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Order Flow - Achieving the mindset

  • #61
  • Jan 27, 2011 12:27pm Jan 27, 2011 12:27pm
Quoting Carnegie
Hmm it's really looking like I am missing out on something. Look at that move on hourly at USDJPY. That has to be some kind of inefficiency...
Most probably BOJ intervention
  • #62
  • Jan 27, 2011 12:40pm Jan 27, 2011 12:40pm
Quoting Carnegie
Hmm it's really looking like I am missing out on something. Look at that move on hourly at USDJPY. That has to be some kind of inefficiency...

Surely due to the downgrading by S&P of Japan's credit rating from AA to AA- exactly at the time of the move
He was looking for the card so high and wild hed never need to deal another
  • #63
  • Jan 27, 2011 1:47pm Jan 27, 2011 1:47pm
Quoting dr_who
Surely due to the downgrading by S&P of Japan's credit rating from AA to AA- exactly at the time of the move
I coulda sworn it was because of the bullish divergence on the MACD with moving average crossover support.
Private message me for a link to my order flow website.
  • #64
  • Jan 27, 2011 2:09pm Jan 27, 2011 2:09pm
Quoting grkfx
I coulda sworn it was because of the bullish divergence on the MACD with moving average crossover support.
Now that is some funny shit... Are ya sure it wasn't because of the Awesome Oscillator????
  • #65
  • Jan 27, 2011 2:11pm Jan 27, 2011 2:11pm
Quoting grkfx
I coulda sworn it was because of the bullish divergence on the MACD with moving average crossover support.
What the hell are you talking about? MAs are bullshit, it was all because of RSI being in oversold/overbought zone and Parabolic SAR changing color

What parameters do you use? (lol this is the most asked question in forexfactory, just after the top one "what's the best way to make x pips with 0 risk?")
  • #66
  • Jan 27, 2011 5:50pm Jan 27, 2011 5:50pm
Quoting Carnegie
Hmm hipster could you explain this a little bit more. BTW. Are limit orders "latent" as darkstar explained them in the other thread?
Weren't they fundamentals?
As I understand it, they are pending orders (as in limit orders not yet filled). Keep in mind that limit orders can show up on books but market orders are not visible until they are actually filled. Limit orders are basically orders that will only occur when the limitations of the order have been met, such as a price level achieved.

Market participants create limit orders based on a multitude of motivations, primarily from what they believe about the market and their trading needs. If they use fundamentals as their reason for market participation, then I guess we could call them fundamental. However, I don't believe it matters too much and I have no idea how one would actually measure what orders were fundamentally motivated. Make sense?

Latent by Merriam Webster: present and capable of emerging or developing but not now visible, obvious, active...

I would not be confused with the "not now visible" part because I believe we are referring to orders not yet activated or filled but that are visible to those who will execute them per terms.
  • #67
  • Jan 28, 2011 1:58am Jan 28, 2011 1:58am
Quoting HipsterPipster
As I understand it, they are pending orders (as in limit orders not yet filled)....
They are not pending orders, they are a representation of the supply/demand curve.
Kind Regards Chris
  • #68
  • Jan 28, 2011 8:56am Jan 28, 2011 8:56am
Quoting chriskins
They are not pending orders, they are a representation of the supply/demand curve.
Fair enough, Carnegie scrap my former post.

The distribution is of the following demand categories.

MM- I assume Market to Market
Pending- Currently filled orders most likely from participants paying a premium in the form of spread but not yet reflected in price. Not sure on this definition.
Latent- Demand not yet satisfied or definitively known that could occur from uninformed or undecided future participants.
Tech- Limit Orders, known market options for other traders.
  • #69
  • Jan 28, 2011 9:24am Jan 28, 2011 9:24am
Quoting HipsterPipster
Fair enough, Carnegie scrap my former post.

The distribution is of the following demand categories.

MM- I assume Market to Market
Pending- Currently filled orders most likely from participants paying a premium in the form of spread but not yet reflected in price....

It was all explained by DS in the previous thread.
MM - market maker
Pending - limit orders in the book
Latent - additional liquidity that will be available should the price get to the level
Tech - limit orders by tech traders, they are not necessarily in the book, they could be on the traders platforms.

All together they represent liquidity for market orders.
  • #70
  • Jan 28, 2011 9:28am Jan 28, 2011 9:28am
Quoting HipsterPipster
Fair enough, Carnegie scrap my former post.

