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  • #701
  • Edited Apr 17, 2015 7:43am Apr 16, 2015 10:14pm | Edited Apr 17, 2015 7:43am
Quoting MetroFX
{quote} Really? have never heard or seem anything like that. I know today is everyday more a software market for many guys, not sure if ITs could be going all out on the retail FX customer many of those retail orders never get to a Bank or PB actually since many brokers take the risk on their book. There are tons of algos for many diferent types of "financial institutions" we are getting at a pretty crazy point now.
there are many mid markets (these are called mid markets because a trade happen at the mid price when two parties show opposite side of interest and also there is a pnl adjustment so each participant doesnt make any money from trading with other participants. kind of like darkpool but with pnl adjustments). One such market is/was lavafx (there is another one more established now and banks trade large % of their hedging on these platforms).
Think : Trade : Live Life
  • #702
  • Apr 17, 2015 8:17am Apr 17, 2015 8:17am
Quoting stt
{quote} there are many mid markets (these are called mid markets because a trade happen at the mid price when two parties show opposite side of interest and also there is a pnl adjustment so each participant doesnt make any money from trading with other participants. kind of like darkpool but with pnl adjustments). One such market is/was lavafx (there is another one more established now and banks trade large % of their hedging on these platforms).
OK weird thing to me, because if the price is in the middle it should become the bid / ask until he gets filled but i trust you havent heard of it only.
  • #703
  • Apr 18, 2015 3:35am Apr 18, 2015 3:35am
Dear Skenobi

The internet is awash with videos and articles about how to draw S/R lines but I still seem to struggle with this.

As drawing good S/R lines is a core of trading price action, are you able to recommend a good source to learn this skill?

Many thanks

Kind regards
Robert
  • #704
  • Apr 18, 2015 9:35am Apr 18, 2015 9:35am
Quoting MetroFX
{quote} OK weird thing to me, because if the price is in the middle it should become the bid / ask until he gets filled but i trust you havent heard of it only.
sorry but i think you are not thinking how banks operates and what their needs are. did you read about lavafx and what they do? it is not about putitng bid at mid price and then seeing price move to mid. it is about banks hedging their risk with each other at prices such that at the end of day no bank moke or loose money from their trades with other banks. nothing to do with public limit order market...
Think : Trade : Live Life
  • #705
  • Apr 18, 2015 10:22am Apr 18, 2015 10:22am
Quoting RobertBazil
Dear Skenobi The internet is awash with videos and articles about how to draw S/R lines but I still seem to struggle with this. As drawing good S/R lines is a core of trading price action, are you able to recommend a good source to learn this skill? Many thanks Kind regards Robert
In the first place, stop using words like "good" or "bad" when describing S/Rs. S/Rs are just S/Rs. Sometimes price will successfully test S/Rs and break thru, sometimes price will fail to test S/Rs and then bounce back or retrace.

Just because an S/R broke one time. doesn't mean the S/R wasn't there at the time or in the past, or won't be there in the future. Whether you believe it or not, price has "memory".

I don't know how other institutionals draw S/Rs. My old bosses taught me to pull up a Daily line chart (no bars or candles) and eyeball the horizontal zones where prices have tested (successfully or not) from below and above, including significant highs and lows. The more tests, the better. And then I would pull up an hourly line chart and do the same, although now with MT4, have learnt to use H4 as well.

The zones are where interbank and corporate orders have clustered before and WILL likely be remembered in future order books.

Naturally a rookie's first tries will leave his charts riddled with potentially needless S/R lines. After a good long spell of practice, a trader will instinctively know what lines to ignore. The "struggle", as you put it, is unavoidable. No shortcuts, I'm afraid.

Of course, knowing where the zones are is only part of the story. Knowing how to TRADE the zones is the tricky bit. Can't help you there either, I fear.

You will just have to comb forums like these for pointers on how to trade breakouts and/or retracements. I'm pretty sure those methods work for SOMEbody out there.

