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Is anyone here an institutional trader?

  • #641
  • Mar 23, 2015 8:04pm Mar 23, 2015 8:04pm
Thanks Bro for your time in explaining and clarifying. Appreciate that.
The only winner is the one who survive the longest...
  • #642
  • Mar 23, 2015 9:54pm Mar 23, 2015 9:54pm
Quoting skenobi
{quote} That's a leading question because it assumes that retail traders (in general) are losing on forex. That's not necessarily true because it could be that the losers are the ones that are crying like a biatch about their losses and therefore only the losers are VISIBLE.
booyah!!
If you are good at something, never do it for free--Joker
  • #643
  • Mar 24, 2015 7:50am Mar 24, 2015 7:50am
Quoting kinspk
Btw, can I assume that those "traders" who traded on the exact timing of release may not be interpreting or moving the price at the right direction? (Aka gambling)
Regarding your discussion about the market reaction to major news releases. This is after a higher than expected US core CPI. The market is overall in a downtrend, but the last few days some short covering is dominant.
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  • #644
  • Mar 24, 2015 9:55am Mar 24, 2015 9:55am
Quoting srmfx
{quote} Regarding your discussion about the market reaction to major news releases. This is after a higher than expected US core CPI. The market is overall in a downtrend, but the last few days some short covering is dominant. {image}
Good stuff!

Your opinion if any on the value of timing and interpretation of releases?
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #645
  • Mar 24, 2015 10:16am Mar 24, 2015 10:16am
Quoting skenobi
{quote} Good stuff! Your opinion if any on the value of timing and interpretation of releases?
I was FX dealer and I worked with other dealers when I was risk manager for a local corporation. My opinion is that the dealers care only about their bonuses. This means that they have to make profits to meet their targets. That's all about the markets.
No one cares whether the CPI was higher or lower. They just want the prices to move.
Regrading the US CPI, probably the first sell off was the fundamental reaction to the numbers (algos). The rally above 1.1000 for some stop hunting. And back in the right direction towards 1.09.
  • #646
  • Mar 24, 2015 10:18am Mar 24, 2015 10:18am
Probably I should add that the stop hunting is not a dirty trick by the Big guys. They just need the liquidity.
  • #647
  • Mar 24, 2015 10:27am Mar 24, 2015 10:27am
Quoting srmfx
{quote} I was FX dealer and I worked with other dealers when I was risk manager for a local corporation. My opinion is that the dealers care only about their bonuses. This means that they have to make profits to meet their targets. That's all about the markets. No one cares whether the CPI was higher or lower. They just want the prices to move. Regrading the US CPI, probably the first sell off was the fundamental reaction to the numbers (algos). The rally above 1.1000 for some stop hunting. And back in the right direction towards 1.09.
Quoting srmfx
Probably I should add that the stop hunting is not a dirty trick by the Big guys. They just need the liquidity.

All good, sir!

Always nice to have different flavors in the thread!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #648
  • Edited 12:13pm Mar 24, 2015 12:02pm | Edited 12:13pm
Quoting srmfx
{quote} I was FX dealer and I worked with other dealers when I was risk manager for a local corporation. My opinion is that the dealers care only about their bonuses. This means that they have to make profits to meet their targets. That's all about the markets. No one cares whether the CPI was higher or lower. They just want the prices to move. Regrading the US CPI, probably the first sell off was the fundamental reaction to the numbers (algos). The rally above 1.1000 for some stop hunting. And back in the right direction towards 1.09.
Couldn't agree more srm!
There is never an easier or better time to move prices than on a striped back limit book pre-release . If you have some money to burn you can shift the market over the micro scale to get done what you want.
For newer spot traders pull up a DOM of say a UST contract(thick market) and watch them rip through a scattered limit book. No easier time to hunt liquidity down than at a time like that.
Regards
  • #649
  • Mar 24, 2015 1:15pm Mar 24, 2015 1:15pm
Quoting skfx
{quote} Couldn't agree more srm! There is never an easier or better time to move prices than on a striped back limit book pre-release . If you have some money to burn you can shift the market over the micro scale to get done what you want. For newer spot traders pull up a DOM of say a UST contract(thick market) and watch them rip through a scattered limit book. No easier time to hunt liquidity down than at a time like that. Regards
Most of the newbies think that spread goes up before major news release because the brokers are bad guys. After you see 30+ pips difference between the bid and ask no the platform of one of the biggest banks before NFP everything seems different. Big guys are just pulling their orders before the episodic volatility. At the same time small traders are wondering how to trade the news.
  • #650
  • Mar 24, 2015 1:29pm Mar 24, 2015 1:29pm
Quoting srmfx
{quote} Most of the newbies think that spread goes up before major news release because the brokers are bad guys. After you see 30+ pips difference between the bid and ask no the platform of one of the biggest banks before NFP everything seems different.
... and then there's the interdealer broker shenanigans.