The distribution is of the following demand categories.

MM- I assume Market to Market
Pending- Currently filled orders most likely from participants paying a premium in the form of spread but not yet reflected in price....
I think this is what is meant but maybe darkstar can clear it up.

MM = Market Makers.
Pending = Limit/Stop orders
Latent = Demand/Supply Curve, i.e. if price suddenly dropped there would be demand order flow because price is lower that its perceived value (think of a sale). Thats the reason those orders get more voluminous as they get further away from price (on the chart).
Tech: Technical traders i.e. break outs, pin bars orders can be stop or limit.

Chris
Kind Regards Chris
  • #71
  • Jan 28, 2011 9:44am Jan 28, 2011 9:44am
Thanks Seagreen and Chriskins. I think we are all pretty close.
  • #72
  • Jan 28, 2011 10:26am Jan 28, 2011 10:26am
Quoting HipsterPipster
Thanks Seagreen and Chriskins. I think we are all pretty close.
No problem, the only thing chriskins got wrong is that there are no stop orders in this curve.
  • #73
  • Jan 28, 2011 10:34am Jan 28, 2011 10:34am
Quoting seagreen
No problem, the only thing chriskins got wrong is that there are no stop orders in this curve.
Hmm, not even buy or sell stops? If I am not mistaken, they would be considered limit orders.
  • #74
  • Jan 28, 2011 10:53am Jan 28, 2011 10:53am
Quoting seagreen
No problem, the only thing chriskins got wrong is that there are no stop orders in this curve.
Sorry I must have missed that, the problem is stop orders do effect the market in reality (they consume liquidity when hit) so if the model doesn't cater for them then its flawed.
Kind Regards Chris
  • #75
  • Jan 28, 2011 10:55am Jan 28, 2011 10:55am
Quoting HipsterPipster
Hmm, not even buy or sell stops? If I am not mistaken, they would be considered limit orders.
Buy and Sell stops are market orders once they are hit, so they are not limit orders, you might get a worse price than you specify.
Kind Regards Chris
  • #76
  • Jan 28, 2011 11:06am Jan 28, 2011 11:06am
Quoting HipsterPipster
Hmm, not even buy or sell stops? If I am not mistaken, they would be considered limit orders.
Stop orders consume liquidity, limits provide it. The curve represents liquidity, so there are no stops here. Sometimes stops are called limits and this brings confusion.
  • #77
  • Jan 28, 2011 11:19am Jan 28, 2011 11:19am
Quoting chriskins
Sorry I must have missed that, the problem is stop orders do effect the market in reality (they consume liquidity when hit) so if the model doesn't cater for them then its flawed.
It is not flawed, it only represents liquidity supply. Stops represent demand for liquidity and in this model they could be a part of the force making the shift.
To make it simple just keep in mind that everything to the left from the current price is sell orders, everything to the right is buy.
  • #78
  • Jan 28, 2011 11:30am Jan 28, 2011 11:30am
Any ideas to locating thin liquidity? As DS said vacuum appears only for a short period of time and cannot be exploited by itself. We can make a guess about concentrations of liquidity and mark them on chart. Then the empty areas would be areas of thin liquidity but I doubt this is the way.
  • #79
  • Jan 28, 2011 11:33am Jan 28, 2011 11:33am
Quoting chriskins
Buy and Sell stops are market orders once they are hit, so they are not limit orders, you might get a worse price than you specify.
Hmm that is actually very intersting. I have always wondered why stop-loss orders and stop orders become market orders when triggered. Wouldn't it be better if they were limit orders?
See limit orders is the exact price, but stops are market orders and therefore they can be much below/above what price you wanted to get out at.

Thanks
  • #80
  • Jan 28, 2011 11:48am Jan 28, 2011 11:48am
MM = Market Makers - often show heavy size but you rarely can trade it because they constantly ajust and move their liquidity.

Pending = right at the moment visible liquidity on the depth and also constantly changing.

Latent = passive hidden liquidity that enters the price ladders when prices become attractive. Also dynamic. 2.nd option: entering active.

Tech: mostly value traders when looking at aggregated liquidity distribution i.e HVN

To watch thin liquidity or that "vacuum" how you guys call it between spread and prices, on a chart you can't directly see it.
For that kind special data is needed.
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