Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
No they're not all iceberg orders. If you do a search it is explained somewhere why an iceberg order indicator isn't much help. Might have been from the guy who runs jigsaw trading?
EDIT I mean do a search in these forums for jigsawtrading's comments (I think it was him) on iceberg orders. Something to do with how orders are sent through and how they're read by software, I forget the details. I think TT ,( a front end trade system) used by big traders effectively hides an iceberg in the order books or something like that so you'll never get the full picture. Can't find the link-sorry.
If you understand where liquidity lies, why it's there, and how it can be used (sometimes) then it will greatly help how you view the market. At major highs and lows many traders will wait for a candle close above/below the level to confirm price has broken through properly.
Everyone, remember that disagreement is OK, but over-heated or personal language is not.
Please keep the tone within the forum's normal bounds of civility, and then disagree as much as you like. But make it on the substance, rather than personal.
Thanks.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Great example in Eurgbp happening right now.
Chart 1-daily chart
You can see such strange liquidity sweeps occurring a few days in a row
Chart 2
4 hour chart of same period
Note the penultimate 4 hour bar which is a pin bar. Price has broken highs and rapidly retraced lower.
Chart 3
5 min chart of this 4 year period
Ignore the solid trendlines-they are longterm levels and are not relevant to what is being discussed. Look at the dotted red lines. It shows the price trading in channels and it's these zones where longer term players will be using to either load up on more longs or liquidate their longer term short positions. I'm not stating any firm preference for direction at this point as there is fundamental news going on in eurozone and I'm not too sure how it affects these two currencies.
Hopefully people can see and understand the process that is going on here through looking at the longer term timeframes, then seeing how it plays out on the shorter time frames. Price could go lower on the 5 min chart and yet still break out higher as the larger long term players would be accumulating positions at different levels and therefore they will be working on an average price scenario. eurgbp1
The thing about "explaining" charts in retrospect is that there are so many of them, and so many patterns, that it's possible to "prove" anything at all - including completely opposing viewpoints. I've had a "certified market analyst" argue, angrily, that the patterns on the chart I showed him proved that his theory (I don't recall which one it was) worked... except that the chart happened to be the random output of a GBM generator that I had written.
That's not to say that all analysis is bunk; I know a number of people who do well with their trading based on the theories that they've learned and/or developed. But I have a VERY strong suspicion that 99.9% of folks pounding the table about their brand of tea-leaf reading would shy away from, say, a $1k bet on their being able to actually predict market movements with a significant win percentage. And while it is reasonable to assume that price action indicates the movements of the larger operators in the market, I don't believe that it would be trivially easy for anyone to track those movements - or, given options/synthetic positions/hedging/etc., to even really understand them the majority of the time. To put it plainly, it would be stupid of them to expose that kind of information to their competition... and people managing large amounts of money aren't selected for their stupidity.
(One of the things that I was taught by an old African hunter is that tracking predators, especially wounded ones, is one of the most dangerous things in the world; they almost always circle back on their own track and lie in ambush. I can't even imagine a large-scale trader who doesn't understand that principle.)
They're not patterns. They are prices that are reacting to orders coming into the markets and conflicting with each other. Obviously by calling them patterns you are attempting to diminish the significance of how and why price does certain things at certain levels. My posts are an attempt to explain this.
If you read them carefully then you will note that it does not mean that people are right 100% of the time. The big boys have conflicting views on things as well, whilst on the longer term you have the issue of changing fundamental info which changes where price should be.
My posts are based on understanding order flow, what it looks like and how the large boys operate. If you look at 5 min charts only and trade them without a longer term appreciation of these factors then you're destined to be in trouble.
I'm not saying it's a system. It's just understanding the market structure and explaining why the price does strange things like take out stops and then reverse many times. A system would be accurately working out when these prices are reached whether to trade a breakout scencario or trade a reversal scenario.
You will see that the eurgbp example is realtime btw so when you say "The thing about "explaining" charts in retrospect is that there are so many of them, and so many patterns, that it's possible to "prove" anything at all " I'll take your apology. You can see how it pans out and give your take on it perhaps? BTW price retraced to the top of that channel and then dropped again. Must be luck on my part. Or coincidence just this once.
Yeah nice, African hunters, great advice.
After all of your reasons saying why this is all bunkum, I'm yet to hear your theories. Is it all random? Please do tell as you seem to be great at criticising using standard trader tales of woe without actually adding anything yourself to the original question that was posted.
algo stop hunting. a algo hunts liquidity , your 1 lot stop is not going to attract an algo. having stops to tight for the volatility of the instrument is almost as bad as not having stops. using a 4 to 8 tick stop on the ES for an example may be to tight . i had a problem trading the ES with that small stop. i tried holy grail domes and foot print charting trying to make the stop i wanted to use work. i could not get the job done .i must be a bad trader or stupid . i went with a 5 point stop and looked for 15 to 30 point targets . that worked for me. hope it helps
I am not sure why you need to justify yourself in any way.
Trading is one of those endeavors where whether you think you can or whether you think you can't you are right.
Chart patterns don't mean anything without an understanding of the double auction process that's creating it.
You lucky dude.....
I'd appreciate it if you'd back off the accusatory tone, as you've already been asked to do.
Now: it's not about me "attempting to diminish" anything. You have a theory, and until you can support it, there's nothing to "diminish"; it is false until proven otherwise. That is what the term "theory" means.
Re-read what I wrote. Carefully. I explicitly did not say "100% of the time".
This makes no sense at all. A screenshot is "realtime"? What?
If there was ever a reason to tender one, you would have received it. Meanwhile - there's only one of us who started, and is maintaining, a hostile tone - so while I agree that apologies are owed, you have the direction wrong.
Re-read what I wrote. Note the "significant win percentage" phrasing. Anyone making a 50/50 guess is going to be right 50% of the time; that's neither convincing nor interesting.
Re-read what I wrote. Especially the part where I explicitly said "that's not to say all analysis is bunk". As to sharing my theories - why would I want to do that? Whatever I have, or don't have, is not relevant to your theory's falsity.
P.S. I'm not going to respond to you any further; between your obvious (barely suppressed) hostility, inability or unwillingness to understand what I wrote, and refusal to address the actual glaring flaws in your idea, I don't see anything productive coming out of it. Good luck with your trading.
You're correct, that 1 stop won't. But when they're in obvious spots where breakouts occur then it's not just your stop. You're one of many because these are popular places for people to place their stops. Add on those who will be buying the breakout. All add to the liquidity that those larger traders use.
Until price moves to a new level as these stops are eventually traded through and.price moves to a new technical level. Or fundamental market moving news comes out rendering these old levels to be old news.
