Let's cut the BS, no-one here has a magic system

[Martinghoul]

But there's absolutely no way you can get access to order flow in the things that you insist on punting, such as FX? An overwhelming majority of FX trades are OTC and you'll never know what is being executed where and what the true DOM might look like.

I might add that I am with meanie here... The amount of hubris shown by some of the retail punters here is absolutely astounding.

 

[FX Bandit]

An overwhelming majority of FX trades are OTC and you'll never know what is being executed where and what the true DOM might look like.

.

I don't think that anyone has suggested otherwise have they? Who has mentioned anything about knowing what individual forex trades have occurred for example?

 

[robster970]

I might add that I am with meanie here... The amount of hubris shown by some of the retail punters here is absolutely astounding.

Let them get on with it - it's very Darwinian. I know there a 3 dozen or so regular posters on here who I pay attention to because I value their posts and most of those posters were here when I arrived 2 years ago.

 

[Martinghoul]

I don't think that anyone has suggested otherwise have they? Who has mentioned anything about knowing what individual forex trades have occurred for example?

I may be confused, but terms like "order flow" and "depth of market" suggest actual ability to see trades and the order book. Maybe that's just me, but this terminology is relatively well-established, I thought.

 

[FX Bandit]

I may be confused, but terms like "order flow" and "depth of market" suggest actual ability to see trades and the order book. Maybe that's just me, but this terminology is relatively well-established, I thought.

I don't use DOM for my futures trading, although I've got it and am looking at ways that I might be able to use it. At present it's just "flashing numbers" to me .

When I refer to orderflow, no I'm not talking about seeing trades and the orderbook, quite the reverse in fact. The whole point is that you don't need to.

 

[Martinghoul]

Ah, I see... So would I be correct in saying that you're a "chartist", i.e. a person who thinks there's information in historical prices and that this information allows you to, effectively, forecast future prices?

 

[FX Bandit]

Ah, I see... So would I be correct in saying that you're a "chartist", i.e. a person who thinks there's information in historical prices and that this information allows you to, effectively, forecast future prices?

I wouldn't say that exactly, but I do know that all the information you need is in your charts. It is very hard to make general statements here, because if you say something like "I pay attention to support and resistance levels" someone will immediately pipe up with "I ran an automated back-test on S&R and they fail 50% of the time, so you're talking cr@p, they don't work etc".

 

[wackypete2]

It is very hard to make general statements here, because if you say something like "I pay attention to support and resistance levels" someone will immediately pipe up with "I ran an automated back-test on S&R and they fail 50% of the time, so you're talking cr@p, they don't work etc".

haha, yeah, so true...

Peter

 

[Martinghoul]

I wouldn't say that exactly, but I do know that all the information you need is in your charts. It is very hard to make general statements here, because if you say something like "I pay attention to support and resistance levels" someone will immediately pipe up with "I ran an automated back-test on S&R and they fail 50% of the time, so you're talking cr@p, they don't work etc".

Sure, but you must realize that you're effectively avoiding a perfectly valid challenge that, for your own sake, you should know how to address? Moreover, vague statements that "it's all in the charts" don't exactly offer convincing arguments in favor of the existence of some systematic methodology that works. However, this is neither here nor there...

Let me ask you a question instead. Why and how do you know that "it" - let's call it "edge" - is, in fact, in the charts?

 

[FX Bandit]

Sure, but you must realize that you're effectively avoiding a perfectly valid challenge that, for your own sake, you should know how to address? Moreover, vague statements that "it's all in the charts" don't exactly offer convincing arguments in favor of the existence of some systematic methodology that works. However, this is neither here nor there...

Let me ask you a question instead. Why and how do you know that "it" - let's call it "edge" - is, in fact, in the charts?

What was the challenge? I missed it.

I think the concept of an "edge" as it is commonly referred to in forums such as this is nonsense frankly. I am not trading against anyone in any meaningful sense (nor is any of the retail punters on this forum) and how anyone can imagine forex markets, for example, to be zero sum is beyond me. So an "edge" is not something that concerns me in the slightest.

However, if you are asking why I think that all the information needed to trade profitably (which as I say is in my opinion nothing to do with an "edge") the first answer that springs to mind is the organic growth of my trading account.

If you want to delve deeper into my method it is outlined in a few posts, two of which have been made quite recently (I only have a few, so they're not hard to find). If you can't be bothered, I will say that it could loosely be described as fairly standard price action, the kind that was once so fashionable but seems to have become much maligned of late.

To give one specific example as to why I think it works, I like to pay attention to round numbers, especially big ones. Pull up a 15m YM for the last month or so, and plot every 100 pts, or EUR/GBP weekly or daily and plot every 500 pips. If you don't think these areas are significant, then there is probably too wide a gulf between our views to have a meaningful discussion.

