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  • #1,021
  • Mar 23, 2011 12:36pm Mar 23, 2011 12:36pm
In case anyone here isn't familiar with fixes. This comes from Jamie Coleman:

Everyone talks about the 4 PM London fix for good reason. This is the time of day where large flows collide in the FX market. I have seen close to one billion EUR transacted in a three pip range at this time of day. The liquidity available can be endless, until it is you with the fix order .

In the NY afternoon fixes are done on every hour. The 4 PM NY fix, when liquidity can really be an issue, is ripe for some good moves should the fix order be of any size. A 200 million GBP fix at 4 PM NY time can move the pair 30 or 40 points. It pays the executing bank to move the market to fix the rate at an extreme on the hour. So when you see these moves in the afternoon and wonder why this is happening, now you know.
  • #1,022
  • Mar 23, 2011 12:53pm Mar 23, 2011 12:53pm
Quoting Magic Trader
In case anyone here isn't familiar with fixes. This comes from Jamie Coleman:

Everyone talks about the 4 PM London fix for good reason....
And continuing....

The bank is obligated to fill the client where the market is “fixed” at the hour. The clients want it that way. It is hard enough making money as an interbank trader on these fixes. Do not know how a retail trader could profit unless you have a friend at the bank with the order.

So it doesn't help us much...
  • #1,023
  • Mar 23, 2011 4:13pm Mar 23, 2011 4:13pm
Hey Guys,

Well my plan over Portugal worked out a treat. I was a little hesitant on my entry but manged to get in around 40 pips of yesterdays high.

What I did notice is that it looked like at that point the market had already started to price this news in, and so when the actual results of the votes were released price did not have to make much of a correction to account for the discount.

Anyway apart from my entry being a little delayed I only suffered around 14 pips against me and have now took partial at around 130+/- so overall a good trade.

I'm now going to start looking at the next events coming up in the Euro looks like a bailout may be on the cards and it will be interesting how heavily discounted the market is at the moment. Definitely going to left the rest of this trade run.

Back to studying.

All the best,

James.
  • #1,024
  • Mar 24, 2011 8:56am Mar 24, 2011 8:56am
Quoting beachallstar
Hey 2+2=4ex, read any good books where Soros really explains his approach analytically?

I know he trades using market structure diagrams, but I have never come across an explanation of it all from him on a technical level.
I have read one book by Soros - the Alchemy of Finance - which is the book I suspect most people with a passing interest in him will have read. He begins by telling of the theoretical framework he uses for judging the implications of economic factors (Interest rates, Exchange rates, Trade in/out etc) on each other and other things, which by his own admission breaks down easy enough. He also speaks about his concept of Reflexivity and the effects of humdrum versus historic events on equilibrium; all of this seems to be the bedrock of his outlook. Like so many, Sorros voices his unease with the idea of equilibrium as prescribed by Ricardian economics (Modern economics).

If you're looking for secrets and quick fixes then Alchemy of Finance is going to be just as useless as everything else on the market. What Sorros did well was to portray his philosophy toward historical change and market change. His insights are sweeping and of little direct use, but without a doubt good to make your own just in the off-chance that they help illuminate a future situation.

The latter part of his book records periods of his trading and the rational for said trading. I have to say that I felt, at times, as if he wasn't sure why he was doing what he was. I also felt a little lost because I knew little about American history and therefore was unable to fill in the gaps where his explanation of events lacked.

When it comes to trading, or becoming free thinking and less ignorant about any subject, reading is always a good thing. Sorros Book filled in gaps, revealed new ones and gave me plenty to think about... a good buy.

Hope this helps.
Living the adventure in my head.
  • #1,025
  • Mar 24, 2011 9:05am Mar 24, 2011 9:05am
Soros made most of his money from subtle insider trading. Well, when I say subtle, sometimes it wasn't so subtle and he was fined a few million bucks for insider trading. But he very cleverly made sure he had great contacts where it mattered and used the information from these very influential people. No matter how he tried to dress up his trading philosphy he was a failed philospher like Ron Hubbard was a failed scientist. On the other hand he is obviously great at making money......
He was looking for the card so high and wild hed never need to deal another
  • #1,026
  • Mar 24, 2011 9:17am Mar 24, 2011 9:17am
Quoting dr_who
Soros made most of his money from subtle insider trading. Well, when I say subtle, sometimes it wasn't so subtle and he was fined a few million bucks for insider trading. But he very cleverly made sure he had great contacts where it mattered and used the information from these very influential people. No matter how he tried to dress up his trading philosphy he was a failed philospher like Ron Hubbard was a failed scientist. On the other hand he is obviously great at making money......
There are practical men (who get rich) and then there are philosophers. The philosophers dedicate their time to understanding and not to personal gain; I figure that Soros failed, at least in part, because he was so concentrated on making money.

