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Brokers and Banks as an Institutional Trader 4 replies

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Attachments: Is anyone here an institutional trader?
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Is anyone here an institutional trader?

All seriousness aside.... predicting stop hunts and predicting how it plays out if or when they happen would be a mad skill to have! I wish I had it back in the day!

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But alas, the vulture in me prefers to wait for the killing to stop before swooping in...

Good for you, Stinky!
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
All seriousness aside.... predicting stop hunts and predicting how it plays out if or when they happen would be a mad skill to have!
Actually it's not that mad and strange as it may seem. Order flow trading gives you the opportunity to use tighter stops and enter at the beginning of the price move. Of course you have to know the market very well and be very quick sometimes.
It's not important what your trading strategy is. More important is to be YOUR trading strategy.
Was a pit trader for 16 years in London.

Tools??? LOL!! - use your brain and get a good grounding in macroeconomics.
Quoting Taffy
Was a pit trader for 16 years in London. Tools??? LOL!! - use your brain and get a good grounding in macroeconomics.
Bro, care to share more of your experience, it will greatly help everyone understand the differences between different institution traders as it seems some of the professional traders here are technical bias, while you emphasized good grounding macroeconomics.

Thanks in advance.
The only winner is the one who survive the longest...
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?

The further away from current price you go, the bigger and more orders there are likely to be.

EURUSD 1H Sentiment still very much down, big sell limits sitting on big round number, 1.10000
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All posts are my personal opinion
Thank you Skenobi. That is what i understood from the research i did on how forex retail brokers work. Some one else here who have retail broker experience can shed some light????
Quoting skenobi
{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.
Hi Skenobi,

I have another question I was wondering if you can shed some light. I was reading efxnews.com and they seem to be posting institutional strategies citing UBS, Morgan Stanley, Goldman Sachs, etc. I'm not really sure what to make of this in terms of the reason why these bigger players are giving market views.

This piece, for example, states EURUSD hitting 0.95 in November. Is this some kind of manipulation to encourage others to sell off and increase the likeliness of hitting this target? Also, efxnews sells a premium service so I guess it is possible they deal directly with this players.

Thanks
Thank you, for some reason i missed your comments below. I just saw your comment now. That is exactly what i learned from googling... MM brokers are the counterparty of their clients and play dirty tricks. ECN brokers have the choice of either taking the other side or passing it directly to interbank MM.
Quoting srmfx
{quote} 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...
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  • Edited Mar 26, 2015 12:07am Mar 25, 2015 8:55pm | Edited Mar 26, 2015 12:07am
Quoting srmfx
{quote} Actually it's not that mad and strange as it may seem. Order flow trading gives you the opportunity to use tighter stops and enter at the beginning of the price move. Of course you have to know the market very well and be very quick sometimes. It's not important what your trading strategy is. More important is to be YOUR trading strategy.
No worries sir! I meant "mad" in a good way! It's a desirable skill to have, for sure! Hope you've been having a good week!

Quoting Mairan
Thank you Skenobi. That is what i understood from the research i did on how forex retail brokers work. Some one else here who have retail broker experience can shed some light????
May I suggest another thread for that? With all due respect to the threadstarter, maybe we should keep discussion here focused on institutional trading.

Quoting jhehe
Hi Skenobi, I have another question I was wondering if you can shed some light. I was reading efxnews.com and they seem to be posting institutional strategies citing UBS, Morgan Stanley, Goldman Sachs, etc. I'm not really sure what to make of this in terms of the reason why these bigger players are giving market views.
They're just "views", "opinions", and "suggested strategies". Likely provided by in-house analysts and economists, not traders. Sometimes analyst views are independent, other times possibly in collusion with the traders they work with. It's up to you how you want to take it. Some traders find it useful to trade, some useful to fade.

I only take a look at the levels mentioned in the "opinions" to compare with and confirm my own S/R zones. Beyond that, I don't follow "suggestions" and "recommendations".

Quoting jhehe
This piece, for example, states EURUSD hitting 0.95 in November.
An opinion.

Quoting jhehe
Is this some kind of manipulation to encourage others to sell off and increase the likeliness of hitting this target?
Or maybe they're "manipulating" YOU so you would fade their "opinion" and you BUY so that THEY could have better levels to SELL at?

There are so many ways to skin this cat.

Bottomline: you make your own assessments of these opinions, and more importantly, have your OWN opinions so you don't feel "manipulated" all the time.

By the way, let's not forget it's not retail traders they're trying to convince; it's their institutional counterparties and customers. Retail traders cannot affect the market.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Another stop hunt? Price breaks above the previous hi and then goes back down. Candlestick with a large upper shadow is a sign that probably the stops were hit for liquidity purposes.
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Thanks Skenobi, this clears it up nicely. Did a bit more searching on this and found that goldman's predictions did have quite a few failures. Guess intentional or unintentiona, who really knows...good advice, definitely relying on my own analysis.
Quoting jhehe
Thanks Skenobi, this clears it up nicely. Did a bit more searching on this and found that goldman's predictions did have quite a few failures. Guess intentional or unintentiona, who really knows...good advice, definitely relying on my own analysis.
One more thing.. (and I'm not saying this to jhehe, coz I think he's got his shit together, I hope): Don't bother keeping track of GS's failures or successes in predicting, or their intentions or non-intentions and whatnot... WHO DA FUQ CARES?!

It doesn't matter if THEY got things wrong more times (prediction-wise) than you because, bottomline, they'll always make more money than you! So you can get off that high horse, thanks very much.