To continue, I do regard such areas as significant and therefore look to trade when price reaches them, because price reacts to them. Why does price react? The only possible reason for price to do anything - orderflow.

I should clarify this is one tiny element of how I trade. How to actually profit from this is something else, but concentrating your trades on areas likely to provoke a reaction is a very easy way of beginning to see and gain some understanding of orderflow.

 

[FX Bandit]

Another thing that traders could do is ask themselves "what moves markets?". Is it news, interest rates, war, or anything else you might care to mention? No, it is orders - buying and selling.

Look at what price does after a big news event on any chart - let's say the mini Dow for convenience. Have your significant levels already plotted, and watch where price reacts even when subject to the impact of major news. Then see if the way price reacts gives any clues as to its possible next direction.

How do I know "it" is the charts? Because you can see it there, day in day out. You just need to equip yourself with some basic tools to make sense of it.

I am sorry if I appear vague, but there is little point in being too specific - no-one wants to hear this kind of stuff anyway. People would rather buy when the stochastic crosses the 20% line or whatever, without thinking.

In addition, successful trading to me is vague, because I approach it as an attempt to understand what is happening in the market, and not a set system that tells you what to do. I use a set of tools and skills to do this. I have enough tools, but the skills I think could stand some more work. This is another reason people fail - they are confronted with something they do not immediately understand and dismiss it, rather than attempting to gain insight through work and practice.

But the tools I use are no secret - like I say all the dull, old-fashioned stuff like flips in support and resistance. What do you think might cause support to turn into resistance (if indeed yo accept that it does)? Neither actually exits, so why does price react so often in this way?

 

[meanreversion]

So a friend of mine trades as a PM at a very large hedge fund. One of their star "macro" traders makes money on the side by jobbing the spot majors when he gets info from banks as to their order flow.

I didn't know you could read this from the charts, I learn something new every day.

 

[meanreversion]

But the tools I use are no secret - like I say all the dull, old-fashioned stuff like flips in support and resistance. What do you think might cause support to turn into resistance (if indeed yo accept that it does)? Neither actually exits, so why does price react so often in this way?

Someone (wallstreetwarrior?) earlier said that graphs are not reality.. I accept that, they are representations. As Bandit says, neither are support and resistance, that is not reality either.

This thread is getting way too "Matrix" for me.

 

[FX Bandit]

So a friend of mine trades as a PM at a very large hedge fund. One of their star "macro" traders makes money on the side by jobbing the spot majors when he gets info from banks as to their order flow.

I didn't know you could read this from the charts, I learn something new every day.

A lot of this kind of information can be seen on your chart if you make the effort to look for it. Watch the behaviour on your ES and YM charts before major announcements. You will not see it all the time, but perhaps often enough to think it worth investigating further.

To begin with just look out for the obvious, everyday price patterns and individual bars that everyone knows.

 

[FX Bandit]

Someone (wallstreetwarrior?) earlier said that graphs are not reality.. I accept that, they are representations. As Bandit says, neither are support and resistance, that is not reality either.

This thread is getting way too "Matrix" for me.

I think that might have been me actually LOL.

Look, nothing is real except price, we all know that. That is why people miss the point when they say "X doesn't work". Of course it doesn't work, it doesn't even exist.

Read Livermore and see what he says about the tape. He buys and sells when the tape tells him too. What is the tape?

What is a chart?

All we are dealing with is numbers - price. This can be aggregated and viewed in many ways and forms. But they are all just artificial constructions - price is the only thing that actually exists.

 

[bbmac]

As a retail trader of the fx market, I have not found a way of using either volume or Order flow /Depth of market successfully as part of a trading edge..As a retailer they are effectively both broker generated, it being an OTC market. As part of what I call my 'main' potential support/resistance factors I use a 3rd party vendor to inform on this and I very often find that where they report bids/offers likely to be in the market and their potential strength I can understand the reasons why market participants would have orders there from my own potential suppoprt/resistance analysis of the said 'main' potential support/resistance factors visible to me and every other other retail/institutional trader, should they choose to analyse potential support/resistance in this way. This vendor clearly has a broader view of my market than I and I understand they have access to more 1st and 2nd hand info sources in order to gain and then publish this info.

All patterns repeat and whilst Price action can only tell us what has happened, it is this principle that can inform us of the higher probability of what will happen next. Some one in a post above mentioned how price moves and this too can be important and inform our trading decisions.

On the main subject of the thread which I guess is a response to some of the more outlandish claims found in other recent threads, I agree with the general premise. This said, for me Confluence is the principle underpinning my technical trading edge, both the confluence of potential support/resistance factors and the confluence of technical phenomena that make repeating patterns derived from price action, and this is my tradiung edge. As such whilst not 'Magic' executed correctly it produces a net gain across any given sample and I expect it to continue to do so unless the basic principles and dynamics that drive price change -This is probably unlikely.