You say he was a failed Philosopher as if you came to the conclusion by your self. I'll point out to other forum members, the ones who haven't read the book, that you are only parroting what he said about his self within the book: that he had in his own eyes failed at being a philosopher.
Living the adventure in my head.
  • #1,027
  • Mar 24, 2011 11:35am Mar 24, 2011 11:35am
Quoting Leonlorenzo
There are practical men (who get rich) and then there are philosophers. The philosophers dedicate their time to understanding and not to personal gain; I figure that Soros failed, at least in part, because he was so concentrated on making money.

You say he was a failed Philosopher as if you came to the conclusion by your self. I'll point out to other forum members, the ones who haven't read the book, that you are only parroting what he said about his self within the book: that he had in his own eyes failed at being a philosopher.
With all do respect to the Soros fans and fans against Soros, this debate has nothing to do with this orderflow thread. If anything knowledge is power in trading so lets get back on track.
I remember reading one of darkstars posts on watching the cross currencies. You can learn a lot from them. Maybe if they are not reacting like they should, maybe they are pointing to market inefficiencies that we can exploit.
  • #1,028
  • Mar 24, 2011 11:48am Mar 24, 2011 11:48am
Look at March 16 when all those yen stops were getting blown out. How was the pound reacting at that point in time. was it reacting like it should? Could you exploit this if you missed out on the yen move or position yourself for the correction. Were you positioning yourself for the influx of flow from the bank flow on the 18 March in the Japanese markets since all the news was talking about it but we didn't know exactly when it was going to happen? Or where you able to play the pound correction because it was telling, pointing, yelling at you to do so because it was there?
  • #1,029
  • Mar 24, 2011 2:16pm Mar 24, 2011 2:16pm
Quoting Louie
Look at March 16 when all those yen stops were getting blown out. How was the pound reacting at that point in time. was it reacting like it should? Could you exploit this if you missed out on the yen move or position yourself for the correction. Were you positioning yourself for the influx of flow from the bank flow on the 18 March in the Japanese markets since all the news was talking about it but we didn't know exactly when it was going to happen? Or where you able to play the pound correction because it was telling, pointing, yelling at you to...
Hey Louie, here is something to think about with the crosses...

This is from ForexLive:
http://www.forexlive.com/175638/all/...eyed-this-week


also I think watching say EU, UJ, and EJ for euro strength, or EU, GU, and EG to see which may be a better play against the dollar?

So overall I think you can watch the crosses to see which pairs the market is paying attention to perhaps, gain insight into the strong/weak currencies.
  • #1,030
  • Mar 24, 2011 2:57pm Mar 24, 2011 2:57pm
Quoting Monroe
Well I think it might not be the event itself that is what you're looking for. You're looking for a system build around orderflow, so although the event might not be the same event happening over and over, the reactions to things are never changing because it's human nature. You're looking to find inefficiencies in the market which gives you a true edge.
Maybe its time get stop being lazy and read some stuff about microstructure, cause i cant see how i can get past this hurdle without adequate knowledge of how markets work "actually".

Thanks guys,... and specially Carnegie for keeping the thread from drifting sideways.
.
  • #1,031
  • Mar 24, 2011 3:31pm Mar 24, 2011 3:31pm
Quoting Monroe
Hey Louie, here is something to think about with the crosses...

This is from ForexLive:
http://www.forexlive.com/175638/all/...eyed-this-week


also I think watching say EU, UJ, and EJ for euro strength, or EU, GU, and EG to see which may be a better play against the dollar?

So overall I think you can watch the crosses to see which pairs the market is paying attention to perhaps, gain insight into the strong/weak currencies.
And the news info helps to explain why if it is reliable. I have been watching the dollar crosses for the last year and it has helped with understanding flows and even assists with some entries and trade exits. Just keep in mind not to use it for rule base trading but money flow.
At this time it is difficult to get any useful flow info off the yen other than the world banks have it where they want it for the moment. I base this assesment off the dollar crosses and not the yen crosses.
  • #1,032
  • Mar 24, 2011 3:55pm Mar 24, 2011 3:55pm
Quoting nasir.khan
Maybe its time get stop being lazy and read some stuff about microstructure, cause i cant see how i can get past this hurdle without adequate knowledge of how markets work "actually".

