tex wrote:Oje, ein Dortmund Fan Glückwunsch zum Finaleinzug....
Aber im Finale gibts dann von den Bayern aufn Arsch
Ich bin jetzt kein ausgemachter Dortmundfan. Ich würde eher sagen ich sympathesiere mit Dortmund Ich schaue mir aber auch die Bayern heute an und denke mal die werden das Ding schon gewinnen.
Volume:
Because Forex is a decentralized market there is no real volume data avaiable for retail traders and banks do everything to hide volume because volume is part of their edge. Retail brokers are offering only tick volume. Tick volume is measured in number of tick changes. The theory is that price movements occur in relation to trading activity.
There is a huge discussion in the volume spread analysis community if tick volume is useful. I don't want to form an opinon about that topic but it seems that the tick volume of some brokers is proportional to true volume in systems where this data is available for comparison. At least tick volume can provide insight into the intensity of a given price movement.
Futures and stock traders have the possibilities to watch the order book. But even when you have that posibility you have to be careful because big traders are even tricking with orders in the order book. They place fake orders to provide false informations. Additionally orders get cancelled all the time.
Especially in the forex market volume can trick you when banks can hide it. There are so called darkpools and iceberg orders.
"Some investors dump 100-200 million into the markets at once, in order not to manipulate natural orderflow this volume can be hidden from the market and can be made to affect natural market. A lot of banks and institutions use this for a variety of reasons"
This is a really controversial topic. Like CJ alot of technical traders refuse to apply fundamentals.
I'll start with two quotations which both from my point of view are true.
"l believe that fundamentals are a vehicle used by the market makers to move prices to key supply and demand levels where they have placed limits ahead of time to be filled
sell the rumor buy the news, buy the rumor sell the news etc - leaks and all the rest of the stuff
its all reflected in patterns regardless ....... in the price .......... in the bars"
"Global Macro Trading is a very popular form of trading in the investing and trading community. It has also been used by many very wealthy hedge fund managers as an important part of their analysis and trading approach. This list includes people like George Soros, Paul Tudor Jones and Bruce Kovner. Some of the greatest trades ever in the history of the world have been placed using global macro analysis. One such trade was when George Soros “Broke the Bank of England” in 1992 and made over $1 Billion dollars in 24 hours as the British Pound depreciated over 1,000 pips in one day."
I can't deny that global macro factors can generate order flow and move the markets. The most OFT are involving it in the decision-making process. Order flow trader (OFT) attempts to use economic and political forces to justify the placing of their trades.
"Such examples can include interest rate differentials, growth differentials, global growth, inflation, recessions, financial crisis, housing market, consumer confidence, natural disasters, political uncertainty, etc. The global macro trader can take a look at the big picture and find the dominant themes in the market place that can take place in the future and cause gradual, sustained order flow over a period of time."
You don't have to go to university now or becoming an expert in fundamental anlysis. But it's not an bad idea to inform yourself about some key themes. There are alot of news feeds and homepages where you can get easily some informations without great effort. It's not the single news which creates market sentiment it's the sum of the news. Sentiment analysis can help you findig the strong and the weak side of the market.
Nevertheless the fox can kick price arround like he wants in short term but in the longer run he follows the sentiment too or in other words he uses the market sentiment for his intentions.
"Don't make it complicated and keep your sentiment analysis simple!
Note key themes in the market, follow the news (focus on one feed and key headlines, don't become a victim of analysis paralysis) and study the relationship between your sentiment analysis and price action. Think about your opponents in the market and try to identify the weak side of the market. Finally, combine it with technical order flow (key levels, stops) and keep in mind that price action can influence sentiment too!"
An actual example: Since some time the japanese central bank goes crazy. They are flooding the market with money like never seen before. They want to force inflation, strengthen their economy and weaken the yen. The result is that since weeks every yen pair is sky rocking. It was nearly impossible to fail with yen shorts/longs of yen pairs. The japanese central bank will continue with it's policy in the future.
Additonally I have attached 2 screen shots where you can see the impact of fundamentals on the charts.
p.s. I'm sure that really good TA/PA traders can drain the markets without paying attention to the fundamentals. But for everyone else it should improve the probabilities.
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Do you remember that I wrote that the fox is driving price with momentum into zones of interest to scare retail traders? Here is an eample of a trader for whom acceleration of price is one of his trading requirements. I think he describes it very well:
Screenshot 2 mark 1) (the red arrow)
"- The strong hands that are short will likely trim positions at this level and some will even look for longs to fade the big move and join the trend.
