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Basic - trading extreme positioning

  • #41
  • Jun 29, 2014 8:05pm Jun 29, 2014 8:05pm
Quoting 5abi
Beginning April of last year, I came across this feature that Forex Factory calls "Positions / Live accounts". The link is here - http://www.forexfactory.com/trades.php This is a free tool Forex Factory provides to its users. It basically states how many lots are long or short a pair. You can also choose how many traders are long or short a pair. This in my opinion is invaluable information.

I start by assumption that most people who trade are wrong and they will lose money. So these 91 % lots are going to lose money. I want to bet...
GL
Time turns trend. - W.D. Gann
  • #42
  • Edited 1:37am Jun 30, 2014 12:35am | Edited 1:37am
Quoting billbss
USDCAD has also been moving according to your system.
Assuming that we started trading the system according to the rules from today, no trade has triggered, I guess. Closest pending order for USDCAD is around 1.0650 now. For USDJPY we need at least 25 pip retracement.
First buy limit for GBPUSD is around 1.7000, first sell limit for EURCHF at 1.2185.
  • #43
  • Jun 30, 2014 2:30am Jun 30, 2014 2:30am
5abi,
Have you ever considered using ATR instead of % of price for setting the trades? What I mean is that if we put orders according to % of price then we ignore the fact that every pair has different volatility.
For example:
EURCHF is an extremely slow pair with daily ATR around 20 pip. If using % of price then our orders have to be 30, 60, 120 pips from current level.
EURUSD has daily ATR 60 pip that is 3 times bigger. At the same time our orders need to be 34, 68, 136 pips from now.
I see a disbalance here. What is your opinion?
  • #44
  • Jun 30, 2014 3:28am Jun 30, 2014 3:28am
So at the moment USD/JPY is 87%long 13% short, so not quite 90/10.Why would we not want to short this pair but prefer EUR/GBP. ?Cant quite get the thinking here ,anybody please
  • #45
  • Jun 30, 2014 3:44am Jun 30, 2014 3:44am
Quoting buster48
So at the moment USD/JPY is 87%long 13% short, so not quite 90/10.Why would we not want to short this pair but prefer EUR/GBP. ?Cant quite get the thinking here ,anybody please
I see no trade for EURGBP either. But nobody even suggested to trade it?
I see short USDJPY, USDCAD, EURCHF and long GBPUSD.
  • #46
  • Jun 30, 2014 4:30am Jun 30, 2014 4:30am
Quoting Indrek
{quote} I see no trade for EURGBP either. But nobody even suggested to trade it? I see short USDJPY, USDCAD, EURCHF and long GBPUSD.
Hi indrek,on post 2, 5abi was saying about shorting that pair, which seemed to confuse some me included he did give an explanation but I'm not sure. I did try this approach way back but couldn't make it work perhaps I missed something, cheers.
  • #47
  • Edited 10:57am Jun 30, 2014 6:30am | Edited 10:57am
All mentioned trades look good by now. It is not possible to make any conclusions on the basis of one day but I like the idea more and more. I think, I have found my own approach how to handle this. It differs from original one in details but not in principle. Will not say more without permission from 5abi as he is the thread owner who makes the rules here.
  • #48
  • Jun 30, 2014 7:18am Jun 30, 2014 7:18am
Quoting Indrek
All mentioned trades look good by now. It is not possible to make any conclusions on the basis of one day but I like the very idea more and more. I think, I have found my own approach how to handle this. It differs from original one in details but not in principle. Will not say more without permission from 5abi as he is the thread owner who makes the rules here.
OK indrek, Id be real interested to hear your approach, you've got me more interested in this method now, lets hope 5abi is ok with you saying a bit more ,cheers buddy.(PS one thing I was thinking was the use of stochastic, and trade against that as well ,as that's always led me up the garden path)
  • #49
  • Jun 30, 2014 11:59am Jun 30, 2014 11:59am
Quoting Indrek
All mentioned trades look good by now. It is not possible to make any conclusions on the basis of one day but I like the idea more and more. I think, I have found my own approach how to handle this. It differs from original one in details but not in principle. Will not say more without permission from 5abi as he is the thread owner who makes the rules here.
Hey Indrek - feel free to post your approach and modifications. This is the only way we all learn and improve.
Its all in the mind.
  • #50
  • Jun 30, 2014 12:11pm Jun 30, 2014 12:11pm
Hey 5abi! Thanks for starting this thread.

There is real merit in looking at the fx market the way you are doing.

As well as the data sources you have shared, my FX publishes details of open positions here: http://www.myfxbook.com/community/outlook

If you hover over the bars, they give you percentage information.

I can't help wondering that someone far more clever than me could code something to pull the data off these various websites and put them into an easy to read dashboard for MT4............. Similar to the FF news calender indicator.

Maybe it could even aggregate the positions from the different websites..................

