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5 years and still no strategy

  • #1,981
  • May 20, 2017 4:55am May 20, 2017 4:55am
Quoting VEEFX
{quote} and one 'offshore' regulated broker consistently runs price about 4-6 pips away from FXCM's raw pricing moving tick by tick and then pausing when a new order s submitted to manipulate price for a second... can you naked eye catch this in real time? can you trading history reveal? can your historical pricing feed reveal this every happening? {quote} unnecessary risk if they manipulate the price feed too often - FALSE.. it happens VERY frequency all day every day for fraction of seconds! unnecessary risk if they manipulate the price feed too...
Quoting yousername
Hidden
Somehow i feel my business and brokerage business has similarity. Monopoly. In my business i have several different car rental websites with different name but the same owner.
1 liquidity provider has several LPs and all directed to one.
This is not investment/trading advise. Will not hold accountable for loss
  • #1,982
  • Edited 5:18am May 20, 2017 5:02am | Edited 5:18am
Quoting VEEFX
{quote} my challenge to WolGod or volume traders - show me how you trade a single chart profitable based on volume of single doji or single candle (current/previous or whatever you fancy). How is volume EVERYTHING? How can volume determine trend direction? How can volume determine ANYTHING apart from random group orgy between buyers and sellers? How is tick considered volume? what is a tick in relation to actual order flow? If there is not a single trader on your brokers plaatform at say 5:00am and then a big GBPUSD order comes in at 5:00:01am,...
Hey VEEFX

As we are dealing with an Auction type market where price is dictated by the laws of supply and demand, volume is essential to understanding what the participants are doing in the market. Whilest I agree with you volume is definitely not everything it certainly does offer strong clues as to future price movements. Problem is with almost all retail traders is that they do not have the models that the institutions use to determine what value is. Institutions will almost always only ever deal when there is a discount offered and will very rarely pay up. Retail traders using price lagging indicators dont know if what they are buying is cheap or expensive and therefore cannot know if they will be able to sell it at a future date for a profit.

However retail traders can use volume for clues as to where value lies and where price will trade to next and this is why:

Understanding who is active and in control of the in the market is the first step.
If the market makers (called day time traders in market profile theory) are in control they will move the market to a high volume area because this is how they make their money through churn. They will get the most churn where there are areas of liquidity which are usually previous high vol areas as this is where traders where interested in doing business before so they will go and test these areas to see if there is any more business available to them. If they move the market there and there is no volume they will move the market to the next area of liquidity. There is no one there to sell their business too. They will not hang around at that price.
This is how any business works. Go to a market try sell your stuff if no one is buying you are not going to hang around. You will go to the next market.

Market makers like the market when it ranges as they then dont have to take directional risk and their books are balanced. They dont have to pack up their stuff and find a new market.

When Other Time frame traders (lets call them institutions) become engaged in the market when it is trading at a discount to value. They will accumulate stock at a discounted price and then drive price into a breakout trend. This is how they make their money.
The will buy on a down tick and they will sell on an uptick almost always. So once the have finished accumulating and price breaks out and starts tending they will sell into that uptrend and get rid of their stock. Market makers (who always take the other side of the trade) will pull their liquidity from the market as they will not want to buy into that uptrend thereby accelerating the move up. Sellers who are having their stops triggered have to close their positions and therefore become buyers also add fuel to the move.

Where does price go to? It will either go to the next value area (high volume area) where market makers will become engaged again and form a new balance area or if volume exhausts price will trade back down to the previous value area where the market makers will become engaged again.
The market will do this over and over again. Trade from one value area to the next where it will either accept or reject that price. If it accepts it will form a new balance area and will stay there until the volume dries up. If it rejects it will either trade to the next volume area lower or the volume area higher. Which one will it go to is where the skill comes in and looking at trends, pin bars (rejections) and market profile helps.

So understanding who is in control of the market , if volume is increasing or decreasing and also vitally important when they are dealing (ie volume cycles) is essential to understanding any auction type market.

Whilest volume is not 100% accurate in spot FX it is accurate enough to perform analysis on volume trends.

In addition its also difficult to read volume without having level II data to see inside the bars and do an analysis of Cumulative Delta.
Volume Analysis only shows you what the active buyers and sellers at the Bid and Ask price are doing. It will not show you what the buyers and sellers who have LIMIT orders in the market are doing. Understanding cumulative delta shows you if price is being absorbed at the limit or not or if there has been a withdrawal of liquidity by the market makers.

