Disliked...eventually one force will win the battle at what I call it an “equilibrium point”(proof of its absolute existence in Forex later, yet it takes on a new meaning) where the opposite orders have been fully absorbed and balanced out, thus the price action will go in direction of that particular force and a strong trend occurs as a result, until it reaches a new price levels or a range where the whole battle would start again;Ignored
Disliked...naturally it was as a result of a very swift battle in which one force had the overwhelming order size to consume the other force in rapid succession(or simply one force can opt to dropped out of the order book voluntarily and let the other force takes position...infinite possibilities in the market)....Ignored
I used to do this (correct posts to help Newbie readers) a lot years ago, but I've stopped doing it for a while now. However, occasionally, I come across a post that jumps out at me, screaming for attention and correction.
Without any disrespect to the OP, in all aspects of life, the underlying premise is the binding force that keeps the resulting conclusion intact. However, when what's known as the 'First Cause' is flawed, then it becomes almost a moot point to attempt a derivation to an Effect that can be anything but correct.
Here's the fundamental problem:
a) Retail Forex has no single source of transaction clearing. Retail Forex is one of the purest forms of OTC in existence and there is no concept of Time & Sales in Retail Forex.
b) Retail Forex is predicated on dissimilar pools of transaction liquidity, spread across a transactional landscape that contains no accurate facility for tracking and/or calculating aggregate Volume, or aggregate Bid/Ask Tic Data.
c) Each Retail Forex broker or intermediary must establish its own contract guidelines with a set of "liquidity providers" who make-up "the pool" necessary to further the broker's or intermediary's business model with respect to things such as, how the broker or intermediary derives its profit, how its handles transaction processing, off-setting of trades, whether or not it has a dealing desk, bid/ask pricing algorithms, executable dealing rates, etc.
Due to the coupling of A, B and C above, there is no true aggregation, representation and/or true real-time distribution and/or dissemination of Retail Forex Volume and/or Transaction Data, through any central facility and/or repository that enables an individual trader to know with any degree of certainty, anything about the condition or status of the true order flow of the market, globally. Thus, the use of the term "forces winning battles," (as just one example) denotes and assumes that "all forces" are seen, or capable of being seen through a Retail Forex Trading Platform.
No such platform in Retail Forex exists. And, what's more, it never has existed - all for the reasons stated in A, B and C above.
Therefore, if the “equilibrium point” is to exist, then it can only exist on the trader's platform where it is being derived and only from within the pool directly associated with that specific platform. Which is the exact same premise that must hold true for ALL technical indicators calculated against historical data stored on a broker's or intermediary's server.
Lastly, there appears to be a break-down or failure in the fundamental understanding of how counter-party zero sum game markets work. At the end of every Long transaction that a broker or intermediary off-sets against their liquidity pool, there MUST be another entity willing to take the Short side of that same transaction. Therefore, using the same illustration, in order for there to be an "overwhelming order size sufficient to consume the other force," in Retail Forex, there would by definition have to be (at the exact same time) insufficient counter-party participation within the liquidity pool in which the Long side of the transaction is bound, to make the broker's or intermediary's job of transaction off-setting that position technically impossible. And, whenever liquidity within the Retail FX markets gets that low, spreads are automatically calculated to go through the roof.
The "other forces" in Retail Forex would have no one to buy their Lots from, if such causation was the real reason why price moved or a trend was initiated and/or continued. Therefore, this underlying premise cannot be true.
I don't take a particular joy out of making corrections of people like this in public, but I do have a particular affinity for Newbie Traders and I would hope that they at least have a fighting chance to stick around long enough in the business to become an old vet like myself some day. Today's Newbie, has to deal not only with a Retail Forex industry skewed against them being successful long-term, but they also have to deal with a ton of misinformation along the way to becoming truly successful as a consistently profitable trader.
I can't correct every single thread on the internet related to Retail FX, butt I would encourage some of you old timers who are in the know and who are successful, to join in the cause of helping to clean-up the image of our FX industry, whether you are high-end (large account) Retail, or you are like myself, who has moved on to an Institutional platform. We owe it to the industry, as we were once Newbies, too!
This is not meant to be a personal front to anyone, especially the OP, who obviously writes very passionately about a subject that he/she obvious spent some time studying (just not enough apparently) I would just hope that the Newbie finds the correction educational and hopefully somewhat instructive.
I'll quietly step out the side door now, as the labeled party-pooper, I am sure. Sorry, for the intrusion, but the Newbies reading this really do need to get the fundamentals of how our business works, tucked firmly under their belt.
With that said, I wish all happy trading!