Just a thought!!!
  • #51
  • Jun 30, 2014 1:51pm Jun 30, 2014 1:51pm
Quoting Gt3rs
Hey 5abi! Thanks for starting this thread. There is real merit in looking at the fx market the way you are doing. As well as the data sources you have shared, my FX publishes details of open positions here: http://www.myfxbook.com/community/outlook If you hover over the bars, they give you percentage information. I can't help wondering that someone far more clever than me could code something to pull the data off these various websites and put them into an easy to read dashboard for MT4............. Similar to the FF news calender indicator....
I do not think we need data from very many different websites, it would be overthinking and overfiltering. I compared today some free sources and basically the behaviour of traders is same everywhere. So, we may use data from two brokers that are big enough (i.e have big number of customers). If a pair is more than 70% long or short on both, then there is a trading opportunity.
My choice by now is http://fxtrade.oanda.com/analysis/open-position-ratios with confirmation from http://www.alpari.co.uk/newsroom/cat...ical-analysis/
It does not necessarily mean that Forex Factory data should be ignored. It is very similar to all others but I personally prefer to have more basis for the stats than behaviour of only 100-500 good traders in FF.
  • #52
  • Jun 30, 2014 2:09pm Jun 30, 2014 2:09pm
Has anyone used the Traders in Financial Futures - Options and Futures Combined Positions report very similar to the - CFTC Commitments of Traders Report - CME (Futures Only) for a longer term trading of 3 days to a week.

http://www.cftc.gov/dea/options/financial_lof.htm
http://www.cftc.gov/dea/futures/deacmesf.htm

I like this board I have been studying order flow trading and 5abi is very much in the right direction when indicators fail order flow is the reason.
  • #53
  • Edited 2:37pm Jun 30, 2014 2:22pm | Edited 2:37pm
Quoting 5abi
{quote} Hey Indrek - feel free to post your approach and modifications. This is the only way we all learn and improve.
Thanks, 5abi.
Basically, my modifications would be as follows:
1. We trade pairs that are over 70% long or short on at least two big brokers.
2. We calculate entries using ATR not % of price. For example: 0,5*daily ATR, 1*daily ATR and 2*daily ATR. What period of ATR to use is matter of choice, I like ATR(20) for daily.
3. We set pending orders up or down from last important low or high on hourly chart according to the calculation.
Today we would have four trades triggered with these rules: long GBPUSD at 1.7017, short USDCAD @ 1.0679, short USDJPY @ 101.43 and short EURCHF @ 1.2160.

EDIT:
USDCHF is over 70% long at both Oanda and Dukascopy now, so we may consider shorting it. Last low was 0.8862 and daily ATR(20) is 45. So, we set pending short limit orders @ 0.8885, 0.8907 and 0.8952. If it will make a new low before our trade triggers then we move our pending orders lower accordingly.
Let us see if it will work
  • #54
  • Jun 30, 2014 2:38pm Jun 30, 2014 2:38pm
Pound will only fall when there is nothing left to sell!

90 % folks short on GBP USD and yet it prints a multi year HIGH! This again goes back to my 2 main principles -

1) Until every available Pound has been sold, the market will continue to go up. It will continue to squeeze those who are short . Pound will only fall when there is nothing left to sell!
2) The market will move in such a manner as to cause Most Pain to Most number of traders.
Attached Image
Its all in the mind.
  • #55
  • Jun 30, 2014 2:41pm Jun 30, 2014 2:41pm
Quoting Gt3rs
Hey 5abi! Thanks for starting this thread. There is real merit in looking at the fx market the way you are doing. As well as the data sources you have shared, my FX publishes details of open positions here: http://www.myfxbook.com/community/outlook If you hover over the bars, they give you percentage information. I can't help wondering that someone far more clever than me could code something to pull the data off these various websites and put them into an easy to read dashboard for MT4............. Similar to the FF news calender indicator....

I think it will be a great idea if a smart programmer could take this data source and create a MT4 dashboard. My coding skills are elementary. But if some one could do it, I can definitely see value for this.
Its all in the mind.
  • #56
  • Jun 30, 2014 2:47pm Jun 30, 2014 2:47pm
Hi 5abi,

I just want to say: do keep in mind that the people who think they are good trader are the one that add their name to the position ratio. I wouln't trust a small group anyway to counter trade.

Good luck.
  • #57
  • Jun 30, 2014 4:06pm Jun 30, 2014 4:06pm
Quoting 5abi
{quote} Hey Indrek - feel free to post your approach and modifications. This is the only way we all learn and improve.
Its both refreshing and encouraging to see a forum instigator not objecting to someone posting their slant on things and shows honourable intent, so good on you 5abi.
  • #58
  • Jul 1, 2014 6:01am Jul 1, 2014 6:01am
What do you think of indrek,s mods 5abi ? ,good or stick to basics?.
  • #59
  • Jul 1, 2014 7:59am Jul 1, 2014 7:59am
Quoting buster48
What do you think of indrek,s mods 5abi ? ,good or stick to basics?.
Did you check the trades I mentioned yesterday?
GBPUSD is by now +128 pips, USDCAD +20, USDJPY -8, EURCHF +22, USDCHF not triggered.
  • #60
  • Jul 1, 2014 8:55am Jul 1, 2014 8:55am
I like your method Indrek looks very good
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