Here is an example on volume analysis:

Attached Image (click to enlarge)
Click to Enlarge Name: MDBZZov.png Size: 111 KB


Price has been in a strong uptrend and rejects with a pin bar. However in that rejection there is neither a high volume node showing stopping volume nor is there exhaustion of price (see inside the blue box) . Price will go back down to test the previous high volume node (purple box) however on the way down you can see that volume is dropping off. When they get their and they find that there is no more business there they will go back up to test the higher area. You know they will go back up as price has already rejected the area below (remember you are in an uptrend).
Now as price goes back up volume drops off once more. No more business up there so price trades back into value (this is the POC point of control) and happens to be a nice round number where the market markers will find liquidity. However once again vol absolutely dies.
They have already tested the area above them and found no business so now they will take the market back down again till they find it.

Now look at this example:

Attached Image (click to enlarge)
Click to Enlarge Name: 13YMvJa.png Size: 76 KB


Price is in an uptrend and you get a spike in volume with a high volume node after which volume exhausts. See the inside the blue box and compare that to the pin bar above volume just disappears and rejects that area. When price trades back down to that high volume node it is NOT going to go back up and test. The market markers know there is no business there. Why would they go back? Volume increases as price trades back down so it will continue in that direction.

I havent gone into cumulative delta but that will offer clues too.

Its all about supply and demand, who is in control, where value is and the time of the day.
Boxing clever since 76.
  • #1,983
  • May 20, 2017 5:11am May 20, 2017 5:11am
Quoting copi88
{quote} Hey VEEFX As we are dealing with an Auction type market where price is dictated by the laws of supply and demand, volume is essential to understanding what the participants are doing in the market. Whilest I agree with you volume is definitely not everything it certainly does offer strong clues as to future price movements. Problem is with almost all retail traders is that they do not have the models that the institutions use to determine what value is. Institutions will almost always only ever deal when there is a discount offered and will...

Brilliant, need to re-read it a few times. Thanks mate.
  • #1,984
  • May 20, 2017 6:31am May 20, 2017 6:31am
Quoting Mingary
{quote} The number of ticks mean something ...
The only thing I'm curious about: Why do you bother with random entries when you know this?

k
  • #1,985
  • May 20, 2017 6:39am May 20, 2017 6:39am
Quoting MaxenshteinD
{quote} Yep, thats one of the many reasons why I don't bother with the VolumeSpreadAnalysis pseudo intellectual masturbation of retail forex. As someone said : "If you can't explain why something works in a few simple words, than either you are bull shitting, or don't know how it works". I never saw any clear algorithm for trading retail forex price feed based on volume. The funny part is, most guys who spend hours with bs such as the glamorous term "price action setups" and the mentioned V.S.A., are so angry and easily rage because they understand...
This isn't true. The 'price action SETUPS' usually reveal that those 30-50 pip movements are about to occur and often hint as to the direction. That's why they are called setups. The 30-50 pip movements don't invalidate the analysis... they are what you're trying to find. They are what you're hunting for.
"The fun is in the hunt. Not the kill."
  • #1,986
  • May 20, 2017 6:41am May 20, 2017 6:41am
Quoting copi88
{quote} Hey VEEFX As we are dealing with an Auction type market where price is dictated by the laws of supply and demand, volume is essential to understanding what the participants are doing in the market. Whilest I agree with you volume is definitely not everything it certainly does offer strong clues as to future price movements. Problem is with almost all retail traders is that they do not have the models that the institutions use to determine what value is. Institutions will almost always only ever deal when there is a discount offered and will...
Thank you!

From your screeshots, How did you identify those small blue boxes which some of it was highlighted inside the purple and red box?
This is not investment/trading advise. Will not hold accountable for loss
  • #1,987
  • Edited 1:27pm May 20, 2017 6:54am | Edited 1:27pm
Quoting yousername
{quote} Thank you! From your screeshots, How did you identify those small blue boxes which some of it was highlighted inside the purple and red box?
The numbers indicate volume . He's indicating the difference between a high-volume and a low-volume reversal. They're just mechanically different. It's like a ball bouncing off cement or dirt. If it bounces off cement then you keep dribbling. If it doesn't bounce off dirt then you don't bother dribbling again.

Market Makers love basketball.

Also, I am pretty sure those small blue boxes/lines you are asking about are the median volume for each candle. Basically indicating the middle of the volume range. It should help you figure out which part of the candle is stretching and more likely to experience a pull-back. If it crosses over that blue line then a reversal is likely(if you haven't already identified the reversal).

