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Where can I learn more about Price Action like those in James16 charts? 9 replies

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james16 Chart Thread

  • #121,161
  • Nov 27, 2012 12:45am Nov 27, 2012 12:45am
forex is a zero-sum game? one trader wins and other looose? or majir part of the looosers consist of business who buy n sell internationally?
and what is the main motive of institutional investors.
  • #121,162
  • Nov 27, 2012 12:57am Nov 27, 2012 12:57am
Quoting surajkincity
forex is a zero-sum game? one trader wins and other looose? or majir part of the looosers consist of business who buy n sell internationally?
and what is the main motive of institutional investors.
forex is a zero-sum game?

Yes.

one trader wins and other looose?

Given that they are part of the same transaction, yes.

or majir part of the looosers consist of business who buy n sell internationally?

Not necessarily. For the most part, traders with little to no knowledge about the markets and its dynamics including the subtle aspects of risk management are the ones that suffer losses. And by losers I assume you're talking about consistently losing traders. Please understand that losses are an integral part of every successful trader's track record, but they have an edge that enables them to win on a consistent enough basis.

and what is the main motive of institutional investors.

Institutions largely trade for primarily the same reasons the retail trader trades, that is for speculative profits. They may have other motives too like hedging risk.

g.
I believe . . .
  • #121,163
  • Nov 27, 2012 3:54am Nov 27, 2012 3:54am
Quoting ghous
forex is a zero-sum game?

Yes.

one trader wins and other looose?

Given that they are part of the same transaction, yes.

or majir part of the looosers consist of business who buy n sell internationally?

Not necessarily. For the most part, traders with little to no knowledge about the markets and its dynamics including the subtle aspects of risk management are the ones that suffer losses. And by losers I assume you're talking about consistently losing traders. Please understand that losses are an integral part of...
but every forex transection is not made by forex traders many are made by holiday travelers companies buying n seling internationally and evn central banks?
so do we earn money from the loss thy make or we earn only from our fellow traders loss...
if we earn only bciz if our felow traders loss thn dont u think forex iz really hard?
  • #121,164
  • Nov 27, 2012 4:30am Nov 27, 2012 4:30am
Quoting surajkincity
but every forex transection is not made by forex traders many are made by holiday travelers companies buying n seling internationally and evn central banks?
so do we earn money from the loss thy make or we earn only from our fellow traders loss...
if we earn only bciz if our felow traders loss thn dont u think forex iz really hard?
I think you are getting hung up on the wrong details..

Lets say you buy 1 lot, price goes up and you sell it for a profit. I come in and buy your lot, for one thing you do not know how long I am I planning on holding on to your lot.. could be a few minutes could be for a few months.

So I bought your lot that you sold, a week later I sell it for a profit, we both made money off and I bought it at the same price you sold it at..

I am not sure why you are soo hung up on these details, I suppose some people have moral issues. I just think of it more as you are developing a skill to determine what a product is worth, nothing more nothing less.
  • #121,165
  • Nov 27, 2012 4:49am Nov 27, 2012 4:49am
Quoting SimpleDev
I think you are getting hung up on the wrong details..

Lets say you buy 1 lot, price goes up and you sell it for a profit. I come in and buy your lot, for one thing you do not know how long I am I planning on holding on to your lot.. could be a few minutes could be for a few months.

So I bought your lot that you sold, a week later I sell it for a profit, we both made money off and I bought it at the same price you sold it at..

I am not sure why you are soo hung up on these details, I suppose some people have moral issues. I just think...
hey can u please explain your last para specially last two lines. bcoz mayb u r correct.
  • #121,166
  • Nov 27, 2012 6:26am Nov 27, 2012 6:26am
Hello guys,
I am new to posting on here, I have been reading this crazy long thread for a while trying to learn everything I can. I also am trying to keep up with the current stuff and look at my charts while looking at the examples yall are providing. I am having a difficult time keeping up with some of the shorthand on here, and if you wouldnt mind answering a few questions.

What is PB stand for?
What does HCR and LCS stand for.

Thanks for taking some of your time and answering my painfully stupid question!
  • #121,167
  • Nov 27, 2012 6:40am Nov 27, 2012 6:40am
Quoting Jacolos
Hello guys,
I am new to posting on here, I have been reading this crazy long thread for a while trying to learn everything I can. I also am trying to keep up with the current stuff and look at my charts while looking at the examples yall are providing. I am having a difficult time keeping up with some of the shorthand on here, and if you wouldnt mind answering a few questions.