Th Op correctly said that one of the biggest advantages that we as retail traders have is that we can choose when to trade..this is hugely importnat and without it my edge would be rendered useless. Waiting for the highest degree of confluence is where the hiughest probability trading opportunities live, and I am convinced that is the lasck of patience and discipline that drives most traders to wall. I have sat with other traders who exhibit a fidgety need to be involved in the market at every twist and turn-fearfull they are missing out, and when frustration gets the better of them, they enter the market and invariably make a mistake and lose money.

There is nothing new under the sun and so too there is nothing new in my post or indeed in this thread, but it bears repeating on an active intelligent thread with some intelligent contributions (!)

G/L

 

[FX Bandit]

As a retail trader of the fx market, I have not found a way of using either volume or Order flow /Depth of market successfully as part of a trading edge..As a retailer they are effectively both broker generated, it being an OTC market. As part of what I call my 'main' potential support/resistance factors I use a 3rd party vendor to inform on this and I very often find that where they report bids/offers likely to be in the market and their potential strength I can understand the reasons why market participants would have orders there from my own potential suppoprt/resistance analysis of the said 'main' potential support/resistance factors visible to me and every other other retail/institutional trader, should they choose to analyse potential support/resistance in this way. This vendor clearly has a broader view of my market than I and I understand they have access to more 1st and 2nd hand info sources in order to gain and then publish this info.

All patterns repeat and whilst Price action can only tell us what has happened, it is this principle that can inform us of the higher probability of what will happen next. Some one in a post above mentioned how price moves and this too can be important and inform our trading decisions.

On the main subject of the thread which I guess is a response to some of the more outlandish claims found in other recent threads, I agree with the general premise. This said, for me Confluence is the principle underpinning my technical trading edge, both the confluence of potential support/resistance factors and the confluence of technical phenomena that make repeating patterns derived from price action, and this is my tradiung edge. As such whilst not 'Magic' executed correctly it produces a net gain across any given sample and I expect it to continue to do so unless the basic principles and dynamics that drive price change -This is probably unlikely.

Th Op correctly said that one of the biggest advantages that we as retail traders have is that we can choose when to trade..this is hugely importnat and without it my edge would be rendered useless. Waiting for the highest degree of confluence is where the hiughest probability trading opportunities live, and I am convinced that is the lasck of patience and discipline that drives most traders to wall. I have sat with other traders who exhibit a fidgety need to be involved in the market at every twist and turn-fearfull they are missing out, and when frustration gets the better of them, they enter the market and invariably make a mistake and lose money.

There is nothing new under the sun and so too there is nothing new in my post or indeed in this thread, but it bears repeating on an active intelligent thread with some intelligent contributions (!)

G/L

Excellent post. Simply excellent.

 

[bbmac]

The 1hrgbpusd chart is below...Look what happened in recent times, - Yesterday's 5895 encountered supply (in a previous 4hr swing hi zone-ie a previous near-term imbalance of supply/demand) point a, and sold down, the pace quickened by Boe/Mpc member posen's speech re more and aggressive QE, so called QE2 is needed....price sells off rapidly to the previous 1hr/4hr swing hi zone (previous near-term imbalance of supply = prev resistance=potential rbs) with confluebce of the 61.8% 5610- said 5995 hi and the 1hr ascending trend line-point b...it finds demand and rises aided by uber-hawk Boe/Mpc member Sentance countering the Dove Posen's QE2 speech...etc etc...Look again at point c...more buying off the trend line and again at point d...Why? because patterns of behaviour repeat..

Whilst this is not magic we can gain an edge from repeating patterns of market behaviour.

G/L



The 4hr previous swing hi zone at point b is is shown below./..a previopus swing hi x 3 zone...ie previously strong resistance, so an upside breech and retest from the topside was always likely to encounter some bids as the tech phenomenon of resistance becomes support (RBS) played out...it is this repeating phenomenon of market behavious that provided the edge, ie not magic but a set of circumstances suggesting a greater probability of price rising from the zone than continuingf to fall - howsoever temporary, resulting in pip gain.

 

[FX Bandit]

I think a lot of it is simply experience - watching the markets. Not watching for a pin bar to show up, or for your indicator to do something, but observing how price moves.

BBMac states the old, clapped-out cliche that "There is nothing new under the sun". Guess why it's old and clapped out? Because it's been used so many times.

Guess why it's been used so many times? Because it's true.

Get some screen time in observing price on multiple charts. You WILL see it.

 

[spreader_legger]

I remember that show they had on TV the other year, training up regular folk to become professional traders. I distinctly remember the head trading in one of the episodes saying ..... price has no memory. Where does that leave our concept of support & resistance?

Someone (wallstreetwarrior?) earlier said that graphs are not reality.. I accept that, they are representations. As Bandit says, neither are support and resistance, that is not reality either.

This thread is getting way too "Matrix" for me.