Quoting srmfx
Big guys are just pulling their orders before the episodic volatility. At the same time small traders are wondering how to trade the news.
It's even funnier when some retail guys (not all ) seem to think continual tight spreads is like a God-given RIGHT or something.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #651
  • Mar 24, 2015 2:17pm Mar 24, 2015 2:17pm
Quoting skenobi
{quote} ... and then there's the interdealer broker shenanigans. {quote} It's even funnier when some retail guys (not all ) seem to think continual tight spreads is like a God-given RIGHT or something.
Some of them think that for larger trades the spread should be lower.
  • #652
  • Mar 24, 2015 5:10pm Mar 24, 2015 5:10pm
Hi guys, I have a quick question about forex retails brokers.
The way i understood most of the retail forex brokers (oanda, fxcm etc) are market makers. This means they buy at bid and sell at the offer and profit from the spread. They also holds inventory like any other market makers. The price feed is coming from the interbank liquidity providers....Is my understanding true? If not can some one explain how the forex market makers/brokers work?
  • #653
  • Edited 10:23pm Mar 24, 2015 8:40pm | Edited 10:23pm
Quoting Mairan
Hi guys, I have a quick question about forex retails brokers. The way i understood most of the retail forex brokers (oanda, fxcm etc) are market makers. This means they buy at bid and sell at the offer and profit from the spread. They also holds inventory like any other market makers. The price feed is coming from the interbank liquidity providers....Is my understanding true?
Directly or indirectly, yes.

Even if some retail brokers are actually market makers in disguise, they're not really "making markets" in the real sense of the phrase i.e. they can't veer away from the actual benchmark, i.e. prices generated in the interbank world.

Quoting Mairan
If not can some one explain how the forex market makers/brokers work?
In any case, Google "how do retail forex brokers work". It's right there on the first page, believe it or not.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #654
  • Mar 24, 2015 11:00pm Mar 24, 2015 11:00pm
Thank you skenobi for the help... So most, if not all, retail forex brokers make market meaning they provide bid ask price similar to the EBS and Reuters price and when retail trader trade they will be either the counter party of that trade or supply from their inventory, is it right??
Quoting skenobi
{quote} Directly or indirectly, yes. Even if some retail brokers are actually market makers in disguise, they're not really "making markets" in the real sense of the phrase i.e. they can't veer away from the actual benchmark, i.e. prices generated in the interbank world. {quote} In any case, Google "how do retail forex brokers work". It's right there on the first page, believe it or not.
  • #655
  • Mar 24, 2015 11:24pm Mar 24, 2015 11:24pm
Quoting Mairan
Thank you skenobi for the help... So most, if not all, retail forex brokers make market meaning they provide bid ask price similar to the EBS and Reuters price and when retail trader trade they will be either the counter party of that trade or supply from their inventory, is it right?? {quote}
If that's what some retail brokers have been observed to be doing, then I guess it's not surprising anyone would come to that conclusion.

I cannot confirm it as I would not know i.e. I've never worked for a retail broker. I can only accurately comment on things I'm intimately familiar with i.e. the workings of the institutional forex trading world.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #656
  • Mar 25, 2015 12:13am Mar 25, 2015 12:13am
Could any of you institutional guys please point out a significantly large stop hunt on one of the majors that has occurred recently?
  • #657
  • Mar 25, 2015 1:04am Mar 25, 2015 1:04am
Quoting Stinky
Could any of you institutional guys please point out a significantly large stop hunt on one of the majors that has occurred recently?
My two cents (others may have a different take on it): You can pull up your own sub-60 minute chart in any pair and check for any spikes yourself.

Any spike that went on to stay in the new trend might have started as a stop run but maybe took on a new life on its own.

Any spike that occurs near Session opens is likely a stop run. A spike that tries to test a nearby S/R zone with plenty of PAST order flow history is likely a stop run.

A spike that happens and then "reverts back to mean" soon after for whatever reason and for however brief a time, is also more than likely a stop run (the intent at that moment in time). "Intent" is fluid, by the way.

By the way, a stop run doesn't have to be large. A 20 pip sprint to a significant S/R can be a stop run.

In any case, I'm not sure I see any value in being able to point to any price pattern in the PAST and then classifying it a "stop run". A spike is just a spike, and a trader will just have to move on.

Am I missing something here, Stinky?
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #658
  • Mar 25, 2015 1:46am Mar 25, 2015 1:46am
Quoting Stinky
Could any of you institutional guys please point out a significantly large stop hunt on one of the majors that has occurred recently?
This is probably is a stop hunt. skenobi, explained very well how you can identify a stop hunt - any large tail candlestick arount support/resistance.

Mairan, the MM brokers are the conterparty to the trades of their clients. They don't hide this fact. In the past some of them were playing dirty tricks but probably the competition did its job and they are out of the market.
Soe of the MM brokers divide their clients in two groups - winners and losers. For the first group, the trades are covered with the liquidity providers. For the second group ........................................
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  • #659
  • Mar 25, 2015 3:07am Mar 25, 2015 3:07am
Quoting skenobi
{quote}In any case, I'm not sure I see any value in being able to point to any price pattern in the PAST and then classifying it a "stop run". A spike is just a spike, and a trader will just have to move on.

Am I missing something here, Stinky?
I was just curious to know if I've been able to predict any stop hunts. I could have predicted srmfx's example but I was off to bed before that one

Thanks guys.
  • #660
  • Mar 25, 2015 3:41am Mar 25, 2015 3:41am
Quoting Stinky
{quote} I was just curious to know if I've been able to predict any stop hunts. I could have predicted srmfx's example but I was off to bed before that one Thanks guys.
You can have an idea where and when the stop hunt could be engineered. If you are not right, the stop should protect you.
For example, if the sentiment is bullish, you can expect stop hunt around support levels. The big guys want to buy and need sell orders. Stops below the current market prices become sell market orders after they are activated. You can wait for e reversal candle or watch the quotes. The tick chart should look like this one. You can enter aggressively after the stops are hit or wait for the first pullback.
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