f451 wrote:Hi Captain!
Reading the thread is provoking a few thoughts...
Signs on the chart - pin bars, double bars (key reversals), especially if they're poking out beyond some obvious support or resistance level... or price moves that induce retail traders looking at standard sets of indicators to yell - yippee - breakout trade - or yippee moving average crossover trade, or....
(the contrast between how those smart money foxes see the market and how the retail traders with the asian range breakout and moving average crossovers templates often is enough to induce just enough volume to sell when then the foxes want to buy... I've definitely heard experienced bank traders talk about need to push price up or down past certain level to attract enough liquidity to dump or establish a position...)
trouble for me is I've never really been able to apply these ideas to actual trading...
so keen to be here, CJ, and to see if I can learn to see the deeper levels of the markets!
Let's see what I can do here. I once read something that I think came from Steve Mauro, that said it takes 10,000 full lots to move price one pip. That's a lot of trades to make minimal price impact. For the most part, none of us will be doing this or have to worry about who takes the other side of the trade we put on. This is another reason why people say EA's and systems quit working after so many people start using them are full of beans. If the above statement is true, and I don't know if it is, it would take 1,000,000 traders placing .01 trades in the same direction, at the same time to move price 1 pip. 100,000 traders placing .1 trades or 10,000 traders placing full size lot trades. This only moves price 1 pip. EA's and systems quit working because the conditions they are programed for are not taking place. Period. It's the trap that's set that will only trip when those conditions are met. The falsehood that the market makers change the way they trade is another part of trader paranoia. That's how the rationalize it and that's what they believe.
Consider this - what is price? Price is nothing more than a reflection of the number of transactions put forth and the price paid or these transactions. You can see this so easy on the charts I've posted with tick volume on them. The largest price swings are usually during the highest volume of price ticks, reflecting increased transactions. This is why the fox wants both bulls and bears present. It creates more transactions and the fox can move price with his intent.
You can take all the retail traders in the world and the orders they place are sucked up by the market. Some are offset, against other traders, with the broker taking the chop, some are offset by the broker's in house traders, some are passed through where they are but a spec, offset by large institutions. Look at the numbers above. It takes and enormous number of "transactions" to move price. Hedge funds, bankers, large institutions, and perhaps some whales and sharks have that ability. We do not.
The bulk of retail traders orders are to large institutions. It is the large institutions that direct price and it to their intent it moves. Our goal is to trade with the fox, not against. This is why it is so important to understand why price is moving as it does instead of just looking at the cross of price and a line. When we trade the cross of the line, we trade against the fox. He is the one who created the cross. When you understand this, then you begin to travel with the fox. One way to learn this is by learning the habits and the patterns of the fox. This is what I try to put forth here. Pattern recognition and what it means. The tracks of the fox.
Price is not random. Price is moved deliberately, and is manipulated by logical decisions. It is the fox who makes these decisions and we, as retail traders react to their decisions. Let me say that again, we react to their decisions. The conditions we trade in are created and presented to us and we react to them. Most times, we react emotionally and not rationally. This emotion is what the fox preys on. Most traders are on the edge of their seats when trading. Trading should be stress free and devoid of emotion. I'm so devoid of emotion any more, I find my self waking up with my laptop on my lap and drool dripping down my chin, or that could be old age creeping up. Trading to me is mechanical process anymore, boring at times. This is why the fox drags the bulls and bears together, punishes their emotions and creates transactions to manipulate price. When you hear that the bulls and bears are fighting it out now, you'll know it's the fox behind it all.
This is how a large institution offloads or builds a position. By drawing as many traders to common ground and then manipulating them to make as many transactions as possible, so that the institution can drive or push price to their intent. Again, look at the chart with tick volume of it and take not of the price swings and volume. There are large transactions taking place and price is moving a great deal, causing a lot of emotional distress. There is also a large number of price ticks and price in NOT MOVING. This is the institution accumulating for the next phase.
You may not have been able to apply this to your trading because you are on the wrong side of the glass. You think and reason and rely on what's been put forth to you, up to this point. Perhaps you might be able see things in a different light now and just maybe make changes to your trading accordingly.
Any questions, refer back to your post where the traders "yell yippee!"
John
There were so many indicators I couldn't even see price! Nowadays I am loathe to put even one indicator on my charts - they all lag so badly and remind me of journalists running to cover an event that has already happened.
, I need a Hook up on it .
