Order Flow - Achieving the mindset | Page 47 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Mindset Mindset Mindset!!! 19 replies

How to flow with the order flow? 26 replies

Maintain Your Mindset, by Linda Bradford Raschke 3 replies

Order Flow - Achieving the mindset - Part 2 37 replies

A new mindset 0 replies

Attachments: Order Flow - Achieving the mindset
Exit Attachments

Order Flow - Achieving the mindset

  • #921
  • Mar 20, 2011 5:00pm Mar 20, 2011 5:00pm
Quoting redbaron1981
Monroe,

I've recently gone back to reading Darkstars post over again. They carry a lot of little nuggets and as Grkfx said this is how he learned.

One thing that I'm struggling with is finding other future events besides economic reports that can move the market. I have a few ideas as to why traders would enter the market but finding information that they would respond to and entering where you would presume they would is proving a little tricky.

Well back to Darkstars threads again maybe they'll shed some light!
How about stuff like a big M&A deal they just wrote about on Bloomberg recently...

http://www.bloomberg.com/news/2011-0...9-billion.html

stuff like this? I mean this would cause eur demand, and even if it doesn't, traders will anticipate it right? Or maybe that anticipation is already priced in?
  • #922
  • Mar 20, 2011 5:02pm Mar 20, 2011 5:02pm
Good stuff. Thanks Monroe. I'm gonna print out that article.

Awesome thread, you guys. I am totally basing my appraoch on order flow and market participants.

Oh, and I had put a world map on my wall last week in my trading "war room"....for those of you that said you did the same thing....sounds like we're all thinking alike. :-)
  • #923
  • Mar 20, 2011 5:05pm Mar 20, 2011 5:05pm
Quoting ajt1970
Good stuff. Thanks Monroe. I'm gonna print out that article.

Awesome thread, you guys. I am totally basing my appraoch on order flow and market participants.

Oh, and I had put a world map on my wall last week in my trading "war room"....for those of you that said you did the same thing....sounds like we're all thinking alike. :-)
nice.. world map... good stuff.
  • #924
  • Mar 20, 2011 5:13pm Mar 20, 2011 5:13pm
Quoting Monroe
How about stuff like a big M&A deal they just wrote about on Bloomberg recently...

http://www.bloomberg.com/news/2011-0...9-billion.html

stuff like this? I mean this would cause eur demand, and even if it doesn't, traders will anticipate it right? Or maybe that anticipation is already priced in?
Yep thats the stuff.

I've been looking at major swing highs/lows on pairs and then googling to see what caused it, but I just seem to find myself lost in trying to search through fathoms of TA shite.
  • #925
  • Mar 20, 2011 5:19pm Mar 20, 2011 5:19pm
Quoting redbaron1981
Yep thats the stuff.

I've been looking at major swing highs/lows on pairs and then googling to see what caused it, but I just seem to find myself lost in trying to search through fathoms of TA shite.
yup same here... I tried to research into it. Though I don't know if you can be sure of how something like that will actually effect the euro in it's present sate of supply and demand at the time, there seems to be a lot of factors. And how can you know if say insiders didn't already anticipate something like that last week for example, or when will the deal go down, when will the orders be placed in the market. I have no clue.

The simplest thing I can think of is looking for reversals now that it's out lol.
  • #926
  • Mar 20, 2011 5:24pm Mar 20, 2011 5:24pm
Now is about the time when Grkfx/Unnamed/Ds enters the thread and provides a little stimulus for us too work on.

As it goes this thread and most of us here are definitely progressing and I can personally say that I've learned a great deal of information into how real traders have made it.

Cheers Guys.
  • #927
  • Mar 20, 2011 5:28pm Mar 20, 2011 5:28pm
One of the problems of this thread is that there is a lot of talk, but very little information.

I don't believe that the "option barrier" talk from IFR (or any other source) is useful. But a lot of you do. Still, nobody seems to actually verify if they can be used or not.

I would have expected by now for someone to post something like this: IFR talked about 50 option barriers in the last 3 months. 20 of them were taken out, 30 were not. You know, actually quantifying them.

