said, there is a "vacuum" because buy orders at that level are now exorbitantly out of proportion to sales at 1.00.

I...
Hey hipsterpipster,

I am thinking about this in another way now. You see Darkstar pointed out that his learning was thru good understanding of markets and CindyXXXX pointed out a couple of days ago the function of the market (supply and demand). What I did was go out and read allot about supply and demand to understand it.

I really think we need to learn the REAL BASICS before moving on. The way I see it; price equlibrium is when the demand and supply curve cross eachother. That's when most of orders are traded and that's the most liquidity because both sellers and buyers are satisfied.
Now when price moves up strongly, it is obviously EXCESS DEMAND, someone want's more of it so they bid it up to WHERE THERE IS EQUILIBIRUM ONCE AGAIN, where sellers WANT TO SELL.

But then why does someone bid up that strong? Why not with any retracements? And why the hell did the move then get faded? And in which situations do we know if it's a real move (I.E. backed by fundamentals) and when do we know it's a trade to fade.
OBVIOUSLY, I understand that we cant "know".. but you guys understand me. Really the question is.. what are we looking for, and in which situation? And no charts. We're out to understand THE REASONS.

Take care
  • #36
  • Jan 26, 2011 3:15pm Jan 26, 2011 3:15pm
Quoting ajt1970
Hi Jimmy,

I am currently reading Tradng and Exchanges. But what is TWOD that you mentioned?
The Way of the Dollar. I'm reading it now and frankly it's a very difficult read for me.
  • #37
  • Jan 26, 2011 4:04pm Jan 26, 2011 4:04pm
Quoting Carnegie
Hey hipsterpipster,

I am thinking about this in another way now. You see Darkstar pointed out that his learning was thru good understanding of markets and CindyXXXX pointed out a couple of days ago the function of the market (supply and demand). What I did was go out and read allot about supply and demand to understand it.

I really think we need to learn the REAL BASICS before moving on. The way I see it; price equlibrium is when the demand and supply curve cross eachother. That's when most of orders are traded and that's the most liquidity...
When people talk about supply/demand in the markets, it seems to me that most of the time it is about supply=selling, demand=buying. For our purposes here however, i think it would be more useful to view it in the context of liquidity. Supply=liquidity being offered and demand=liquidity being consumed, regardless of direction. So the REAL BASICS, may not paint the whole picture when this viewed without the element of LIQUIDITY.

Price equilibrium I believe is more about value than high liquidity. I actually think, that when we have price equilibrium, liquidity is quite low. The informed traders capable of moving the market, don't see any value in participating at the current levels. So they stay on the sidelines either waiting for new information that would indicate a change in the value of the instrument, or wait for the price to move away from the value, and enter trades towards it. It is not that buyers and sellers are satisfied with the liquidity available, it's that they have no reason to demand it.

If price equilibrium is disturbed, without any change to the value (ie fundamentals are the same), this would be a move to fade. The price was most likely pushed there in search for liquidity. Large orders would be very difficult to fill when price is at an equilibrium(because of the low liquidity), so the market is being pushed to areas of high liquidity (ie SLs outside of a range). Once the liquidity there is taken, price comes back being brought there by the traders whose orders have been filled, and other traders that noticed the price deviating from its value.



My English is very crappy and i have a hard time explaining what i mean, but i hope it is somewhat clear.
Stubbornly persistent
  • #38
  • Jan 26, 2011 4:05pm Jan 26, 2011 4:05pm
Just an update to my earlier chart (sorry). We can see there was some order disequilibrium from he move down, I am sure these two moves are linked from the order flow perspective.
Attached Image (click to enlarge)
Click to Enlarge Name: 2011-01-25_2025_CABLEDrop2.png Size: 63 KB
Kind Regards Chris
  • #39
  • Jan 26, 2011 4:06pm Jan 26, 2011 4:06pm
Yes, this entire order flow stuff is very complex.

Understanding the markets really well is indispensable to determine a lot of different conditions and to recognize the noise.

1000s of hours can help to improve the experince and how to adopt this knowledge into a useful trading approach.
But without the right tools that help filtering and monitoring other participants, that would be very hard.

Naked charts don't provide enough information.
After the fact, anybody can say or interpret: hey here was a stop hunt,look at that "spike".

To achieve that "order flow reading-mindset" a lot of time and self teaching is necessary.
Nobody will do that work for you.
  • #40
  • Jan 26, 2011 4:14pm Jan 26, 2011 4:14pm
Quoting UnnamedPlayr
Yes, this entire order flow stuff is very complex.

Understanding the markets really well is indispensable to determine a lot of different conditions and to recognize the noise.

1000s of hours can help to improve the experince and how to adopt this knowledge into a useful trading approach.
But without the right tools that help filtering and monitoring other participants, that would be very hard.

Naked charts don't provide enough information.
After the fact, anybody can say or interpret: hey here was a stop hunt,look at that "spike".

To...
If you are talking to me, then you can see I posted a chart before the spike.
Kind Regards Chris
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