Edit: He clarified that it is NOT the median volume(although similar and with identical purpose). It's the area of the highest volume which would be more useful in a trending market but less precise in a ranging market. Personally, I find ranging markets just a smidge more difficult to navigate so I'd have opted for a median line.
"The fun is in the hunt. Not the kill."
  • #1,988
  • May 20, 2017 7:43am May 20, 2017 7:43am
Quoting yousername
{quote} Thank you! From your screeshots, How did you identify those small blue boxes which some of it was highlighted inside the purple and red box?
Those little blue boxes are automatically drawn and highlight the highest volume area in a bar.
Boxing clever since 76.
  • #1,989
  • May 20, 2017 7:50am May 20, 2017 7:50am
Quoting VEEFX
{quote} Another minion from a fucking broker out here..... Please counter
Didn't know you cursed too.
Read in between the price!!!
  • #1,990
  • May 20, 2017 7:56am May 20, 2017 7:56am
Quoting copi88
{quote} Hey VEEFX As we are dealing with an Auction type market where price is dictated by the laws of supply and demand, volume is essential to understanding what the participants are doing in the market. Whilest I agree with you volume is definitely not everything it certainly does offer strong clues as to future price movements. Problem is with almost all retail traders is that they do not have the models that the institutions use to determine what value is. Institutions will almost always only ever deal when there is a discount offered and...
VEEFX lol i was about to write back to you and saw this. Read this many times. This was exactly what I was going to write.
Stop trying so hard the markets are just BUYING AND SELLING. Its never changed. It cant change. The auctioning of price laws (demand/supply) is all it can be. Volume is Value. Now the problem is which volume, what perspective, when to use it and what algos/accumulation looks like. This is what I have mastered over the last 5 years. Its extremely complicated set up in a yet extremely simple strategy. Its just demand and supply. Strong holders v Weak Holders. Instos accumualting the weak. Instos moving price through the weak to take profit.
  • #1,991
  • May 20, 2017 8:35am May 20, 2017 8:35am
Here is an example of price manipulation and why volume analysis can give you miss reads if its done out of context and without cumulative delta to help.

Attached Image (click to enlarge)
Click to Enlarge Name: FLDGTg4.png Size: 79 KB


Yellow box the MM are in control of this market. Ranging between two points.
Its now coming into London open, the high volume period and the institutions want to deal. They have profit targets to make for the day.
There is news out that day for a large improvement in GBP retail forecasts (-1.4% to +1.2%). Institutions have their own economic departments with teams of analysts and will have their own forecasts. They will not be looking at FFs forecasts.

Their forecasts are even more bullish than what is publicly printed but they dont want to buy at these elevated prices, they want a discount first.
So someone will step into the market with a very large sell order. The market makers will see this coming onto their books and immediately withdraw their liquidity. They do not want to be on the other side of that trade.

Price accelerates to the down side as liquidity is pulled and stops are tripped at each fractal level.

Trades down to the green box which is a previous high volume / balance area.

Now you can see that volume increases on the way down, and you would think thats where value is as volume is increasing. However this is wrong. Its not selling volume on the way down its buying volume as highlighted by the cumulative delta bars. Institutions are buying all the way down. Delta is flat compared to price. There is a strong divergence between the two and this is another indication that its a withdrawal of liquidity and not selling that is driving this market down.

Now price is at a discount , institutions have accumulated enough they let the price trade back up for the news release at 9:30 (green arrow) and the announcement comes out with retail sales at 2.3%.
Institutions are now not going to be buyers anymore, they will be selling into that up move and offload their stock. They do not buy on upticks. If you did that as a trader on desk in a bank you would be fired. At the volumes they trade they would be slipped horribly. In order to be filled they enter on limit orders and get filled on back pressure.

Price exhausts at that blue box (pin bar from the second pic in my earlier post) and price just comes back all the way down to the previous high volume area where volume once again drops off. However look at Delta (pink lines). Its all buying down there and once price rejects the value area at the pink arrow you know what price is going to trade higher. You have a great opportunity later to go long once more when once again vol decreases into the high volume area and deltas are flat.
Boxing clever since 76.
  • #1,992
  • May 20, 2017 8:37am May 20, 2017 8:37am
Quoting MaxenshteinD
{quote} Yep, thats one of the many reasons why I don't bother with the VolumeSpreadAnalysis pseudo intellectual masturbation of retail forex. As someone said : "If you can't explain why something works in a few simple words, than either you are bull shitting, or don't know how it works". I never saw any clear algorithm for trading retail forex price feed based on volume. The funny part is, most guys who spend hours with bs such as the glamorous term "price action setups" and the mentioned V.S.A., are so angry and easily rage because they understand...
Spot-on!
  • #1,993
  • May 20, 2017 9:32am May 20, 2017 9:32am
Quoting copi88
{quote} Those little blue boxes are automatically drawn and highlight the highest volume area in a bar.
Is it possible if you could provide your indi please?
I find it very interesting.