Thanks guys,... and specially Carnegie for keeping the thread from drifting sideways.
.
It's actually very interesting stuff, even if you don't ever use any of it to trade, it's good to know the ins and outs of the market. Some people just like to drive a car, some people like to know every nut and bolt and how it runs. Microstructure is the nuts and bolts of the market.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,033
  • Mar 24, 2011 4:14pm Mar 24, 2011 4:14pm
Quoting LasVahGoose
It's actually very interesting stuff, even if you don't ever use any of it to trade, it's good to know the ins and outs of the market. Some people just like to drive a car, some people like to know every nut and bolt and how it runs. Microstructure is the nuts and bolts of the market.
But how could you find or know the inefficiencies of a car if you don't know how it's built and runs? How could you find a mispricing of a car if you don't know shit about cars?
  • #1,034
  • Mar 24, 2011 4:42pm Mar 24, 2011 4:42pm
Quoting Monroe
But how could you find or know the inefficiencies of a car if you don't know how it's built and runs? How could you find a mispricing of a car if you don't know shit about cars?
There are professional race car drivers that can win races and have no idea how an engine works and they don't need to know. They just drive the track (Price Action at S/R levels baby!).

I mean really, give me an example of an inefficiency? Is it a flaw in the brokers application? Something like the Oanda News flaw from way back when (I only heard about long after it was patched up, I really don't know the details). Inefficiencies of that nature are rare and get closed up in time, they don't last forever.

What is an example of a mispricing?
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,035
  • Mar 24, 2011 4:45pm Mar 24, 2011 4:45pm
Quoting LasVahGoose
There are professional race car drivers that can win races and have no idea how an engine works and they don't need to know....
Race car drivers know about cars and how engines work man I will guarantee you that... They may win a few races if the car is driving the way it should, but they better learn about cars or else they can't communicate to the pits about what is going on and eventually that will cost them.

A mispricing would be what the percieved market value and overall conditions of the market, If you see it going cheap for whatever reason, you would buy that car and sell it for more money.
  • #1,036
  • Mar 24, 2011 4:54pm Mar 24, 2011 4:54pm
And no, an inefficiency is not just a flaw in a brokers or ECN's platform.
  • #1,037
  • Mar 24, 2011 5:02pm Mar 24, 2011 5:02pm
Hey guys,

LasVahGoose,

I think I'm seeing myself in your shoes when I first started looking at this, and the reason why I was going in circles for many nights was because of those two words - inefficiency and mispricing.

When I heard inefficiency, I was more inclined to think of something along the lines of the situation where OANDA gave guaranteed News Fills, or that one Currenex Broker Darkstar used to pilfer when their books went void of orders during news time, allowing highly off-market orders to be placed.

To grfkx, they are mispricings; to DarkStar they are inefficiencies; to me they are exploitable scenarios; at the end of the day, it's all semantics. They all boil down to the same thing - they are situations where you have a fair grasp of the current happenings, and use this to give yourself awe-inspiring, low-risk entries, because you have some clue as to the underlying direction of the future orderflow which will bring your trade into profit. Without this orderflow behind you, how can price possible move to generate you a profit?

LasVahGoose, you've been at it for a while, and I know that off the top of your head, you can think of at least 3 valid reasons why price should move. Now that you have your hypothesis, go test it by observation. Rinse and repeat and you should soon have more inefficiencies that you know what to do with. Learning about micro structure in my opinion paves the pathway for the easiest ones, which have actually been mentioned quite a few times on these forums.

I've quietted down for the past few days, because there are just so many ways to skin this proverbial cat, and that the way I play orderflow may be in stark contrast to how others play orderflow. It's really something when you have an idea of how others use it to their advantage, but only when you make it yours - you find your intimate way of perceiving it, that it becomes a force to reckoned with.

It doesn't matter what basis the orderflow you're looking at has - as long as you are exploiting it such that your bottom line increases with each passing quarter then I tip my hat off to you.

Regards,
xXTrizzleXx
  • #1,038
  • Edited 5:14pm Mar 24, 2011 5:04pm | Edited 5:14pm
mispricing and inefficiency are clearly not the same thing to me, but I'd like to hear what the more experienced say about that.
  • #1,039
  • Edited 5:15pm Mar 24, 2011 5:05pm | Edited 5:15pm
Believe me, there are better inefficiencies then those. I was trading calendar spreads for 2 years. Those are very liquid, moving 3-5 ticks a day sometimes. I remember some bugs on the LIFFE exchange. You are standing BID/OFFER waiting to be filled and sometimes you get fill even 5 ticks better then the current market price. There are various alghorytms which decide when and how much lots you will get from the coming market orders. Your limit order size and que is very important in such markets but somewhere/sometimes those algothytms dont work as they should and then you exploit that error and keep your mouth shut.

Inefficencies like that are very rare but nevertheless they are still there and always will be. One year ago i was exploating a bug on one commodity market. Now its not working so well.
  • #1,040
  • Mar 24, 2011 5:16pm Mar 24, 2011 5:16pm
on a side note, Trizzle... I notice your post's are always pretty well written dude, I can appreciate that.
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