Good luck!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #706
  • Apr 18, 2015 10:39am Apr 18, 2015 10:39am
i guess i am http://www.tradestation.com/en/produ...forex-services
  • #707
  • Apr 18, 2015 10:42am Apr 18, 2015 10:42am
Quoting PoundTrader
i guess i am http://www.tradestation.com/en/produ...forex-services
lol i just trade on there active plan http://www.tradestation.com/pricing/...trader-pricing
  • #708
  • Apr 18, 2015 1:24pm Apr 18, 2015 1:24pm
Quoting skenobi
{quote} In the first place, stop using words like "good" or "bad" when describing S/Rs. S/Rs are just S/Rs. Sometimes price will successfully test S/Rs and break thru, sometimes price will fail to test S/Rs and then bounce back or retrace. Just because an S/R broke one time. doesn't mean the S/R wasn't there at the time or in the past, or won't be there in the future. Whether you believe it or not, price has "memory". I don't know how other institutionals draw S/Rs. My old bosses taught me to pull up a Daily line chart (no bars or candles) and eyeball...
Dear Skenobi

Thank you very much for the response.

What I mean by good is "accurate", in as much as the S/R line reflects the location of the clusters accurately. Sorry for any misunderstanding.

I genuinely appreciate your advice and will continue to work hard to become better at this.

Kind regards
Robert
  • #709
  • Apr 18, 2015 1:49pm Apr 18, 2015 1:49pm
Quoting RobertBazil
What I mean by good is "accurate", in as much as the S/R line reflects the location of the clusters accurately.
Robert, if I may lend a little here.

What makes your question incredibly difficult to answer is your particular frame of reference.

Where skenobi attempted to lend his logic, it is frame dependent on longer timeframes and by his examples, use the D1, H4 and H1 in attempts to site in these values.

This can be great for people who trade for a living as they can spend copious amounts of time in doing this, will have an idea of a break out strategy and manage subsequent trades based on the Support/Resistance holding or what to do in the event of a Chart Break Out.

Along with this, what comes into play is your idea of profit/risk management.

If you are used to trading in your evenings, after work/school/(insert your normal daily activity here), then you are trading from a limited standpoint for both time and profit. You want to manage your risk by not allowing trades to be open when you cannot be there to watch, so, you may have an idea that 20-30 pips is a good range for profit.

If you applied this to the Daily Support and Resistance charts, you may actually be looking at a stop loss or cost average placement, where you may be 100 pips in the red...(an example, don't take for literal)...SL 100, to a TP 20, makes very little sense, again, speaking from a limited frame of reference.

Everybody wants to learn from the pros, and as you have already stated, there is a plethora of places to find information on the WWW, but you cannot find what you want.

Could the reason for this actually be, that your frame of reference, your idea of risk management, your idea of profit, isn't what you see in these sources?

IF you want to study supply and demand...the best thing to do, is to start at the basics. By basics, I mean the ABSOLUTE basics of market.

Starting point, understand the Value of a Candle and what it represents by way of it telling you the range of market, where the buyers are, and where the sellers sit. From here, try to gain a sense of trend as it applies to the frame of reference you can apply to market...Are you trading a session? Are you trading for a couple of hours before you head to work? Are you wanting to Swing trade for days/weeks on end?

Once you have gained an idea of the Structure of a Candle, and the general direction...finding the support and resistance ranges becomes a little easier.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #710
  • Apr 18, 2015 2:15pm Apr 18, 2015 2:15pm
Quoting Magix
{quote} Robert, if I may lend a little here. What makes your question incredibly difficult to answer is your particular frame of reference. Where skenobi attempted to lend his logic, it is frame dependent on longer timeframes and by his examples, use the D1, H4 and H1 in attempts to site in these values. This can be great for people who trade for a living as they can spend copious amounts of time in doing this, will have an idea of a break out strategy and manage subsequent trades based on the Support/Resistance holding or what to do in the event...
Dear Magix

Thank you very much for this.

I totally understand that my trading parameters will affect what outcomes I am looking for.

In my case, I trade for 3-4 hours after work. I am a director in a medium sized organisation and I want to be able to build up some capital incrementally over the next 10 years. Because I am active during late GMT, I try to look at H1 timeframes, rather than H4 and above. H4 would mean looking at bars that close at 6:00pm London time and then again 10:00pm London time. D1 would mean NY close at 10:00pm BST. The 10:00pm is no good for me because I am by then tucked up in bed (5:00am wake up for a demanding job).

So..H1 timeframes allow me to look at bars closing at 7:00pm, 8:00pm and 9:00pm BST.

