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  • #1,661
  • May 13, 2011 12:25pm May 13, 2011 12:25pm
No I don't want to risk 15%-but someone (using orderflow), apparently successfully does.
Also I dont really think its semantics- i think they are totally different concepts.
You suggest I put forward something to move the thread forward so ok.
Its not revolutionary- in-fact not even that successful- yet. But I do think its closer to orderflow trading than what's being discussed here at the moment.
Hopefully this diagram explains roughly what I am thinking. This is just one type of trade of the order flow but there are many different types.(yes i know this is futures but they represent a decent slice of the spot IMO and also less gamblers (retail traders) I would guess)

http://s1236.photobucket.com/albums/...edbreakout.jpg

My main aim is trying to find areas the informed traders will trade or when the uninformed have to liquidate. Sounds nice in theory but...
  • #1,662
  • Edited 12:49pm May 13, 2011 12:39pm | Edited 12:49pm
Different time frames call for different analysis. Remember it's a mindeset, not a strategy. The point is to get us thinking about what's going to generate orderflow. If you're looking to position trade the fundamentals become more relevant. If you're looking for short term intraday things like Lv2, Option Barriers, Market fixes can be more relevant to your trade. What connects the two together is that each trade taken is based on the idea that future orderflow will move the markets in your direction.


EDIT: you presented a chart showing uninformed/gamblers/big money. When you show a chart after the fact it's easy to say they were uninformed/bigmoney was here stuff like that. But can you tell me why the uninformed were uninformed? Why the smart traders were smart to sell into the false break out? Those are questions you need to have answered before you can place a trade.
Cautiously optimistic. . .
  • #1,663
  • May 13, 2011 12:58pm May 13, 2011 12:58pm
I still think (and i am really not trying to be pedantic) that looking for things that will generate orderflow is not orderflow trading.
If you had a good idea a news event was going to move the market (create orderflow) thats not orderflow trading- its just plain old simple trading news. Looking at interest rates - COT reports news events etc or things that will move the market is not orderflow trading. Personally i think this is a fairly important distinction!
If however you believe that a news event caused a whole lot of uninformed traders to jump in the wrong direction and informed traders use their liquidity to trade the other direction then maybe that is order flow trading- especially if you could know for sure if the informed traders were entering.
I think Its about thinking more about who is trading (when i say who i mean informed traders or not).
  • #1,664
  • May 13, 2011 1:00pm May 13, 2011 1:00pm
Quoting abritton76
No I don't want to risk 15%-but someone (using orderflow), apparently successfully does.
Also I dont really think its semantics- i think they are totally different concepts.
You suggest I put forward something to move the thread forward so ok.
Its not revolutionary- in-fact not even that successful- yet. But I do think its closer to orderflow trading than what's being discussed here at the moment.
Hopefully this diagram explains roughly what I am thinking. This is just one type of trade of the order flow but there are many different types.(yes i...
I think you might be too focused on looking at stops/barriers/SR that you neglect looking at other factors such as current sentiment. Looking at your chart alone, I believe you are trying to show a stop-hunt? IMO, the key thing here is to identify when the current sentiment would allow for favourable stop-hunting.
  • #1,665
  • May 13, 2011 1:06pm May 13, 2011 1:06pm
Yeah it is a stop hunt except i was hoping to find out for sure whether the big money was entering or not. Like in this example it looks like it does as the big large order in red shows. Maybe not though Also i am certainly not saying to ignore sentiment -news items interest rates etc- everything must be taken in context. Its just not orderflow trading! Anyway i give up Call it whatever you wish
  • #1,666
  • Edited 1:39pm May 13, 2011 1:15pm | Edited 1:39pm
Quote
If however you believe that a news event caused a whole lot of uninformed traders to jump in the wrong direction and informed traders use their liquidity to trade the other direction then maybe that is order flow trading- especially if you could know for sure if the informed traders were entering.
This is type of analysis we're talking about. How market participants will act based upon unfolding events. When we got stale unemployment numbers earlier this week for australia I believe the 80pt drop was due to traders liquidating long positions in fear it was negative for possible upcoming interest rate hikes(AUD/USD). Accompanied with recent bearish commodity happenings. Short market orders came in from traders who wanted to liquidate their longs. If the unemployment numbers were lower than expected. this could be seen by participants as good news for a future rate hike. I think we would have rallied if the unemployment numbers we're below expectations.