I did the exact same thing with some daily FOREX trade ides from two banks (one of them Saxo Bank - their Trade Commander).

Here's the balance line for the EUR/USD trades:

http://dl.dropbox.com/u/190212/ff/bank_eurusd.png

But here is the one for USD/JPY:

http://dl.dropbox.com/u/190212/ff/bank_usdjpy.png

So I realized that theirs recommendations are useless.

Why don't you organize yourself? Somebody starts logging the daily IFR option barrier talk, then one month from now you see if you can find a way to trade them profitable.

The same can be done with the other ideas: S/R stop-hunting, macro news order flow (like the recent USD/JPY events).

Because if you don't test your ideas, you are no better then medieval medicine, which believed that blood-letting is good for the organism. Then they tested this thing and found out the truth - that it's worse than not doing it.

So, anybody feeling of recording the IFR barrier talk? It would take less than 10 minutes a day.
  • #928
  • Edited 6:04pm Mar 20, 2011 5:33pm | Edited 6:04pm
Adal, sounds like a great idea... but what will this really tell you? If 40 out of 50 barriers got taken out in a said time period, In and of itself, that's not a statistic I am going to count on happening again and again. If the barriers got taken out or not isn't the only thing you have to log to quantify it, so it's not that easy.

I have to be honest, I think it's simpler to trade PA and have an understanding of orderflow and the market you are trading. This would help filter out stupid trades.

I don't want to be an economist or a quant. I just want to be a trader. DS's main concept is what I feel it's all about.
  • #929
  • Mar 20, 2011 6:48pm Mar 20, 2011 6:48pm
Quoting Adal
One of the problems of this thread is that there is a lot of talk, but very little information.

I don't believe that the "option barrier" talk from IFR (or any other source) is useful. But a lot of you do. Still, nobody seems to actually verify if they can be used or not.

I would have expected by now for someone to post something like this: IFR talked about 50 option barriers in the last 3 months. 20 of them were taken out, 30 were not. You know, actually quantifying them.

I did the exact same thing with some daily FOREX trade ides from two...
This is exactly the thing you guys need to be doing if you want to base your trades on this sort of thing. Also, what is the difference between not having the stats v.s. having them? Both will require your faith. If you have the stats, however, you will experience less doubt.

I have a really broad question for all of you.. Why are you all interested in trading?
  • #930
  • Mar 20, 2011 6:50pm Mar 20, 2011 6:50pm
Quoting Scotty B
Why are you all interested in trading?
I want to buy my freedom. Live life on my terms and go and do what I want where I want. And also help some folks along the way and give back a little.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #931
  • Mar 20, 2011 7:08pm Mar 20, 2011 7:08pm
Quoting Adal
I don't believe that the "option barrier" talk from IFR (or any other source) is useful. But a lot of you do. Still, nobody seems to actually verify if they can be used or not.
Something else to think about is do you want to be a 'technical order flow trader' or a 'fundamental order flow trader' ? Things like option barriers fall in the category of fundamental, where making a trade off a pattern or round number would be technical. This is my personal interpretation.

Of course you can combine the two. So many options, so many ways. The more I read, to more I lean towards the technical order flow. You know there will be action around a round number, you know that eventually an area of consolidation will trend.

I think each trader needs to find their little niche and work it for all it's worth. If you don't want to deal with option barriers, don't. Figure out how you want to trade and find a method that is profitable (i.e. positive expectancy) and control your risk. Now if I could just follow my own advice, I'd be rich.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #932
  • Edited Mar 21, 2011 6:36am Mar 20, 2011 7:40pm | Edited Mar 21, 2011 6:36am
Quoting redbaron1981
So these are the size of transactions we need to be aiming for to climb on the back of, as I am fairly certain that market impact could not be avoided with a transaction so large. The next thing to look out for is how an order off that size would have been made and how we could have had pre warning about it. In these two cases it seems that the market started to move on speculation alone and no actual $35.5 Billion ever hit the market. "Buy on rumor Sell...
I've been looking into this today, and though there are contradicting quotes from various sources, it appears Pru had already hedged its currency risk (using "unspecified derivatives") by the time they made the deal announcement. Also the cash payment was not due until August. Therefore it seems likely to me that any part this deal may have played in the down move on 01/03/10 was hopeful front running. There were other factors in that move however, such as a poll showing the increasingly likely prospect of a hung parliament, which was published over the weekend (March 1 was Monday). This was considered bearish for the pound because "a hung parliament would make it harder for the UK to decisively cut its large budget deficit" - and this was during the time when, I believe, the market was very focused on the eurozone and UK deficits, implementing austerity measures, etc.

