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Order Flow - Achieving the mindset

  • #101
  • Jan 31, 2011 9:34am Jan 31, 2011 9:34am
Ok now disregard the discussion about FX being dealer market etc etc. I already know this.

I came to the conclusion(with some help) that an order flow trader needs not only a good understanding of market microstructure but also market depth etc.

Now I looked at FXCM and set up a demo account, but it seems as if only the "advanced" trader terminal has market depth therefore it is only 30 days on the demo account.

So my question is, do anyone of you know about a company where it's possible to set up a demo account? The only requirement from my side is that they should have market depth. I assume I have to start looking at it to understand how it moves in practice, and not only theoretically..

Take care
  • #102
  • Jan 31, 2011 9:42am Jan 31, 2011 9:42am
In The Way of The Dollar, the guy says the following;

Quote
Banks are beginning to trade the non-dollar cross rates* directly: so is Chicago’s IMM* futures* market. And we may find over time that more good bets arise among the cross-rates* .Meanwhile the only hard data about currency dealings that exists, including some very valuable data, is to be found in the IMM, where the leading currencies are traded against the dollar.

There is also a guy named Jason Jankovsky that watches the futures market while trading in the spot market (that was my impression anyway).

So my question is, should we be looking into the retail market for data (specifically market depth), or should be we looking at one of the exchanges that trades currency futures for market depth?

I have a sneaky feeling that the data we are getting from places like FXCM may not be that great, but thats just an opinion. A seasoned veteran might be able to shed some light on this topic.
  • #103
  • Jan 31, 2011 2:56pm Jan 31, 2011 2:56pm
Quoting Jimmy Jones
In The Way of The Dollar, the guy says the following;



There is also a guy named Jason Jankovsky that watches the futures market while trading in the spot market (that was my impression anyway).

So my question is, should we be looking into the retail market for data (specifically market depth), or should be we looking at one of the exchanges that trades currency futures for market depth?

I have a sneaky feeling that the data we are getting from places like FXCM may not be that great, but thats just an opinion. A seasoned veteran might...
malcolm looks at futures data and trades spot,hes a fulltime trader,
  • #104
  • Feb 2, 2011 4:36pm Feb 2, 2011 4:36pm
It is suddenly very quiet in this thread !

Are we giving up??

I surely hope NOT !!
  • #105
  • Feb 2, 2011 4:40pm Feb 2, 2011 4:40pm
Quoting edja00
It is suddenly very quiet in this thread !

Are we giving up??

I surely hope NOT !!
It's the fate of every Order Flow thread.
.
  • #106
  • Feb 2, 2011 4:54pm Feb 2, 2011 4:54pm
Quoting nasir.khan
It's the fate of every Order Flow thread.
.
The topic is so complicated and involves gathering information from so many places that there will probably never be thread that adequately explains all it's aspects. With all the microstructure jargon involved, it's hard for the average trader to really jump in and understand everything anyways.

It's not like the thread disappears though. It will fire right back up when someone brings another tidbit that is a good catalyst for further conversation.
  • #107
  • Feb 2, 2011 5:21pm Feb 2, 2011 5:21pm
lol I think some of the posters in this thread are as busy as ever
  • #108
  • Feb 2, 2011 7:29pm Feb 2, 2011 7:29pm
From the PM's I have been getting of late I can safely say that EmeraldEyes is on the money with regard to participants in the thread.

For those of you who aren't deep in thought, I suggest reading the CFTC/SEC report on the flash crash at :

http://www.sec.gov/news/studies/2010...nts-report.pdf

As a case study into the causes and impact of episodic volatility, it should be able to get your creative juices flowing. Pay particular close attention to everything after page 80...

Enjoy
  • #109
  • Feb 2, 2011 7:43pm Feb 2, 2011 7:43pm
Damn... Cindyxxx posted something I wanted to comment on the other day... anyone know where I can find his post about the component currencies of a cross rising or falling?

It was something about when e/j is rising and u/j is flat it means euro strength...
  • #110
  • Feb 2, 2011 8:06pm Feb 2, 2011 8:06pm
I think this is what you're talking about:

http://www.forexfactory.com/showpost...69&postcount=1
  • #111
  • Feb 2, 2011 9:01pm Feb 2, 2011 9:01pm
Quoting EmeraldEyes
lol I think some of the posters in this thread are as busy as ever
Yeah lots of reading the last week for me. A whole new world. Just not a lot to post yet about order flow itself. Its going to take some studying and thinking before I can communicate intelligently on the subject.
  • #112
  • Edited 11:10pm Feb 2, 2011 10:54pm | Edited 11:10pm
Quoting Darkstar
Damn... Cindyxxx posted something I wanted to comment on the other day... anyone know where I can find his post about the component currencies of a cross rising or falling?

It was something about when e/j is rising and u/j is flat it means euro strength...
Hey DS

I deleted it but will try and repeat what I said...

Basically I was just suggesting that correlation may play an informative role in interpreting currency supply and demand/ order types

When the EUR/USD breaks a trend line or other S/R and then drops 200 pips people might be quick to assume a bunch of sell stops just hot hit. But how do you know it wasn't USD buy stops?

For example if the EUR/USD rallies and the EUR/JPY rallies but the USD/JPY consolidates and the GBP/USD cosolidates, we can conclude from this observation that the rallie in the EUR/USD was due to EURO BUYING as opposed to USD weakness. Of course the EURO rallied becasue it strengthened against the USD but the information we can gather is that people BOUGHT EUROS.

