Alexx90 ..... Thank you for the pdf. I will give it a read. Good to see you back.
Hi Alessandro,
Thanks for the Norges Bank Working Paper. I'd read it before quite a while back, but it was good to read again.
I can see that you have put a lot of effort into trying to understand the FX market and have developed a framework that helps you try to model the market.
Early on I was very interested in why the market moved as it did. Now I'm more interested in how it moves, than why it moves.
I can tell you from experience with several professional traders, including a former 27 year veteran of bank trading, a high profile hedge fund manager, the founder & former president of one of the largest proprietary trading firms, and the star million dollar trader who is now the current president, that none of these traders know why the markets move as they do.
Many of your explanations appear to be somewhat one dimensional, as if there was one trader, or group of traders, that was moving the market. It might happen during periods of low volume when they're trying to run stops, but it is not likely when the market gets busy. And a very liquid, large asset class like the EURUSD is too big to manipulate.
The scenario from the Norges Bank Paper is much more likely. Retail traders are only 8-10% of the FX market. The hedge funds and CTAs are the real drivers of the market. They buy, or sell, from their brokers (who know that they are "informed") and the brokers trade in the same direction which moves price in that direction giving them both a profit.
Once it reaches a certain level it triggers a sell, or buy, signal from traders at a corporation, which moves the price back up until it hits another level which may trigger an algo trading response. There are so many other players that come into the market at various times for varies reasons, that no one knows for certain when or why! This goes on constantly and creates the whipsaws and trends we see.
During periods of low volatility it's best to stay out of the market, because market makers and brokers can manipulate the market (looking for stops to run! ;^) The most important thing to look for are the recurring patterns and price levels.
Well I'm falling asleep, so I guess I'd better leave it there.
I appreciate your positive attitude in dealing with some difficult traders!
God bless and good luck with your trading!
Thanks for the Norges Bank Working Paper. I'd read it before quite a while back, but it was good to read again.
I can see that you have put a lot of effort into trying to understand the FX market and have developed a framework that helps you try to model the market.
Early on I was very interested in why the market moved as it did. Now I'm more interested in how it moves, than why it moves.
I can tell you from experience with several professional traders, including a former 27 year veteran of bank trading, a high profile hedge fund manager, the founder & former president of one of the largest proprietary trading firms, and the star million dollar trader who is now the current president, that none of these traders know why the markets move as they do.
Many of your explanations appear to be somewhat one dimensional, as if there was one trader, or group of traders, that was moving the market. It might happen during periods of low volume when they're trying to run stops, but it is not likely when the market gets busy. And a very liquid, large asset class like the EURUSD is too big to manipulate.
The scenario from the Norges Bank Paper is much more likely. Retail traders are only 8-10% of the FX market. The hedge funds and CTAs are the real drivers of the market. They buy, or sell, from their brokers (who know that they are "informed") and the brokers trade in the same direction which moves price in that direction giving them both a profit.
Once it reaches a certain level it triggers a sell, or buy, signal from traders at a corporation, which moves the price back up until it hits another level which may trigger an algo trading response. There are so many other players that come into the market at various times for varies reasons, that no one knows for certain when or why! This goes on constantly and creates the whipsaws and trends we see.
During periods of low volatility it's best to stay out of the market, because market makers and brokers can manipulate the market (looking for stops to run! ;^) The most important thing to look for are the recurring patterns and price levels.
Well I'm falling asleep, so I guess I'd better leave it there.
I appreciate your positive attitude in dealing with some difficult traders!
God bless and good luck with your trading!
The mind thinks, the heart knows...
Hi Alessandro, Nice thread you started, agreed with most you mentioned, btw maybe I can learn something from you. I trade accumulation and distribution, Fibo, S/R, daily and weekly pivot for reference, I will like to know how you determine or justify your entry from the chart you posted? Or, which phase in what timeframe, you decide an entry is valid? Hope you can give me some guidance. As for the manipulation portion you brought up, I will like to share something in my personal opinion, Government and Central Banks are the only capable entity of...
Yes, there is intervention from the central banks.
Some brokers do run stops, when volume is low. That's been going on is other markets for about as long as there have been stop loss orders.
There are a few good brokers, and some that start good and end bad. Too much temptation to trade against your clients when you know they're wrong, or that you can move the market against them and make a quick profit!
Finding a way to manage this kind of risk is a very important part of trading.
The mind thinks, the heart knows...
- #125
- Nov 14, 2013 12:55am Nov 14, 2013 12:55am
{quote} Yes, there is intervention from the central banks. Some brokers do run stops, when volume is low. That's been going on is other markets for about as long as there have been stop loss orders.
which server you mention for safe trading. name please
- #126
- Nov 14, 2013 12:00pm Nov 14, 2013 12:00pm
{quote} Yes, there is intervention from the central banks. Some brokers do run stops, when volume is low. That's been going on is other markets for about as long as there have been stop loss orders.
The only winner is the one who survive the longest...
- #127
- Edited 3:12pm Nov 14, 2013 2:56pm | Edited 3:12pm
- Joined Feb 2012 | Status: Grand Ultimate | 825 Posts
{quote} which server you mention for safe trading. name please
Hi Juisen25,
I'm guessing that you mean "broker" when you say "server".
I don't know much about non-U.S. brokers because I live in the U.S. and almost no non-U.S. broker will open accounts for U.S. citizens because of CFTC restrictions.
Since you're not in the U.S., most U.S. brokers do not apply those restrictions to your account.
