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Order Flow - Achieving the mindset

  • #1,181
  • Apr 2, 2011 7:56am Apr 2, 2011 7:56am
Quoting CindyXXXX
Good luck dude/ knock em the fk out!

I gotta get off the mic here but it's the most boring Saturday night I've had in a while and I'm home alone on the forum so what can I say...

Just wondering, I know from reading a few of DS's posts that he personally specialized in the USD/JPY (still? I'm not sure)
I remember a post of DS where he suggests to concentrate on a trio of pairs (ea: EURUSD, USDJPY and EURJPY), to understand how they correlate not only graphically (with charts), but foundamentally and economically.

I think that we don't have to specialize on one or 2 pair if we don't want, but it might make it easier to understand what to look for. It mihgt be too confusing to watch to 15-20 pairs at the same time. But then, what do I know?

Here's the post.

=)
  • #1,182
  • Apr 2, 2011 10:22am Apr 2, 2011 10:22am
Quoting Carnegie
What up guys?

From Monday I will be trading live on my OANDA account. Just want to feel the psychology and all you know.. Darkstar empathizes allot about it.

What I will be trading is stop hunts and inefficiencies.
Wish me luck (I really hope I blow up the account.. in all seriousness, more to learn )

Take care lads and have a great weekend! I'm preparing for battle!
The dirty little secret in trading is: The market gives you what you ask for, Consider your account blown, since that is your intention.. Now if you said you were going to rape the market and take what you want or I'm going to make perfect trades every time (or similar concepts), then I'd say your account might survive a little longer.

Not trying to be negative, but we are talking about mindset, although this would be considered a psychological mindset, which by the way I'd argue is even more important than the orderflow mindset. See how you've set your mind? Something to think about.

I do wish you the best of luck, honestly. Many pips! Live accounts are quite the ride.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,183
  • Apr 2, 2011 10:45am Apr 2, 2011 10:45am
Quoting CindyXXXX
GRK do you specialize in some specific pair?
I specialize in foreign exchange order flow, the money flow between nations, global macro of currency (to the extent that it affects the markets).

I always ask myself. Where is the money flowing? Why is the money flowing? What expectations are attached to this money? What are the pain tolerance points of this money? What will cause money(order flow) to go in and out? Where is the money going to flow in the future?

I focus mostly on the liquid currency pairs, with lower spreads. So I would generally prioritize analyzing EUR/USD as opposed to some exotic like GBP/NZD. But eventually you shouldn't limit yourself. Because sometimes huge moves can occur in those less liquid pairs and result in some nice moves. Take EUR/NZD for example it posted a 2,500 pip move within 10 weeks.

In the beginning it can be time consuming to do many different currency pairs. But once you have the order flow generators for each pair, then the time spent goes drastically down. You don't need to spend 12 hours per day order flow analyzing a single currency pair. If you are doing that consistently day after day for just a single currency, then probably you are focusing too much of your efforts on the things that do not generate order flow, and are useless. Although it takes time and experience to know what to look for.

I generally keep a running tally in my head of what the fundamental value of each currency pair should be based on what information is out there. Now in the end it doesn't matter what I believe the value is, but what the people who are going to move the market believe the fundamental value is. So you need to harmonize yourself with what the people going to generate order flow believe the fundamental value of a currency pair is. You may not be able to get a price to a pip, but sometimes a general area can do just fine.

I keep a running tally of that fundamental value and if price deviates from that, then there is a potential trade setup, not always, but a potential trade setup.
Private message me for a link to my order flow website.
  • #1,184
  • Apr 2, 2011 4:45pm Apr 2, 2011 4:45pm
Quoting grkfx
.......Now in the end it doesn't matter what I believe the value is, but what the people who are going to move the market believe the fundamental value is....
Big words, "nice" concepts ....

Now why don't we cut to the chase and give a real example of a order flow mindset, no not a specific trade or an exact price, just what is your perceived fundamental value right now that the market is closed on the eur/usd and "what was the people who are going to move the market believe the fundamental value is" before the week closed.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #1,185
  • Apr 2, 2011 5:50pm Apr 2, 2011 5:50pm
Quoting grkfx
I specialize in foreign exchange order flow, the money flow between nations, global macro of currency (to the extent that it affects the markets).

I always ask myself....
Just remember, trading was never intended to be a moral or pious practice, value in terms of price is a joke. Traders don't trade to make sure the value is correct, they trade where there is money to be made.
  • #1,186
  • Apr 2, 2011 7:39pm Apr 2, 2011 7:39pm
Quoting Scotty B
Just remember, trading was never intended to be a moral or pious practice, value in terms of price is a joke. Traders don't trade to make sure the value is correct, they trade where there is money to be made.
If I conclude that a change in conditions will result in the price increasing from 1.30 up to 1.40 - not exactly, but that is what I judge the importance of the change in conditions to warrant - then has the 'value' increased or have I decided there is 'money to be made' by going long between those figures?

It's just words, both you and Grk are thinking exactly the same thing.

