The Battle

All

I was wondering how people viewed the market - you know - what's going on behind the scenes when prices go up, down or sideways.

I'll present 2 views and you can vote for either or option 3 which is 'other' where you can describe how you see it.

Option 1 : The market is a battle between buyers and sellers. When price goes up, buyers are winning, when price goes down, sellers are winning.

Option 2 : The market is not a battle, it's more like a search. When price goes up, buyers are looking for sellers, when price goes down, sellers are looking for buyers.

Option 3 : Other.

Also - can we have a stab at what's happening when the market is consolidating too ?

Cheers

DT

Option 2 makes more sense if you have DMA. What really moves the price?

I have only got experience of messing about with ladders in sports trading and you need to get your offer matched.

DionysusToast said:

All

I was wondering how people viewed the market - you know - what's going on behind the scenes when prices go up, down or sideways.

I'll present 2 views and you can vote for either or option 3 which is 'other' where you can describe how you see it.

Option 1 : The market is a battle between buyers and sellers. When price goes up, buyers are winning, when price goes down, sellers are winning.

Option 2 : The market is not a battle, it's more like a search. When price goes up, buyers are looking for sellers, when price goes down, sellers are looking for buyers.

Option 3 : Other.

Also - can we have a stab at what's happening when the market is consolidating too ?

Cheers

DT

Click to expand...

I think option 2 should be : when price goes up buyers are looking for buyers and when price goes down sellers are looking for sellers ....

shadowninja said:

Option 2 makes more sense if you have DMA. What really moves the price?

I have only got experience of messing about with ladders in sports trading and you need to get your offer matched.

Click to expand...

Whatever your horizon is, there is buying and selling. Prices move up and down. I don't think this needs to be limited to the short term.

tar said:

I think option 2 should be : when price goes up buyers are looking for buyers and when price goes down sellers are looking for sellers ....

Click to expand...

Of course, at some point in the future, a buyer may become a seller.

Can we really make any presumption about the reason a person brought or sold ? When someone buys, that may be creating a long position or closing a short one. When someone sells it could be creating a short position or closing a long one.

In either case they are a buyer.

Also added to the mix is that some buyers are hedging and so are not specifically looking to close when price goes up.

I think we cannot know much about intent after the buy or sell.

We can though put forward some opinions on the activity of buying and selling and how we perceive it.

Option 2. The market is one big auction. When I first started trading, I was made to read Mind Over Markets by Dalton which explains this perfectly that the market is simply one big auction. Makes sense to me!

I would recommend anyone to read Mind Over Markets by Dalton or any of Steidlmayer's books on the market auction process.

Option 4: It's a **** algo

More seriously, I like my organism view, but when I last expounded on it I was mocked by everyone, despite it being a bloody good model

I never got all this metaphor stuff, I prefer to call a spade a spade.

Option 3. I go for the voting machine/weighing machine view personally.

robster970 said:

Option 3. I go for the voting machine/weighing machine view personally.

Click to expand...

me too

Is it not a figment of the human imagination expressed in the forms of fear and greed...if every participant loses confidence then there is no market

It makes no difference.

Identify the path of least resistance in your chosen time-scale, enter at a point you deem propitious, follow it until it changes according to your criteria.

Protect your capital as diligently as possible whilst doing so.

Repeat ad loadedam.

Some interesting comments....

In terms of the 'voting' concept, then how do we explain zones of high volume consolidation ? In the auction concept, these zones are the result of buyers looking for sellers and the result is a large number of trades between people who arguably have opposing views.

If the market was a voting maching, then would the place with the most votes/trade be the place where there was the most disagreement about price ?

As for metaphor - we actually aren't speaking in metaphors here. Prices do indeed move up and down and prices hit areas they stall at beyond. Sometimes these are areas where very few transactions take place and sometimes these are areas where a high volume of transactions take place. This volume may not be visible in the Forex market but it is visible in other markets.

In terms of 'it makes no difference'. Interesting. If you have no idea why prices move up & down, how do you identify path of least resistance and avoid becoming a bag holder?

It may of course make no difference but I am interested in how people view price changes in terms of the reason for something as basic as a change in price when buyers & sellers interact.

arabianights said:

More seriously, I like my organism view, but when I last expounded on it I was mocked by everyone, despite it being a bloody good model

Click to expand...

Shurely you aren't feeling sensitive are you ?

The organism view is interesting but I must've missed the details.

Is it a view that helps to explain moves or is it just saying that it's a organic blob that is too complex to be analyzed ?

gibson said:

I would recommend anyone to read Mind Over Markets by Dalton or any of Steidlmayer's books on the market auction process.

Click to expand...

Both available for free if you know where to look...

You could conceptualise it as buyers competing with other buyers for available liquidity and vice versa?

Whether price moves up or down depends on the aggression of the various participants in their determination to enter/exit the market, or their tolerance of changing prices?

It may also be complicated by utilitarian traders entering/exiting with large orders and others reacting to their activity?

DionysusToast said:

All

I was wondering how people viewed the market - you know - what's going on behind the scenes when prices go up, down or sideways.

I'll present 2 views and you can vote for either or option 3 which is 'other' where you can describe how you see it.

Option 1 : The market is a battle between buyers and sellers. When price goes up, buyers are winning, when price goes down, sellers are winning.

Option 2 : The market is not a battle, it's more like a search. When price goes up, buyers are looking for sellers, when price goes down, sellers are looking for buyers.

Option 3 : Other.

Also - can we have a stab at what's happening when the market is consolidating too ?

Cheers

DT

Click to expand...

The Keynesian beauty contest.

Markets participants are like judges in a beauty contest.

It's not about picking the prettiest girl, it's about picking the girl you think the other judges will pick.


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FX Bandit said:

It makes no difference.

Identify the path of least resistance in your chosen time-scale, enter at a point you deem propitious, follow it until it changes according to your criteria.

Protect your capital as diligently as possible whilst doing so.

Repeat ad loadedam.

Click to expand...

Seconded
Keep it simple.

If I had to say something, I'd go with herd emotion, most traders are sheep, market movers are the dogs.
Nothing wrong with being a sheep as long as you don't get fleeced