So with that said using the same logic in "stop hunting" or whatever you want to call it, is it possible to make more informed decisions about which orders are being used? Is it possible to dertermine what the big players are doing and where? Is it possible to gauge Supply and demand factors? IS it possible to eliminate the word "pair", to literally improve your chances 50%? I'm not sure but if you think about it long enough it adds another dimension to it but a very confusing one at that.

(There you go I think that's similar to the first one)
Time hides Nothing
  • #113
  • Feb 3, 2011 12:54am Feb 3, 2011 12:54am
Thinking along similar lines, what say someone Sells USD and Buys Euro's and we are waiting to see their exit, but instead to exit they don't reverse, but Sell their Euro's for Yen, then Sell Yen for USD and then they are out of the market, that's I suspect is gonna be even harder to detect.

Maybe that's why people turn away from forex and go to things like stocks where you are not contending with a "Pair"

.
perception is reality
  • #114
  • Feb 3, 2011 2:37am Feb 3, 2011 2:37am
Futures depth also work.

Almost all retail or ECN broker Level II data are distorted and don't show real raw data from all major and smaller institutions.
The most accurate and reliable order book i've seen came from Integral.

http://img713.imageshack.us/img713/9...egraldepth.png
  • #115
  • Feb 3, 2011 4:16am Feb 3, 2011 4:16am
Quoting UnnamedPlayr
Futures depth also work.

Almost all retail or ECN broker Level II data are distorted and don't show real raw data from all major and smaller institutions.
The most accurate and reliable order book i've seen came from Integral.
Which brokers use Integral ?
He was looking for the card so high and wild hed never need to deal another
  • #116
  • Feb 3, 2011 4:30am Feb 3, 2011 4:30am
Quoting UnnamedPlayr
Futures depth also work.

Almost all retail or ECN broker Level II data are distorted and don't show real raw data from all major and smaller institutions.
The most accurate and reliable order book i've seen came from Integral.
HotspotFXi is even better than Integral. But much harder to get on.
  • #117
  • Feb 3, 2011 5:21am Feb 3, 2011 5:21am
Quoting deanz
Thinking along similar lines, what say someone Sells USD and Buys Euro's and we are waiting to see their exit, but instead to exit they don't reverse, but Sell their Euro's for Yen, then Sell Yen for USD and then they are out of the market, that's I suspect is gonna be even harder to detect.

Maybe that's why people turn away from forex and go to things like stocks where you are not contending with a "Pair"

.
Maybe this can sustantiate your idea.

(Using the Crosses from “Beat the Forex Dealer” by Agustin Silvani)

Even if not trading them directly, cross movements should never be overlooked, since the movements of the crosses can often hide the footsteps of large players choosing to position themselves in a stealthy manner rather than through one of the majors. If someone is looking to load lip on euros, for example, they may try to fly under the radar by buying euros against Swiss francs, sterling, yen. or other more obscure crosses. These are bets on broad-based euro strength (for fundamental reasons) spread out over a number of currencies (a basket) rather than taking a direct dollar negative position.

The crosses can also prove incredibly important to swing or momentum traders, since they can be used as forecasting tools and show you which currency is leading the pack. Traders that overlook the importance of the crosses are often stuck with positions that do not move, while the rest of the market takes off ill their desired direction.
….

If the dollar is rallying against everything, but cable does not seem to be moving much, then one look at its crosses will show you where the selling pressure is being absorbed. Maybe sterling is rallying strongly against the euro or against the yen: in the end it does not matter. All that matters is that your cable short is barely in the black, and probably poised to bounce back strongly when the demand for dollars is exhausted. With limited funds you always want to pick the pair that will move the most, but how exactly do you come to a reasonable conclusion? That is where the crosses come in.

Cross movements either work to amplify the move or minimize the effects. If the euro is dropping against the dollar, for example, but rising against the pound, the net effect will be to limit the size of the EURUSD fall. When this cross is rising, it is telling us that the euro is outperforming the pound. and vice versa.

Best Pip Wishes!
  • #118
  • Feb 3, 2011 8:07am Feb 3, 2011 8:07am
@ dr_who and Adal

Regarding brokers: visit their site for further information.

For what i've been seen on hotspot or a prime broker through EBS they were not so convincing and liquidity wasn't much better.

Anyway.
Every prof. FX venue is better than retail order books.
  • #119
  • Feb 3, 2011 8:24am Feb 3, 2011 8:24am
Quoting UnnamedPlayr
@ dr_who and Adal

Regarding brokers: visit their site for further information.

For what i've been seen on hotspot or a prime broker through EBS they were not so convincing and liquidity wasn't much better.

Anyway.
Every prof. FX venue is better than retail order books.
Indeed, these brokers are light years ahead of retail ones. Latencies measured in milliseconds, full access to the order book - you can see EACH AND EVERY order come in, execute, or be canceled.

BTW, I created a desktop widget which shows realtime Integral quotes: http://www.forexfactory.com/showthread.php?t=244297

Even if they call this service TrueFX, it is owned by Integral as can be seen on their page - http://www.truefx.com
  • #120
  • Feb 3, 2011 9:33am Feb 3, 2011 9:33am
The quotes from that TrueFX site lag and don't match with the professional terminal prices.
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