Hopefully the example I gave you made sense. I hope you can at least see that I'm thinking about market participants and their actions based on unfolding events.
Cautiously optimistic. . .
  • #1,667
  • May 13, 2011 1:29pm May 13, 2011 1:29pm
Quoting abritton76
Yeah it is a stop hunt except i was hoping to find out for sure whether the big money was entering or not. Like in this example it looks like it does as the big large order in red shows. Maybe not though Also i am certainly not saying to ignore sentiment -news items interest rates etc- everything must be taken in context. Its just not orderflow trading! Anyway i give up Call it whatever you wish
You don't need those volume data (I think they are not a true representation of fx market volume anyway). There are a lot of clues in all the order flow discussion threads on what to look out for. May I humbly suggest that you read through all of them a few more times. I'm sure you will get new insights.
  • #1,668
  • Edited 2:02pm May 13, 2011 1:35pm | Edited 2:02pm
Quoting Scotty B

What about GBPAUD, guys? It reached 1.5 recently, spurring profit taking, but incentives have not changed. It's pip value/daily interest payments are attractive if you're running a large cap fund... Orderflow trading in terms of value trading would suggest that all pullbacks will fade......CAREFUL use of leverage and a little patience will yield some interest (the meat) and some very predictable rate change (the bread).
GPBAUD. Selling one lot (100,000) on Oanda will produce $16.29 interest a day. Each pip drawdown is $10.56. Spread - around 5 pips. So, holding this pair short for 3.25 days earns the spread, holding for one month makes up for a drawdown of 41 pips (I deducted the spread). Here's where my thinking stops. Considering the recent risk off - stronger USD - commodity bubble environment, aussie is probably going to lose some value. End of QE2 means stronger dollar - cheaper commodities - weaker AUD. Probably shorting somewhere around 1.58 is safe, but who knows if it's ever going to get there.

UPDATE: I looked at the chart again and here's what I see: the last two commodity/aussie sell-offs didn't really move GBPAUD, only increased volatility, so now I think this commodity bubble burst should not really affect this pair.

I'm going to sell some GBPAUD now and put some limit sell orders on the way up. Let's see how it goes.
  • #1,669
  • May 13, 2011 6:53pm May 13, 2011 6:53pm
Quoting seagreen
GPBAUD. Selling one lot (100,000) on Oanda will produce $16.29 interest a day. Each pip drawdown is $10.56. Spread - around 5 pips. So, holding this pair short for 3.25 days earns the spread, holding for one month makes up for a drawdown of 41 pips (I deducted the spread)....
Seagreen,

I have faith that you're gonna make it! In the real world, people care about trading costs. What you've just demonstrated is monumental. There are large funds who move money in and out of countries, they produce the orderflow that you and I can exploit. While others think that a rate differential is just some inconsequential, meaningless number, you'll be hitting their stops/margin calls... Remember the value the rollover represents and also the cost it produces over time if you trade against it. The differential is not what drives the market, but it often reflects inter-country fundamentals that while existent induce orderflow.
  • #1,670
  • May 16, 2011 11:43am May 16, 2011 11:43am
hey guys,

thought i'd post up a question for discussion.

What do you guys usually make of price movements on days which do not really seem to have some form of a significant order flow trigger? While I understand that there is a reason for every price movement (since no one will inject a couple of million in the market just to cause a random movement), we will not be able to tag a reason for every price movement.

Sometimes it seems that price moves 100-150pips on certain days but the usual reason such as 'risk-on/off' gets reported as a means of justifying the price movement on news feeds. Assuming that there isn't any major news release on that day, I understand that some people might be tempted to make the comment that a certain person from ECB/IMF might have said something which caused price to move. But given that these people will give some form of a comment almost everyday, I feel that their effect on price will be relatively muted unless they seem extremely hawkish/dovish.

So on such days, what do you guys do with your analysis of the various currencies?
  • #1,671
  • May 16, 2011 12:22pm May 16, 2011 12:22pm
Quoting melvin87
hey guys,

thought i'd post up a question for discussion.

What do you guys usually make of price movements on days which do not really seem to have some form of a significant order flow trigger? While I understand that there is a reason for every price movement (since no one will inject a couple of million in the market just to cause a random movement), we will not be able to tag a reason for every price movement.