PS. I prefer for the sake of clarity your own wording, though.
Living the adventure in my head.
  • #1,187
  • Apr 2, 2011 7:41pm Apr 2, 2011 7:41pm
Quoting Scotty B
Just remember, trading was never intended to be a moral or pious practice, value in terms of price is a joke. Traders don't trade to make sure the value is correct, they trade where there is money to be made.
Inserted Video
  • #1,188
  • Apr 2, 2011 8:18pm Apr 2, 2011 8:18pm
Quoting Leonlorenzo
If I conclude that a change in conditions will result in the price increasing from 1.30 up to 1.40 - not exactly, but that is what I judge the importance of the change in conditions to warrant - then has the 'value' increased or have I decided there is 'money to be made' by going long between those figures?

It's just words, both you and Grk are thinking exactly the same thing.

PS. I prefer for the sake of clarity your own wording, though.
I suppose it could have increased. But 1.4 does not represent true value. It just means the market is going to likely take advantage of incentives up to that point. As the price increases, other incentives take the forefront, especially when lots of people are sitting in profit. I would rather say the market would be valuing the instrument, instead of valuating it up to 1.40. Maybe at 1.40 the market still values the incentives and the orders continue coming in. Maybe "conditions" change and the market now values the opposite trade, maybe something has developed that brings risk or question to the value. This is why I'm a huge gold bear right now. The value (hysteria buying) has really runs it's course and the fundamentals are telling a whole different story. It's very possible that in a years time that you'll be able to make money by holding dollars again. Since the Dollar is the safe haven, and is still the safe haven, why not make some interest? Fundamentally, gold buying is going to come to a halt. I can't wait till it does. Just saying.
  • #1,189
  • Apr 2, 2011 9:50pm Apr 2, 2011 9:50pm
Quoting Scotty B
This is why I'm a huge gold bear right now. The value (hysteria buying) has really runs it's course and the fundamentals are telling a whole different story. It's very possible that in a years time that you'll be able to make money by holding dollars again. Since the Dollar is the safe haven, and is still the safe haven, why not make some interest? Fundamentally, gold buying is going to come to a halt. I can't wait till it does. Just saying.
Want to short gold at these levels? I will gladly take the other side and go long. My sense tells me the fundamental value is a bit higher than current levels
Private message me for a link to my order flow website.
  • #1,190
  • Apr 2, 2011 10:04pm Apr 2, 2011 10:04pm
Quoting grkfx
Want to short gold at these levels? I will gladly take the other side and go long. My sense tells me the fundamental value is a bit higher than current levels
I'm a Gold bull, but my take is that the Gold market is going to setup a bear trap here soon. Bears will short and we'll see a fairly good sized correction, then BOOM! To the Moon! Gold $2400 minimum if not $6000.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,191
  • Apr 2, 2011 10:22pm Apr 2, 2011 10:22pm
http://yudkowsky.net/
Attached File(s)
File Type: pdf bluffing.pdf   629 KB | 1,178 downloads
File Type: pdf OnMarketMakerFunctions.pdf   83 KB | 669 downloads
  • #1,192
  • Apr 2, 2011 11:05pm Apr 2, 2011 11:05pm
Quoting grkfx
Want to short gold at these levels? I will gladly take the other side and go long. My sense tells me the fundamental value is a bit higher than current levels
okay
  • #1,193
  • Apr 2, 2011 11:10pm Apr 2, 2011 11:10pm
Quoting Scotty B
okay
This older chart may make a case for your bubble theory. Do you have the resources to make a similar chart?

If anyone knows to how to get the historical data and make a chart like this, please let me know. I'm actually curious to see how the movements have matched up, to date. Which looks like we are near a top and my prediction of a bear trap coming maybe in the cards as well, then a bull trap. Haha! Prediction? LOL. More like if the movements match up closely.

On the topic of order flow, how closely does historical movements match future movements? I would guess they match up more often then not since fear and greed still drive markets.

Isn't market analysis just fun fun fun!


.
Attached Image
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,194
  • Apr 3, 2011 12:37am Apr 3, 2011 12:37am
Quoting LasVahGoose
This older chart may make a case for your bubble theory. Do you have the resources to make a similar chart?

If anyone knows to how to get the historical data and make a chart like this, please let me know.


.

Hell yeah me too...
Time hides Nothing
  • #1,195
  • Edited 1:18pm Apr 3, 2011 1:07pm | Edited 1:18pm
Quoting Scotty B
I suppose it could have increased. But 1.4 does not represent true value. It just means the market is going to likely take advantage of incentives up to that point. As the price increases, other incentives take the forefront, especially when lots of people are sitting in profit. I would rather say the market would be valuing the instrument, instead of valuating it up to 1.40. Maybe at 1.40 the market still values the incentives and the orders continue coming in. Maybe "conditions" change and the market now values the opposite trade, maybe something...
I was just showing that the disagreement was down to semantics by giving a static example and showing how it could be thought about. I agree that if we animate the example - start talking about what happens on the way from 1.30 to 1.40 - then there are any number of things that could change our valuations. Of course valuation and revaluation happens constantly.