What is PB stand for?
What does HCR and LCS stand for.

Thanks for taking some of your time and answering my painfully stupid question!
hey PB is pinbar. or pull back in certain cases.
  • #121,168
  • Nov 27, 2012 6:41am Nov 27, 2012 6:41am
how can we effectively trade volumes in forex? or are they important?
  • #121,169
  • Nov 27, 2012 6:46am Nov 27, 2012 6:46am
Quoting surajkincity
but every forex transection is not made by forex traders many are made by holiday travelers companies buying n seling internationally and evn central banks?
so do we earn money from the loss thy make or we earn only from our fellow traders loss...
if we earn only bciz if our felow traders loss thn dont u think forex iz really hard?
Like SimpleDev said,

You're getting on the wrong track here. Your worry is not who is losing to give you your money. The FX market isn't as segregated as you're making it to be. Its just one big pool with all kinds of traders participating for various reasons. Some are winning and most are losing. Those who lose end up filling pockets for those who win. Exactly which dollar comes to you from a hedge fund trader and which one comes from a foreign traveler is of little relevance no? You see even a trader who has a 95% strike rate ends up filling someone else's pocket on those 5 trades he loses on in a sample of 100 trades that he takes.

What you need to take from all this is that yes trading as a professional endeavor isn't a walk in the park. But that's really it. Dissecting it any further is trying to over complicate things.

g.
I believe . . .
  • #121,170
  • Nov 27, 2012 6:48am Nov 27, 2012 6:48am
Quoting Jacolos
Hello guys,
I am new to posting on here, I have been reading this crazy long thread for a while trying to learn everything I can. I also am trying to keep up with the current stuff and look at my charts while looking at the examples yall are providing. I am having a difficult time keeping up with some of the shorthand on here, and if you wouldnt mind answering a few questions.

What is PB stand for?
What does HCR and LCS stand for.

Thanks for taking some of your time and answering my painfully stupid question!
PB = Pin Bar

HCR = Highest Close of Resistance

LCS = Lowest Close of Support

g.
I believe . . .
  • #121,171
  • Nov 27, 2012 6:54am Nov 27, 2012 6:54am
Quoting surajkincity
how can we effectively trade volumes in forex? or are they important?
There are no true volumes in forex as you have in stocks and other centralized markets where real volumes are actually published.

Volumes in forex are taken to be "tick activity per time period". So for instance the mt4 volumes indicator works by measuring the number of times price moves a pip in either direction during the time period of the price bar and then prints it as a volume bar.

While its not true volumes, its a rough estimation of it and hence useful to an extent.

Those who use Volumes for their trading refer to their methods as "Volume Spread Analysis" or VSA for short. (we have a few VSA threads here at FF too if you look around) These systems in particular try and gauge the order flow in the market based on the tick activity as shown by the proxy forex volumes.

How valid or reliable are they?

Like all indicators they work when you use them coupled with solid knowledge about price action dynamics and price pivot zones.

hope this makes sense.

g.
I believe . . .
  • #121,172
  • Nov 27, 2012 7:21am Nov 27, 2012 7:21am
We have one trader on the private forum (avasfx) that introduced us to a novel way of using volume data.

Quoting ghous
Those who use Volumes for their trading refer to their methods as "Volume Spread Analysis" or VSA for short. (we have a few VSA threads here at FF too if you look around) These systems in particular try and gauge the order flow in the market based on the tick activity as shown by the proxy forex volumes.
He watches the futures market (where the data actually means something) and when he sees what he's looking for he makes a trade in the corresponding spot market. What he's looking for is usually a large volume spike whenever Price crosses a Up/Down Sloping Trendline. The large volume spike usually heralds a reversal. You'll need an account with a futures broker...but plenty of them also trade spot fx along with the futures (thinkorswim comes to mind).

Best,

Eric.
" Be always employed in something useful." - Benjamin Franklin
  • #121,173
  • Nov 27, 2012 7:22am Nov 27, 2012 7:22am
Quoting ghous
PB = Pin Bar

HCR = Highest Close of Resistance

LCS = Lowest Close of Support

g.

Thanks for answer. I didn't know that I already knew that. Thanks
  • #121,174
  • Nov 27, 2012 7:35am Nov 27, 2012 7:35am
Quoting cougar73
We have one trader on the private forum (avasfx) that introduced us to a novel way of using volume data.