I'll give you an example: Let's say GS (for example) predicted EURUSD to go to 95 cents by November, and by November, EURUSD didn't even go below 1 dollar but instead went gangbusters all the way to 1.2000. It doesn't mean the buy orders at 95 cents weren't there. It just means that between the time of the prediction and the targeted November date, buyers (including GS) came back in force. That's ALL it is!

Predictions are pointless because between now and THEN, ANYTHING CAN HAPPEN!

In summary: by all means read the research if you want, note the targeted levels mentioned, but don't for one minute believe price will prosecute those levels the way they predicted.
I'm not trying to convince anyone. I'm not in the "convincing" business.
what is your advice regarding timing of trading? Do traders need to predict, position themself for long term trading? in short, long_swing or short term trading? Thanks, appreciate your experience.
Quoting Naokia980
what is your advice regarding timing of trading? Do traders need to predict, position themself for long term trading? in short, long_swing or short term trading? Thanks, appreciate your experience.
Time frame selection is strictly personal. Don't try to copy the other traders. Create your own trading style which is corresponding to your personality.
Quoting skenobi
{quote} coz I think he's got his shit together, I hope
Me hope so too. I've sought to understand the macro-picture as I feel like I was too absorbed into all that price action, indicator, and TA side of trading.

News wise, I've usually stayed away from opinions and commentary. Although I cheat myself to get a good laugh at things like CNBC $0 oil prediction. Currently seeking to gain a better understanding of how the various economic indicators fit together.
sorry if this was already answered, but the thread has close to 700 posts and the answers are quite big, but why would I or someone be hired by a bank to trade if I could just hypothetically trade by myself grow my account and trade these huge orders like 50~100 million and make my own money without having to wake up everyday early and have a tough quota to meet?

thanks
Quoting jhehe
{quote} Me hope so too. I've sought to understand the macro-picture as I feel like I was too absorbed into all that price action, indicator, and TA side of trading. News wise, I've usually stayed away from opinions and commentary. Although I cheat myself to get a good laugh at things like CNBC $0 oil prediction. Currently seeking to gain a better understanding of how the various economic indicators fit together.
I tend to discourage understanding macro if all it does is distract the trader from what's happening right now, or needlessly second-guess the trader from pulling the trigger on a short-term trade.

Having said that, by all means please continue your study of economics. There's nothing wrong with having fundamental subtext in the back of your mind when trading short-term views.

Just be aware that the only types of traders who actually USE economics to form the basis of trading decisions are macro-based hedge funds, institutional traders on long term structural trades desks (there are not many of these), individual macro traders with deep pockets and strong stomachs, and junior institutional traders who think they know better before falling flat on their faces (taking into account that there ARE talented ones out there).

If you're none of the above, continue with economic studies, but for now trade reactions to data rather than the data themselves.

Quoting fosterlince
sorry if this was already answered, but the thread has close to 700 posts and the answers are quite big, but why would I or someone be hired by a bank to trade if I could just hypothetically trade by myself grow my account and trade these huge orders like 50~100 million and make my own money without having to wake up everyday early and have a tough quota to meet? thanks
If your question had been "why would I even LOOK for a bank trading job if I could just hypothetically trade by myself grow my account and trade these huge orders like 50~100 million and make my own money without having to wake up everyday early and have a tough quota to meet?" then the answer is already stated quite clearly in the question.

But seriously, you would only look for a bank trading job if "the action is the juice" for some of you. Otherwise, there's really no point.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting Binyamin
Hi all. Interesting thread. I have been trading pure price action for a while. I can't seem to explain why certain price action repeats with so much frequency and in every timeframe I have investigated. 1 minute chart to monthly chart and in every pair.
If it's an observable pattern, maybe you should just trade it and test it out. You can research the whys and the whatfors later.

Quoting Binyamin
The folks in Price is everything thread believe that market is always manipulated by IT. I on the other hand can't be sure... Can one you IT please explain why is this?
Explain why WHAT is?

Why you can't be sure? Or why the market is always manipulated by IT? or Why people believe that the market is manipulated by IT?

The first question only you can answer. The 2nd question is a loaded question which assumes that markets ARE always manipulated by IT. I don't think that question deserves an answer for the obvious reason that it IS a loaded question.

The 3rd question is a question only the people on that other thread can answer best.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} Just be aware that the only types of traders who actually USE economics to form the basis of trading decisions are macro-based hedge funds, institutional traders on long term structural trades desks (there are not many of these), individual macro traders with deep pockets and strong stomachs, and junior institutional traders who think they know better before falling flat on their faces (taking into account that there ARE talented ones out there).

Thanks Bro, this clearly quenched some of my doubts on institution traders, because the traders I saw when I was working for a sovereign wealth fund are all macro and fundamental guys, and surprisingly, their quarterly forecast was quite accurate. Only those traders I saw in Reuters and Bloomberg are a bit different.
The only winner is the one who survive the longest...
Quoting skenobi
{quote} Explain why WHAT is? Why you can't be sure? Or why the market is always manipulated by IT? or Why people believe that the market is manipulated by IT? The first question only you can answer. The 2nd question is a loaded question which assumes that markets ARE always manipulated by IT. I don't think that question deserves an answer for that obvious reason. The 3rd question is a question only the people on that other thread can answer best.
Sorry I wasn't clear. According to some of them in PIE thread these patterns are intently made by IT, ways to trick retailers into giving them liquidity.... So showing an example of how supposedly IT manipulate the market, I just want to know if any of IT/ex IT can confirm if it is true or rubbish.

Edit: Sorry deleted that post here is the link to the example
http://www.forexfactory.com/showthre...35#post8188635

Btw I am not the only one that observe this particular pattern, it is taught openly in that thread... I just want to know if it is really created by IT....
Riding the order flow
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