- The weaker hands that are fortunate enough to be short are likely to try and "gamble" with the level and hold it because they mistake the violence for the start of a big move. At the same time, those that are net flat are probably too scared by the extent of the down move to stand infront of it. (how many people reading this thread are guilty of either or both of these thought processes? I know I was for a long time)"
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I'm late coming to this thread, but very glad I'm here after reading the first 5 pages. I appreciate the effort you are putting in.
Your language and approach are excellent
Thanks
Mark
Thank you. I want to show ways to the people how they can improve trading. If some traders can reach the next level with CJ's help and a little bit of mine I'm happy.
Today was an important decision. The European Central Bank cut its main interest rate to a new record low. A low interest rate means more money will be invest in the economy and stock market. The informed trader was expecting this (me too ) and so I was only waiting that the fox starts to play his game. Price was at a location of interest and the obligatory fake out (sucking in uninformed sellers) and stop hunt followed. After the fox got what he wanted he bought euro.
Normaly I don't want to show trades but this example is too nice. I only scalped for 20 pips because sooner or later the people will realise that such a small interest rate cut doesn't effect the EU countries like they wish. Yes it was a risky trade and yes my charts are looking colorful but the indicators I use are only for informational purpose.
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Another example for acceleration of price into zones of interest. Notice the most trading rules (at least the ones which are based on the market mechanics) are working in every market.
"Chart 1 is the S&P at the aforementioned 1371 level which is a fantastic S/R pivot.
Chart 2 clearly shows the acceleration into the level on the news and the subsequent reaction. This is exactly what I look for."
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Funny how great traders are coming to the same conclusions:
"A truth for today.
Normal market movement (big fundamental news events excluded) is simply to facilitate orders. The market moves up purely to find sellers. The market moves down purely to find buyers. Put up a chart, locate the likely areas where there will be buyers and sellers and you will see reactions at these places. The market won't move for your or my five lot trade, but it will shoot up at blinding speed to fill a sell order for billions. Large orders need lots of liquidity. This is why you will often see price rocketing up or down only to bang against a level and then reverse hard. The simple way to find the needed liquidity is to get the price moving hard. A big buyer or seller can count on bad retail traders to buy what they are selling because the novice trader loves to buy big green bars and sell big red ones.
To get a true understanding of these concepts the trader should study market structure. There are lots of free pdfs. and other imformation on market structure on the web, and best of all its free."
From my own expirience I can say that even great traders who never have read a word about OFT are knowing the principles of the marked. They know it from watching the charts until their eyes bleed and because the fox can't hide from those who "understand".
I'm late coming to this thread, but very glad I'm here after reading the first 5 pages. I appreciate the effort you are putting in.
Your language and approach are excellent
Thanks
Mark
Thank you. I want to show ways to the people how they can improve trading. If some traders can reach the next level with CJ's help and a little bit of mine I'm happy.
Today was an important decision. The European Central Bank cut its main interest rate to a new record low. A low interest rate means more money will be invest in the economy and stock market. The informed trader was expecting this (me too ) and so I was only waiting that the fox starts to play his game. Price was at a location of interest and the obligatory fake out (sucking in uninformed sellers) and stop hunt followed. After the fox got what he wanted he bought euro.
Normaly I don't want to show trades but this example is too nice. I only scalped for 20 pips because sooner or later the people will realise that such a small interest rate cut doesn't effect the EU countries like they wish. Yes it was a risky trade and yes my charts are looking colorful but the indicators I use are only for informational purpose.
I have to clear up something regarding my news trade: Usually when a country is decreasing it's interest rates the currency will drop because the money flows to countries with higher interest rates. That means that ivestors are selling the local currency and buying the foreign currency of the country with higher interest rates.
On the other hand when the interest rate is low the credit costs are also lower and people buy instead of saving their money.
I expected that the second effect will be more important in the short run because the EU is drooling over everything that is boosting the weak economy. So my analysis wasn't correct because the fox wanted to trick buyers and sellers.
Glückwunsch zum Finaleinzug....
Ich schaue mir aber auch die Bayern heute an und denke mal die werden das Ding schon gewinnen.
) and so I was only waiting that the fox starts to play his game. Price was at a location of interest and the obligatory fake out (sucking in uninformed sellers) and stop hunt followed. After the fox got what he wanted he bought euro.