Because I am trading H1 and I am really strict about risk management, I usually trade only 1% of equity and aim for TP to be 1.2 to 1.5 of the SL. I do not pre-determine my SL because I believe that should depend on where price is and where I think it may go. I hope this is a sensible approach.

My question to Skenobi was to learn more about how I can determine the most accurate levels to place my horizontal S/R lines. How I then trade them, as he stated, is indeed another matter.

I am genuinely just trying to learn from experts and I have no intention of appearing either flippant, ignorant or, at worst, disrespectful.

Anybody who can extract consistent profit from the Forex market undoubtedly has my deepest respect.

Kind regards
Robert
  • #711
  • Apr 18, 2015 2:30pm Apr 18, 2015 2:30pm
Quoting RobertBazil
{quote} Dear Magix Thank you very much for this. I totally understand that my trading parameters will affect what outcomes I am looking for. In my case, I trade for 3-4 hours after work. I am a director in a medium sized organisation and I want to be able to build up some capital incrementally over the next 10 years. Because I am active during late GMT, I try to look at H1 timeframes, rather than H4 and above. H4 would mean looking at bars that close at 6:00pm London time and then again 10:00pm London time. D1 would mean NY close at 10:00pm...
Closes at 8pm.
  • #712
  • Edited 2:48pm Apr 18, 2015 2:33pm | Edited 2:48pm
Quoting claudia1
{quote} Closes at 8pm.
I think that might depend on his broker's offset.
  • #713
  • Apr 18, 2015 2:39pm Apr 18, 2015 2:39pm
Quoting honestknave
{quote} I think that might depend on his broker's offset.
Agreed but he says trading gmt so .... just pointing it out as can make a difference on 4h.
  • #714
  • Apr 18, 2015 2:57pm Apr 18, 2015 2:57pm
Quoting RobertBazil
I am genuinely just trying to learn from experts and I have no intention of appearing either flippant, ignorant or, at worst, disrespectful.
I wasn't thinking that you were attempting any of the above...just more so seems a combination of both frustration mixed with a genuine request for knowledge.

Quoting RobertBazil
Because I am active during late GMT, I try to look at H1 timeframes, rather than H4 and above. H4 would mean looking at bars that close at 6:00pm London time and then again 10:00pm London time. D1 would mean NY close at 10:00pm BST.
This statement here, is probably your greatest asset!!

You know when you are trading...but this must lend itself to "What you are Trading"!

It would seem to me that you are more so trading the NY session for a few hours in your evening, but missing out on NY Close. Typically, not a bad thing, because NY roll over is never a great time to trade, so, tucking into your footie jammies and heading off for sleepsville, a very good thing to do!

NY session is typically a decent session to be trading, in that it typically never goes against the direction from London on the day, so, picking the trend, typically an easier thing to do...(with exception to large press releases during the NY session outside of the NY/London cross).

So, you know direction, you want to trade the Hourly charts...this still boils down to understanding the structure of a candle and how to find a place to draw these lines.

Here's a couple of charts for perspective and hopefully lending itself to support and resistance by use of the H1 time frame.

Both of these charts are the M1, but have the H1 candles superimposed, one with the benefit of M1 candles, one without. IF you were just looking at a single session, like the H1, can you still see the support and resistance...If you look at the H1 with the benefit of another time frame, can you get a sense of resistance by being the close of an hourly candle and gain the sense that when resistance is broken, it becomes support, much the same as when support is broken, it becomes resistance.

In my previous post about understanding the frame of reference and structure of the candle, this is more so how I view it....

When skenobi mentioned that he uses line graphs off of the D1, H4 and H1, I do have a sense that he is doing similar but as applied to a longer frame of reference, but in this, perhaps seeing if he is willing to expand, might give you the answer you seek.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: s1.png Size: 30 KB
Click to Enlarge Name: s3.png Size: 47 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #715
  • Apr 18, 2015 3:12pm Apr 18, 2015 3:12pm
A longer look, but much the same idea.

5 points on the chart, yellow line being the Monthly Open on EURUSD.

1. Support is tested and holds.
2. Support is tested and folds.
3. Once support is lost, it gets tested as resistance.
4. Resistance is now tested and fails.
5. Once resistance fails, it gets tested as support.

1 line, structure of the candle.