He watches the futures market (where the data actually means something) and when he sees what he's looking for he makes a trade in the corresponding spot market. What he's looking for is usually a large volume spike whenever Price crosses a Up/Down Sloping Trendline. The large volume spike usually heralds a reversal. You'll need an account with a futures broker...but plenty of them also trade spot fx along with the futures (thinkorswim comes...
Good stuff. The futures derivative market can be used to derive volumes for the spot FX market. Nice. Thanks for sharing Eric.

g.
I believe . . .
  • #121,175
  • Nov 27, 2012 8:45am Nov 27, 2012 8:45am
Quoting surajkincity
but every forex transection is not made by forex traders many are made by holiday travelers companies buying n seling internationally and evn central banks?
so do we earn money from the loss thy make or we earn only from our fellow traders loss...
if we earn only bciz if our felow traders loss thn dont u think forex iz really hard?
Hey Sura I like all your questions i'm gonna start jumping in here too

Yes forex is very hard. It is a business and most business do fail. That is why we need to take a business approach and protect our business. Just because it is a zero sum game(and reality it's a negative zero sum game with spread) does not mean we can't gain an edge on it. It is still a market place with inefficiencies to be exploited. Some are harder to find then others. The goal for you is to demo till you can find an edge that you can repeat. They are there

Best
Mike
  • #121,176
  • Nov 27, 2012 8:59am Nov 27, 2012 8:59am
Quoting surajkincity
hey can u please explain your last para specially last two lines. bcoz mayb u r correct.
Forex is zero sum so there is ALWAYS someone on the other side of your transaction. But the difference is this market is so huge and there are so many buyers/sellers for different reasons. It doesn't mean because you buy at X price someone is selling at X price for the same reasons. Thus both players COULD potentially come out as winners and both can come out as losers. The smaller a market place the more likely for the zero sum to play a larger role. Again you are correct that someone is taking the other side of your trade but it's not the same way as if someone is taking the other side and holding it until you then sell it back(or buy it back).

I highly recommend this thread by Darkstar. I very very rarely recommend reading many things on the internet. This is one thing that should also help shed light on how forex works(or a market place works as well)

http://www.forexfactory.com/showthread.php?t=7484

keep asking questions!

Mike
  • #121,177
  • Nov 27, 2012 9:00am Nov 27, 2012 9:00am
Quoting Jacolos
Thanks for answer. I didn't know that I already knew that. Thanks
Hey Jacolos welcome

Mike
  • #121,178
  • Nov 27, 2012 9:35am Nov 27, 2012 9:35am
Gap in USDCAD



Perhaps this is a bit off topic, but did anyone else see this 6 pip gap in USD CAD on their hourly feed? Any ideas what caused it? According to the forex calendar, there were 2 major news releases today for the US. could that have caused a decrease in liquidity?

What will price do next?
Attached Image (click to enlarge)
Click to Enlarge Name: usdcad.gif Size: 14 KB
  • #121,179
  • Nov 27, 2012 9:40am Nov 27, 2012 9:40am
Quoting Sciurus
Gap in USDCAD



Perhaps this is a bit off topic, but did anyone else see this 6 pip gap in USD CAD on their hourly feed? Any ideas what caused it? According to the forex calendar, there were 2 major news releases today for the US. could that have caused a decrease in liquidity?

What will price do next?
Hey Sciurus

You will rarely get gaps in the FX market during the week. The market is just too liquid that it doesn't happen these days. That is most likely(and is) simply your broker. So be careful. Always something you want to check on other feeds to see if your broker got a bad spike or bad data for a few pips. Mostly just be skeptical if it's during the week. After the weekends is different(even though it can be argued there is no gap either )

Best
Mike
  • #121,180
  • Nov 27, 2012 10:00am Nov 27, 2012 10:00am
Quoting mbqb11
Hey Sciurus

You will rarely get gaps in the FX market during the week. The market is just too liquid that it doesn't happen these days. That is most likely(and is) simply your broker. So be careful. Always something you want to check on other feeds to see if your broker got a bad spike or bad data for a few pips. Mostly just be skeptical if it's during the week. After the weekends is different(even though it can be argued there is no gap either )

Best
Mike

I checked out some online charts and they aren't showing a gap. Hence, as you say, it must be the broker feeding bad data. Strange - I'm on a FXCM demo account, and FXCM is supposed to be a non dealing desk broker. Perhaps it was not intentional on their part.
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