Thank you
This is not investment/trading advise. Will not hold accountable for loss
  • #1,994
  • Edited 12:04pm May 20, 2017 9:49am | Edited 12:04pm
MT4 uses ticks in order to get the volume.
Many of these brokers retrieve price of each market from many sources i.e. goldman sach or morgan stanley, reuters etc.
Volume is reliable on stock because it is done in an exchange.
This is not investment/trading advise. Will not hold accountable for loss
  • #1,995
  • May 20, 2017 11:03am May 20, 2017 11:03am
Quoting MaxenshteinD
Trends are also Ponzi Schemes as Tunera put it (this quote is copied from Tunera entirely)- "ponzi scheme: - early investors join the scheme. - the scheme grow up, absorbing more and more investors. - the more investors join, the bigger the scheme grow, the bigger the profits for the (early) investors. - when there are no new investors, the scheme stop growing, and investors go for the exit. - who exit late pay. (late exiters losses = profiters profits). trend: - early investors join the trend. - the market go in the trend direction, attracting...
Substantial majority of them are not investors: they are traders or speculators.
Trading rules, price mechanisms are imprinted into price charts.
Nobody has ever published them on the retail side of stock markets. It would not just make sense at all.
You have two options:

  1. Discover them and confirm your discovery. It costs a lot of time, so use them for your benefits or sell them to others for their benefits as well (price them accordingly to limit the number of subscribers). Those who adopt such rules and rigorously obey them are traders. Clue #1: Such rules and price mechanisms should explain your chart from where it begins to where it ends and account for all relevant price reversals and continuations. Clue #2: You may never find a complete set of rules and price mechanisms: as a retail trader you are on the wrong side of the market. The problem is that as the rules themselves are objective, the way to apply them is subjective (a price target can be reached in n+1 ways) . This subjectivity persists on both sides of the market. That is why on the retail side a trading is just an elite sport (yes: it is neither a science, nor an art: it is just a sport - elite one)
  2. Ignore them. Those who ignore objective rules and price mechanisms are speculators.

Tertium non datur.

  • #1,996
  • May 20, 2017 11:33am May 20, 2017 11:33am
Conclusion:
Accurate data (price) + false & fake data (Volume) = Holy Grail

ROFL
  • #1,997
  • May 20, 2017 12:00pm May 20, 2017 12:00pm
Quoting hicosoft
{quote} Those who ignore objective rules and price mechanisms are speculators. Tertium non datur.
Exactly.
We need to be objective and look at the price structure i.e S/R. However SR can be subjective as well. Any point can be an SR. I like my methodology to plot SR which i use the previous trend's correction\consolidation as the SR level.

Always remember this definition

con·sol·i·da·tion
kənˌsäləˈdāSH(ə)n/
noun

  1. 1.
    the action or process of making something stronger or more solid.

This is not investment/trading advise. Will not hold accountable for loss
  • #1,998
  • May 20, 2017 12:47pm May 20, 2017 12:47pm
Quoting yousername
{quote} Exactly. We need to be objective and look at the price structure i.e S/R. However SR can be subjective as well. Any point can be an SR. I like my methodology to plot SR which i use the previous trend's correction\consolidation as the SR level. Always remember this definition consolidation kənˌsləˈdāSH(ə)n/ noun 1. the action or process of making something stronger or more solid.
To honor SR is just as basic as to honor a curb on a city street...
However I kindly disagree that any point can be an SR. Let's not go as far. We can do much better than that...
BTW. As you are such a big fan of consolidation, do you also know, why it is sometimes so much needed?
  • #1,999
  • May 20, 2017 12:58pm May 20, 2017 12:58pm
Quoting hicosoft
{quote} To honor SR is just as basic as to honor a curb on a city street... However I kindly disagree that any point can be an SR. Let's not go as far. We can do much better than that... BTW. As you are such a big fan of consolidation, do you also know, why it is sometimes so much needed?
Just to correct your statement im not in agreement with any point can be sr level. What im saying is that anyone can use any point as sr. I have my own proven methodology to identify sr, for naked trading i have shown mine in the previous post. But hey if you disagree, i dont really care as long as i keep making money and keep the losing position at minimum.
This is not investment/trading advise. Will not hold accountable for loss
  • #2,000
  • May 20, 2017 1:03pm May 20, 2017 1:03pm
Quoting VEEFX
{quote} ALMOST every pixel you see on a chart means something to someone. would you act on the 105 number? what if it was 205 or 50? would it make a differance one way or another? if you compare LIVE price feeds across brokers, you WILL find that price is off by 5, 10 pips routine and often. Once live is no longer live, they all look soo pretty and picture perfect and beautiful to the naked eye... oh look, if such and such happened, I am sure it will happen again so let's wing it dude and see what happens.... this is EXACTLY what your broker wants...
The value means nothing. It's appearance shows activity (price churning) at some exact price.

"you WILL find that price is off by 5, 10 pips routine and often."
Much much less than that.

"this is EXACTLY what your broker wants you to do."
The broker does not have to do anything at all except take the other side of their customer trades since 99 % of all customer accounts are losing money.
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