Supply and demand in a nutshell.
Attached Image (click to enlarge)
Click to Enlarge Name: 2nd.png Size: 52 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #716
  • Apr 18, 2015 3:19pm Apr 18, 2015 3:19pm
Quoting Magix
{quote} I wasn't thinking that you were attempting any of the above...just more so seems a combination of both frustration mixed with a genuine request for knowledge. {quote} This statement here, is probably your greatest asset!! You know when you are trading...but this must lend itself to "What you are Trading"! It would seem to me that you are more so trading the NY session for a few hours in your evening, but missing out on NY Close. Typically, not a bad thing, because NY roll over is never a great time to trade, so, tucking into your footie...
Dear Magix

Thank you very much. This is exactly what I was trying to arrive at, the actual mechanics of what visual methods I can use to help me place more accurate S/R levels. Your transposition of the higher timeframe candles really helps. I also tried viewing the charts zoomed out, but with a line graph. I have to say that was very helpful advice from Skenobi and I think improved my perception almost immediately.

Yes, I suppose I am trading the NY session, without actually witnessing NY Close. So that means most trades I conduct during the evening (if they have not closed whilst I am awake) usually migrate into the Asian sessions and sometimes onward to London open the next morning (god forbid).

Just to address HonestKnave and Claudia1, it is BST in London at the moment so NY closes at 10:00pm BST on a weekday (my previous reference to GMT was an error). I use an Australian broker, primarily because of the regulatory protection in that jurisdiction.

Thank you all for your generous time and truly helpful guidance.

Kind regards
Robert
  • #717
  • Apr 18, 2015 3:32pm Apr 18, 2015 3:32pm
Quoting RobertBazil
Your transposition of the higher timeframe candles really helps. I also tried viewing the charts zoomed out, but with a line graph. I have to say that was very helpful advice from Skenobi and I think improved my perception almost immediately.
By whichever methodology you find most suiting and while we are in the off market hours...

Go back through your historical charts and mark your supply and demand levels. From there, try to gain a sense of when you would cut loss and when you would take profit, and either mark these on a note pad or through the use of a trade journal.

Repetition is the mother of knowledge. Going through these time and time again will lend itself to your live trading.

As you do take live trades, annotate your chart by the logic you have used and continue this until you no longer find it relevant or of any value...for myself personally, I still keep trade logs...

It's about 2.5 hours after Beer O'Clock here...time is tickin away!

Have a great rest of your weekend!

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #718
  • Apr 18, 2015 3:37pm Apr 18, 2015 3:37pm
Quoting Magix
{quote} By whichever methodology you find most suiting and while we are in the off market hours... Go back through your historical charts and mark your supply and demand levels. From there, try to gain a sense of when you would cut loss and when you would take profit, and either mark these on a note pad or through the use of a trade journal. Repetition is the mother of knowledge. Going through these time and time again will lend itself to your live trading. As you do take live trades, annotate your chart by the logic you have used and continue this...
Dear Magix

Thank you very much. I found the second image you posted equally useful.

I will do exactly as you advise. By the way, I already keep a journal and support that with screenshots.

Enjoy your beer and your undoubtedly well-earned weekend.

Kind regards
Robert
  • #719
  • Apr 19, 2015 9:19am Apr 19, 2015 9:19am
Quoting skenobi
{quote} Institutional traders get their liquidity from each other, not from retail traders. Whether the manipulation story is true or rubbish, if you had read this thread, you would find there are still opposite camps of belief, neither one of which contribute anything to a trader's bottomline. Let's just say for argument's sake, I answer your question and I say it's "true". My question to you is, "Does my answer help you make money?"
Hello Skenobi

Thanks for sharing your insides ....
One questions always wonders me, who trades during the weekends? We always see gap up or down when market opens on Monday. If institutions trade during the weekend so basically traders do not have weekend off?

I'd appreciate your response.

TB
Journey is more important than destination
  • #720
  • Apr 19, 2015 9:40am Apr 19, 2015 9:40am
Quoting Magix
A longer look, but much the same idea. 5 points on the chart, yellow line being the Monthly Open on EURUSD. 1. Support is tested and holds. 2. Support is tested and folds. 3. Once support is lost, it gets tested as resistance. 4. Resistance is now tested and fails. 5. Once resistance fails, it gets tested as support. 1 line, structure of the candle. Supply and demand in a nutshell. {image}
yes it is
don't predict direction, but dance with flow of water
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