On the other hand, when the deal collapsed (or was rumoured to be near collapse due to AIA's rejection of the revised bid), it's seems more feasilble that some or much of that rally may have been due to actual transactions by Pru. The hedge positions were unwound "within seven days of the AIA deal falling through". (Apparently these positions were taken from around 1.5400.) They could have been buying on the way up on 01/06/10, or afterward during the time price stayed high-ish, maybe even on the way down on Friday. The withdrawal from the deal was only official on the 2nd, so I imagine it's likely they bought back their pounds on the 1st (as presumably they would have already decided internally then) to try to avoid what front running they could (as on the 1st their withdrawal was still unconfirmed, so some potential front runners who didn't want to speculate on the outcome of the deal would not yet have entered the market). They made a profit of hundreds of millions on these hedges btw, though not enough to cover the premiums.
  • #933
  • Edited 7:56pm Mar 20, 2011 7:46pm | Edited 7:56pm
Quoting LasVahGoose
I want to buy my freedom. Live life on my terms and go and do what I want where I want. And also help some folks along the way and give back a little.

I hear you, man. You've been at this almost as long as I have, you know it's not easy, especially the obscure stop hunting elusive technical orderflow pie in the sky strategies.

I feel kind of like I've chased my tail for 2.5 years until I realized one day that the FX market belongs to those who are already free in the sense you mention freedom--financial freedom. The FX market is a tool for international trade, but also one of the worlds many investment vehicles in which people pour their money if there is a return to be made. One thing that makes FX special is the leverage that many players use. Leverage amplifies even small yields into large ones over time. This is why INVESTORS (not yelling at you bro), INVEST money (orderflow), where there is money to be made. There is no secret to this orderflow business.

Company FUNK makes some super funky crazy cool widgets that there is a hot market for. The managing directors at FUNKY TOWN are some super smart dudes, innovative and highly experienced. I'm an investor and I can funnel my money wherever I want. I hear about FUNK's new widgets about to hit the market, I also hear that FUNK pay's highly competitive dividends and they're prospect of long term growth is strong. I look at many other company's but nobody else seems to have a better deal right now, so I begin buying stock in FUNK. Owning a stock in FUNK means I will have dividend payments coming my way. Each share I accumulate will translate into a bigger individual return for me. If I believe in FUNK I'm going to keep buying it. If I start buying @ $5.00, I'll keep buying it, I think it should be worth $50.00 and I'm willing to reinvest in FUNK as my positions appreciate. Others around me will buy at $8.00 and then kindly sell to me @ $12. Others will buy at $10.00 and sell to me @ $20. I'll be buying all the way up. In a few years time, I'll be building my investment and now collecting nice payments each quarter. When we get up around the $45.00 I'll begin thinking about my personal situation. Do I need this money at this time in life? If so, I'll start selling, slowly of course. If I don't need the money right now and the company is stronger than ever, there are not many other better investments, I'm gonna LET IT RIDE.

If something happens to the company or there is a situation developing that makes it highly likely that FUNK will lower it's dividends to a point where other investments give me a better deal, I'll begin selling. If you saw a chart at this point, you'd think it looks a lot like a forex pair where the carry traders begin to unwind their trades. If nothing has changed with the company and the price is near $50, I might consider the "technicals." There is a good chance that some of the traders who have traded all the way to $50 are going to liquidate, so I enter bids all the way down to $44, I am taking the seats from those who value something else more than holding their shares any longer. If the company is really growing, FUNK could likely be @ $75, a few years from now, despite this, traders will liquidate (sell their holdings) for all sorts of personal reasons to other traders who'd like to participate in Funky Town's profits.

