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The fox and the market
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Author:  123Reverse [ Tue May 14, 2013 7:51 am ]
Post subject:  Re: The fox and the market
Congratulations on this thread.

With your level of knowledge and understanding being well above mine, I hope you continue with your efforts here and bring to this thread your insights from fti's teachings. Mind you there is a lot of reading, more stories (loved the "wild pigs", the "AOW" on so on.

Reading the first 200 pages, which is generally recommended can take a long time especially with the external material. I do hope you do this in time to correspond with him whilst he is still able. He is in a bad way.

I am too far off the pace to trade his way, but it's hard not to take in some of what he gives and not come away a better person.

Cheers.
Author:  Forexfux [ Tue May 14, 2013 4:15 pm ]
Post subject:  Re: The fox and the market
123Reverse wrote:Congratulations on this thread.

With your level of knowledge and understanding being well above mine, I hope you continue with your efforts here and bring to this thread your insights from fti's teachings. Mind you there is a lot of reading, more stories (loved the "wild pigs", the "AOW" on so on.

Reading the first 200 pages, which is generally recommended can take a long time especially with the external material. I do hope you do this in time to correspond with him whilst he is still able. He is in a bad way.

I am too far off the pace to trade his way, but it's hard not to take in some of what he gives and not come away a better person.

Cheers.
Hi 123Reverse,
it seems he don't like pigs "Bull makes money, Bears make money, Pigs get slaughtered." :D

For me it's not an easy read because of my mediocre english skills and the way he is writing.

Nevertheless he is really a source of knowledge. As a (former?) dealer he knows how the markets work.

When you say he is in a bad way do you mean he is in poor health?
Author:  Forexfux [ Tue May 14, 2013 4:43 pm ]
Post subject:  Re: The fox and the market
People often use metaphors to describe trading. Fti says trading is like war/a battlefield others say trading is like dancing or a river...

From my point of view trading is like conducting an orchestra. I'm the conductor and my trading tools and skills are the instruments. And who is the audicence? Probably my acc.

As a good conductor I have to know which instruments fits which situations. I must use them wisely and go with the rythm. My instrument players must be well trained and expirienced in order to follow my instructions. Sometimes I have to be aggressive when the rythm is fast and sometimes conservative when the rythm slows down. When I employ only one instrument wrong the audience may miss it or on the other hand the audience realise my mistake and is really unhappy. If I play every song perfectly from the beginning to the end the audience will be pleased. To become an excellent conductor I have to train hard to get a feel for the rythm and the instrumets in order to improve myself.


I hope that makes sense
Author:  mjws00 [ Tue May 14, 2013 5:21 pm ]
Post subject:  Re: The fox and the market
Forexfux wrote: Nevertheless he is really a source of knowledge. As a (former?) dealer he knows how the markets work.

When you say he is in a bad way do you mean he is in poor health?
He is in very poor health. Very interesting fellow to learn from if you can get used to all the odd slang. Being a native English speaker doesn't help ;)

His analogies work well for me. The agressive skews on "rescues", can get you into trouble if you make a mistake and have to cut losses. I burned my fingers a few times, but mostly while testing.

One of his most interesting points that I connected with was the difference the scout trade makes to my "feel" of the market. Watching the chart vs. that gut sensation of win/loss as price flows is an interesting tool. I don't utilize it as much as I once did, but it had a profound influence.

Your thread is looking great so far.

Mike
Author:  Forexfux [ Wed May 15, 2013 9:43 am ]
Post subject:  Re: The fox and the market
mjws00 wrote:
Forexfux wrote: Nevertheless he is really a source of knowledge. As a (former?) dealer he knows how the markets work.

When you say he is in a bad way do you mean he is in poor health?
He is in very poor health. Very interesting fellow to learn from if you can get used to all the odd slang. Being a native English speaker doesn't help ;)

His analogies work well for me. The agressive skews on "rescues", can get you into trouble if you make a mistake and have to cut losses. I burned my fingers a few times, but mostly while testing.