This discussion hinges on whether you consider the act of valuation to involve either (a) only the fundamental information, or (b) fundamental information about the instrument AS WELL as the current shape of the participants in that market.

I think you're trying to say that 'valuation' isn't enough on it's own (using definition 'a'). People might think that actual value should be higher, but if they already have a considerable paper profit they might decide to take it out; there may be desire to buy but not enough liquidity to do so without running up the price; any number of things could dissuade a person from trading according to their type 'a' valuation. In essence, a valuation - using definition 'a' - is only in the traders head.

However, a valuation of type 'b' takes in to consideration traders current open positions, the constraints the traders face and therefore what may shape their future actions - as well as the fundamentals - and is a more dynamic way of ascertaining value.

Maybe Grk's personal definition of value encompasses 'b'. That would mean you're both in agreement. There are so many ways to misunderstand one another when talking about this stuff.

I'll apologise in advance, this might be very difficult to read. I know it makes complete sense to me, but I'm the author.
Living the adventure in my head.
  • #1,196
  • Apr 4, 2011 4:04am Apr 4, 2011 4:04am
Hey y'all

Now I understand the "psychological issues" you guys talk about.
Took a trade right at the bottom and it moved up and looked awesome.. then it fluctuated down and up and down and.. yeah you've already been there; so I got stressed out and closed the trade right at where my average position was.. so it was a breakeven trade. But man at some point it was ITM for real.

Then I fucked it all up by taking a bullshit trade just to compensate it. And that one just fucked everything up.. Need to take a walk so, talk to you guys later. BTW, anyone know where Dark is? I kinda need him right now, allot of shit going thru my mind.

Take care
  • #1,197
  • Apr 4, 2011 4:25am Apr 4, 2011 4:25am
Quoting Carnegie
Hey y'all

Now I understand the "psychological issues" you guys talk about.
Took a trade right at the bottom and it moved up and looked awesome.. then it fluctuated down and up and down and.. yeah you've already been there; so I got stressed out and closed the trade right at where my average position was.. so it was a breakeven trade. But man at some point it was ITM for real.

Then I fucked it all up by taking a bullshit trade just to compensate it. And that one just fucked everything up.. Need to take a walk so, talk to you guys later. BTW,...

Hahaha aaaaah yeah, I know where you are and how you feel... But I can tell you, once you know what to look for and you write down 4 or 5 simple rules to follow, it'll be all more simple.

It was for me, even if the systems I followed were failures, it was far more easy to follow some rules if you believe in them.
  • #1,198
  • Apr 4, 2011 4:26am Apr 4, 2011 4:26am
Quoting Carnegie
Hey y'all

Now I understand the "psychological issues" you guys talk about.
Took a trade right at the bottom and it moved up and looked awesome.. then it fluctuated down and up and down and.. yeah you've already been there; so I got stressed out and closed the trade right at where my average position was.. so it was a breakeven trade. But man at some point it was ITM for real.

Then I fucked it all up by taking a bullshit trade just to compensate it. And that one just fucked everything up.. Need to take a walk so, talk to you guys later....
Haha! Someone got their cherry popped.
Not laughing at you, I know the pain. Welcome to live trading!
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,199
  • Apr 4, 2011 4:58am Apr 4, 2011 4:58am
Quoting LasVahGoose
Haha! Someone got their cherry popped.
Not laughing at you, I know the pain. Welcome to live trading!
People even mess up big time with very rigid trading methods based on SR and Indi's when they start.

Can imagine what Carnegie will have to go through with such a discretionary method (should not even use the word method for it.lol) .

Anyways good luck Carnegie.
.
  • #1,200
  • Apr 4, 2011 5:21am Apr 4, 2011 5:21am
Quoting scott89
Hahaha aaaaah yeah, I know where you are and how you feel... But I can tell you, once you know what to look for and you write down 4 or 5 simple rules to follow, it'll be all more simple.

It was for me, even if the systems I followed were failures, it was far more easy to follow some rules if you believe in them.
Funny thing is.. I actually have rules for it.. But what are the rules to follow? Life was much easier with S/R hahaha. No but in time things will get better, just keep on keeping on ya know?

Quoting LasVahGoose
Haha! Someone got their cherry popped.
Not laughing at you, I know the pain. Welcome to live trading!
Yeah actually it's like the second time live but still.
First time I was smart enough to understand that I didn't know shit and the one that was wrong was I and not the market (-8% lesson.. was an expensive one )
Thanks man.. funny thing is that the first trade was really a sexy one if I didn't fuck up.. but I guess the art is at exiting, not entering.

Quoting nasir.khan
People even mess up big time with very rigid trading methods based on SR and Indi's when they start.

Can imagine what Carnegie will have to go through with such a discretionary method (should not even use the word method for it.lol) .

Anyways good luck Carnegie.
Exactly what I was talking about.. I have rules but still, it's different for each situation so it kinda makes it allot harder. But you are correct in what you say nasir!

Thanks man, good luck to you aswell.

Take care guys
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