The concept of orderflow trading finds it's best footing on the bedrock of investing 101. Money flows to vehicles that offer a decent return. That's all I got and I'm keeping it that dirt simple. If forex can't offer investors decent returns they won't participate. If you want to trade forex, think like an investor and find out what they are/will be doing. What makes sense and what doesn't?

I didn't necessarily aim all of this rhetoric at you, Goose, I just used your post as the springboard.
  • #934
  • Edited 8:03pm Mar 20, 2011 7:52pm | Edited 8:03pm
I don't use IFR because of the lack of important information.

To play the levels i mainly focus on:

how many banks are involved in certain strikes,which exact banks,expiration and who does offer options quite above or below that levels.

Then i get a clue of potential scenarios in addition to other order flow information.
  • #935
  • Mar 20, 2011 8:02pm Mar 20, 2011 8:02pm
  •  Skylite
  • | Joined Feb 2011 | Status: What the eyes see the mind believes | 5 Posts
All those interested in order flow generated from barrier options defense plays may find this extract from Carol Olsers paper on extreme returns interesting. She analysed order data from RBS around 2000:

"Note that many of the largest orders, which contribute disproportionately to order size
kurtosis, were placed by the bank’s exotic options desk. It seems likely that these orders are
intended as dynamic hedges for barrier options (options that either disappear or appear when the
exchange rate crosses a particular level). To dynamically hedge an up-and-out call option (which
disappears if the exchange rate rises above a certain level), for example, one must first open a
short position in the underlying asset and then repurchase the full amount of the hedge when the
exchange rate crosses the knock-out price. This contrasts with the small purchases and sales
required to dynamically hedge standard options. The importance of barrier options to order flow
and exchange-rate dynamics is widely familiar to market participants, among whom the location
and magnitude of barrier options is a daily source of discussion."
  • #936
  • Mar 20, 2011 8:24pm Mar 20, 2011 8:24pm
Quoting UnnamedPlayr
I don't use IFR because of the lack of important information.

To play the levels i mainly focus on:

how many banks are involved in certain strikes,which exact banks,expiration and who does offer options quite above or below that levels.

Then i get a clue of potential scenarios in addition to other order flow information.
Where do you get this kind of information?
  • #937
  • Mar 20, 2011 8:54pm Mar 20, 2011 8:54pm
Quoting nasir.khan
People do make money trading S/R even without having a clue why does it works and are doing it for years successfully and also have taught others how to do it. U cant really call them noobs.



well u covered everyone.
.
forgot u,ill add u to the list
  • #938
  • Mar 20, 2011 9:00pm Mar 20, 2011 9:00pm
Quoting redbaron1981
Hey Scott,

I don't really agree with your last post for the following reasons. First of all I rephrased this from a post that Darkstar had written. Here is the original.

[color=black][font=Verdana]"Brokers don't hunt "your" stops. Contrary to popular belief, your just not that important. What they hunt are "concentrations" of stops.

Say you have a nice clean up trend line. Technical trader lore says that if that trend line gets pierced, the trend is reversing so you should put your stop just the other side of it. Well guess what....
u forgot another one,(volume) accumulation distribution
those are very important to be looked at

btw,about the ta,i wasnt talking about the chart,i was talking about fibonnacis in hunting,
ye i look at candlesticks, and ma;s trednlines ,thats ta,but ta is not like a sepate thing,
fundy,ta,experience,marketmantality,all those are what ds calls a mindset

or in the simple terms,just a way of thinking
  • #939
  • Mar 20, 2011 9:27pm Mar 20, 2011 9:27pm
Nervousone,

there are ways to get to the information if you know how banks operate in the OTC market.
  • #940
  • Mar 20, 2011 10:06pm Mar 20, 2011 10:06pm
p3 good stuff
http://www.cairns.qld.gov.au/__data/...gTrapGuide.pdf

about stop hunting pigs
0 traders viewing now