One of his most interesting points that I connected with was the difference the scout trade makes to my "feel" of the market. Watching the chart vs. that gut sensation of win/loss as price flows is an interesting tool. I don't utilize it as much as I once did, but it had a profound influence.

Your thread is looking great so far.

Mike
Hi Mike,
That's sad to hear. I can remember that he wrote that the dealer job exhausted him physical and mental. At least he still feels good enough to continue to post.

I can't say something regarding his method because I'm still struggeling through the early stages of the thread. ;)
Author:  Forexfux [ Wed May 15, 2013 10:12 am ]
Post subject:  Re: The fox and the market
Okay I have recently watched a forex oder flow video on youtube:

http://www.youtube.com/watch?v=k9-h8QHk ... BF2EDF5B64

The guy who speaks is part of an online school and shame on me when I'm wrong.

I mean he is teaching for money and maybe I miss something but it seems that this video includes some bad and false explaination.

From my point of view this guy misrepresents how liquidity works and he seems not to know what the difference between volume and liquidity is.

I'll give you an example:

Look at the two attached screen shots (the second one first). They are taken from the video. Do you notice something? Watch the video (start at min 20) and notice how he explains the price change from 3219 to 32195. Feel free to answer.
Author:  Forexfux [ Wed May 15, 2013 5:23 pm ]
Post subject:  Re: The fox and the market
Forexfux wrote:Okay I have recently watched a forex oder flow video on youtube:

http://www.youtube.com/watch?v=k9-h8QHk ... BF2EDF5B64

The guy who speaks is part of an online school and shame on me when I'm wrong.

I mean he is teaching for money and maybe I miss something but it seems that this video includes some bad and false explaination.

From my point of view this guy misrepresents how liquidity works and he seems not to know what the difference between volume and liquidity is.

I'll give you an example:

Look at the two attached screen shots (the second one first). They are taken from the video. Do you notice something? Watch the video (start at min 20) and notice how he explains the price change from 3219 to 32195. Feel free to answer.
Nobody has a clue what i was refering to?

Frank the hedge fund trader wants to sell $75 million EUR/USD. At the first glance everything looks okay. He can sell $25 mil at 32195 and the rest of $50 mil is sold at 32190. But when you hear his exlpaination and when you look at his second secreenshot you will notice that Frank wants to sell the whole position at 32190 and then the price slipps up to 32195. The guy from the video says the price moves up a half tick to fill new bids at 32195. Frank has now to pay $25 mil x 0.5 pips more transaction costs.

Sry dude but when I would buy $75 mil at 3210 and try to sell the whole position at 32190 and get a fill of 1/3 of my position at 32195 I would be very happy. Is it better to earn 9 pips or to earn 9.5 pips? My earnings would be higher not lower.

Frank would be f... up when the price would tick a half pip lower at 32185.

And since when ticks price up to fill bids? Price ticks up to fill offers. When there are more buy market orders than offers price must tick up to find more selling liquidity. Frank wants to sell $75 mil. There is only enough buy liquidity to fill 50 mil at 3219. The rest of his sells must surch liquidity lower.

There are more flaws in the video but anyway...
Author:  lhDT [ Wed May 15, 2013 5:38 pm ]
Post subject:  Re: The fox and the market
Forexfux wrote: Nobody has a clue what i was refering to?

Frank the hedge fund trader wants to sell $75 million EUR/USD. At the first glance everything looks okay. He can sell $25 mil at 32195 and the rest of $50 mil is sold at 32190. But when you hear his exlpaination and when you look at his second secreenshot you will notice that Frank wants to sell the whole position at 32190 and then the price slipps up to 32195. The guy from the video says the price moves up a half tick to fill new bids at 32195. Frank has now to pay $25 mil x 0.5 pips more transaction costs.