Non-U.S. Brokers:
The only broker outside the U.S. that I might open an account with is unregulated, and located on a Caribbean island, PellucidFX. They have mostly good ratings on ForexPeaceArmy.com The founder, Damon Hunt, seems honest. Hopefully, he won't burn out!
Global Prime It's regulated (Australia) and one of the principals, Jeremy, is honest and upright. It has Steve Hopwood's approval. He really hates most brokers and their tricks, so Global Prime is probably okay. This is his forum, stevehopwoodforex.com .
U.S. brokers:
ATC Brokers, my preferred broker, but they do not offer NinjaTrader, with its easy-to-use range bars. (got tagged by NFA for introducing clients with over $20K accounts to an "unqualified" intermediary. No one lost any money, and they paid a large fine. I read their explanation and it sounded plausible.)
FXCM (got tagged by NFA for giving all negative slippage to the client & taking all the positive slippage for the firm. They paid a big fine & now seem to be trying to clean up their act.) They offer a lot of choices in accounts and platforms, but their spreads are a bit high. They offer a free NinjaTrader platform with $5K account & $500K trading/mo.
MBTrading, which offers NinjaTrader. They have some unique features, like paying for limit orders (giving liquidity), and several platforms. I've heard some complaints about customer service in the past, but it could have changed.
Oanda (no NinjaTrader) I've had difficulty finding info on their site, and their customer service has not always been knowledgeable in the past.
As you probably know, with any broker you should constantly monitor suspicious account/trading activity, and bring any irregularities to the broker's attention. If they refuse to correct mistakes, or answer a polite inquiry, withdraw your equity, leave the brokerage and look elsewhere. If you have serious problems with withdrawals, and the broker is regulated, you can file a complaint with the regulatory body, the NFA in the U.S.
"Never get "married" to a broker." is a good thing tor remember!
Watch out for some who offer spreads and commissions that are too-good-to-be-true to sign up more new traders.
Watch out for brokers who offer bonuses for signing up.
This kind of broker will have to play some tricks to make his "business model" work.
So the lowest spreads/no spread, lowest commission/no commission can actually be a danger sign.
There are exceptions, Interactive Brokers, for example, but they're rare.
Good luck & take care!
The mind thinks, the heart knows...
- #131
- Nov 30, 2013 6:25pm Nov 30, 2013 6:25pm
- Joined Nov 2013 | Status: Trader | 1,391 Posts
SPC * Swollen PocketZ Crew!
- #132
- Nov 30, 2013 11:00pm Nov 30, 2013 11:00pm
- Joined Nov 2013 | Status: Trader | 1,391 Posts
Regular trends are rare, a lot of swings where price goes one way and reverses in an hour or two. Trend trading is hard, a lot of people would agree.
and I can post more in every instrument in as little as the 1 minute time frame.
SPC * Swollen PocketZ Crew!
Heck if it helped you to discover price action trading based on support, resistance, supply, demand, etc, etc. then GREAT.
new traders reading that should ignore it
I agree with both of the quotes, it did help me to learn a lot, and I realize that if a few years ago I knew what I know now...
and I am happy about that, cause even if I consider current trading conditions as hard due to relatively low volatility, I am looking forward to "better" conditions, with increased market volatility. If I can manage now, I can manage later. Joe, you may be right about negative thinking, but it is not that, it is being realistic. I see how markets have changed over the past 4 years, I know it is nothing disturbing, cause markets move in cycles, but my point is that a lot of people have started trading in the years of 2009-2011, and when volatility evaporated in the end of 2012, a lot of things that worked fine in the earlier years, simply ceased to give profit.I would definitely agree that new traders should not pay attention to absolute statements, I should rather say- from my perspective/methodology, trends are... Perhaps I should work more on spotting trends, perhaps this might be useful, so thanks for your comment. I almost exclusively trade EURUSD, and it is sometimes freaky, but as you point out on other instruments, trends still exist
- #134
- Dec 5, 2013 7:09am Dec 5, 2013 7:09am
- | Joined Feb 2007 | Status: Small is beautifull | 1,368 Posts
- #135
- Dec 5, 2013 7:40am Dec 5, 2013 7:40am
- Joined Nov 2013 | Status: Trader | 1,391 Posts
I hear what you're saying. Cool... 
{quote} {quote} I agree with both of the quotes, it did help me to learn a lot, and I realize that if a few years ago I knew what I know now...
SPC * Swollen PocketZ Crew!
- #136
- Dec 13, 2013 2:56pm Dec 13, 2013 2:56pm
- Joined Nov 2013 | Status: Trader | 1,391 Posts
I was looking at this post from the 5th and forgot to reply to this...
Very true... There was a very clear reason for that in 2009. You could jump on any big move and make money. This was the sup prime times. You really didn't have to know what you were doing. Lots of people that continued to trade after things settled down got SPANKED.
Very true... There was a very clear reason for that in 2009. You could jump on any big move and make money. This was the sup prime times. You really didn't have to know what you were doing. Lots of people that continued to trade after things settled down got SPANKED.
{quote} {quote} I see how markets have changed over the past 4 years, I know it is nothing disturbing, cause markets move in cycles, but my point is that a lot of people have started trading in the years of 2009-2011, and when volatility evaporated in the end of 2012, a lot of things that worked fine in the earlier years, simply ceased to give profit.
SPC * Swollen PocketZ Crew!
- #139
- May 14, 2015 2:06am May 14, 2015 2:06am
- Joined Jul 2010 | Status: Determined | 5,346 Posts
My signature is: "Classified".