Sometimes it seems that price moves 100-150pips on certain days but the usual reason such as 'risk-on/off' gets reported as a means...
In this 1987 documentary a Barclays cable dealer says that on days with no news, they just "play the market on people positions" (hunt the stops):

Inserted Video
  • #1,672
  • May 16, 2011 1:09pm May 16, 2011 1:09pm
do the wallstreet shuffle... doo bee doooo
watch the greenback stumble, hear the sterling crumble....

you need a yen, to make a mark, if you wanna make mooooneeeyyyyy

lol that's awesome I want the soundtrack.....
  • #1,673
  • May 16, 2011 10:03pm May 16, 2011 10:03pm
yea!

Inserted Video
  • #1,674
  • May 16, 2011 11:40pm May 16, 2011 11:40pm
Quoting melvin87
What do you guys usually make of price movements on days which do not really seem to have some form of a significant order flow trigger? While I understand that there is a reason for every price movement (since no one will inject a couple of million in the market just to cause a random movement), we will not be able to tag a reason for every price movement
IMO when price moves while its market is closed (no change in fundy value), its a byproduct of other's flow effecting the pair.

Remember that traders trade to be profitable. Less-profitable positions will be closed/covered if a new/better profitable opportunity arises in a different currency that is worth reallocating the newly freed up funds to. This could explain why some currencies move without a clear OF reason.
  • #1,675
  • May 16, 2011 11:42pm May 16, 2011 11:42pm
Quoting Monroe
do the wallstreet shuffle... doo bee doooo
watch the greenback stumble, hear the sterling crumble....

you need a yen, to make a mark, if you wanna make mooooneeeyyyyy

lol that's awesome I want the soundtrack.....
Hahaha. I kinda like the song from Sleven http://www.forexfactory.com/showthre...96#post4373796
  • #1,676
  • May 17, 2011 2:22pm May 17, 2011 2:22pm
Quoting melvin87
hey guys,

thought i'd post up a question for discussion.

What do you guys usually make of price movements on days which do not really seem to have some form of a significant order flow trigger? While I understand that there is a reason for every price movement (since no one will inject a couple of million in the market just to cause a random movement), we will not be able to tag a reason for every price movement.

Sometimes it seems that price moves 100-150pips on certain days but the usual reason such as 'risk-on/off' gets reported as...
risk-on/risk-off in other markets causes algo's to buy/sell in fx as has just been brought to my attention from IFR, but I read that all the time. Obviously seems like legit order-flow to me. If it's a rangy/choppy session with not much in the way to cause traders to trade with confidence one way or the other, then it can seem quite random as any day traders they are probably quickly in/out with small profit/loss adding to the noise. This of course would be during the NY session and into the close.

If it's during the European session and into the euro-ny crossover, I would be more inclined to assume it's more in the way of dealers/sovereigns/institutions and that kind of thing, for whatever reasons.

Btw, the barclay's dealer on that old ass documentry said that on days with no trend he will play the positions, not on days with no news.
  • #1,677
  • May 17, 2011 2:24pm May 17, 2011 2:24pm
Quoting EmeraldEyes
Hahaha. I kinda like the song from Sleven http://www.forexfactory.com/showthre...96#post4373796
I never saw that movie, I heard it was good, I gotta get around to it one day....
  • #1,678
  • May 18, 2011 3:07pm May 18, 2011 3:07pm
Hey Order Flow peoples... If you feel like a bit of collaboration on the daily happenings of the market feel free to drop into my thread "Whats really Moving the Market today"

There's no rules really its just geared towards getting into the mind of the current market.

Hopefully see you there
Time hides Nothing
  • #1,679
  • May 31, 2011 11:56am May 31, 2011 11:56am
some orderflow analysis... what do you guys think....

firstly... report from IFR...

Quote
Technically EUR/USD looks a bit "spent" on the day; a collection of tops between 1.4407/25 reveals there's an interested seller around; there are probably option barriers in play, 1.4450 would stand out as an obvious level but there's some talk of something circa 1.4030/35 for a more sophisticated market player. Momentum is clearly in favour of the single currency and suggests a buy dips approach and the 21-day M/A getting breached confirms that unless we close back below 1.4298. Cloud cover resistance on the daily at 1.4372 (Reuters 3000Xtra)...

with a chart and PA analysis....

Attached Image (click to enlarge)
Click to Enlarge Name: of.png Size: 35 KB


what do you guys think? obvious target would be 4430/35 - 4450.
  • #1,680
  • May 31, 2011 12:18pm May 31, 2011 12:18pm
correction, sorry, it wasn't a rumor greece should exit euro, it was a german politician who said this: german-politician-says-greece-should-leave-euro-zone
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