Sry dude but when I would buy $75 mil at 3210 and try to sell the whole position at 32190 and get a fill of 1/3 of my position at 32195 I would be very happy. Is it better to earn 9 pips or to earn 9.5 pips? My earnings would be higher not lower.

Frank would be f... up when the price would tick a half pip lower at 32185.

And since when ticks price up to fill bids? Price ticks up to fill offers. When there are more buy market orders than offers price must tick up to find more selling liquidity. Frank wants to sell $75 mil. There is only enough buy liquidity to fill 50 mil at 3219. The rest of his sells must surch liquidity lower.

There are more flaws in the video but anyway...
Nice catch, anyway Frank have to push price higher first to trigger the buy stops so he can get filled at the same price for his 75M :-)
Author:  Forexfux [ Thu May 16, 2013 8:26 pm ]
Post subject:  Re: The fox and the market
lhDT wrote:
Forexfux wrote: Nobody has a clue what i was refering to?

Frank the hedge fund trader wants to sell $75 million EUR/USD. At the first glance everything looks okay. He can sell $25 mil at 32195 and the rest of $50 mil is sold at 32190. But when you hear his exlpaination and when you look at his second secreenshot you will notice that Frank wants to sell the whole position at 32190 and then the price slipps up to 32195. The guy from the video says the price moves up a half tick to fill new bids at 32195. Frank has now to pay $25 mil x 0.5 pips more transaction costs.

Sry dude but when I would buy $75 mil at 3210 and try to sell the whole position at 32190 and get a fill of 1/3 of my position at 32195 I would be very happy. Is it better to earn 9 pips or to earn 9.5 pips? My earnings would be higher not lower.

Frank would be f... up when the price would tick a half pip lower at 32185.

And since when ticks price up to fill bids? Price ticks up to fill offers. When there are more buy market orders than offers price must tick up to find more selling liquidity. Frank wants to sell $75 mil. There is only enough buy liquidity to fill 50 mil at 3219. The rest of his sells must surch liquidity lower.

There are more flaws in the video but anyway...
Nice catch, anyway Frank have to push price higher first to trigger the buy stops so he can get filled at the same price for his 75M :-)

Maybe lio :-)

I doubt that Frank would try to sell $75 mil without distributing the position wisely.
Author:  Forexfux [ Thu May 16, 2013 8:35 pm ]
Post subject:  Re: The fox and the market
Nice little lesson by fti how dealers work:

"For dealers, its a different game, because when markets are going up in a BEAR market, customers keep making them short,
their book keeps getting bigger short, but their average cost of being short keeps going up.
all they have to do is to wait for the trend to enforce and
when the market returns to the point where the buying started ,
he would make nearly the amount of money that made him short in the first place.

For this to happen, he has to have a book big enough to accommadate the customer base.
AND as the market swings back towards the start point, he has to ascertain that his book of shorts, be kept constant.
This is because on the way down the customers will be making him long.
So by constantly covering back to back on the way down he maintains his book short.
So for the dealer, as long as he maintains his poise in the direction of the markets major trend,
he will always make "scalp money", guanranteed.

His modus operandi, is to "duck and move quickly"
so as to have a better average on the up swing towards stops to maximise his shorting near the top of the swing.
This scenerio is most effective if there are stop near levels where he las a large order to sell,
where he can help the customer sell OB and "kill the sitting duck stops" in the same blow.
Another senerio is where by the heavy selling is CB levels or specific sell zones,
where many teir 1 are ready to pounch on the buyers.
You must understand that only tier 1 and some big tier 2 will have this advantage.

This is the reason, why you have rubber band snap backs in the direction of trend directions,
and slow puffy moves counter trend.
Am I making any sense to anyone here?

So we use daily trend as the direction to build book size and short charts to make market for retraces.
Do discuss this on this trread, no questions are silly, just discuss until it becomes clear.
Don't understand !, argue until you understand.
Fight if you must, I will not complain.

YOU MUST GET THE CONCEPT OF MARKET STRUCTURE RIGHT TO UNDERSTAND THE CHARTS."
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