Need help in understanding the FX Futures Market - futures io
futures io



Need help in understanding the FX Futures Market


Discussion in Traders Hideout

Updated
    1. trending_up 251 views
    2. thumb_up 6 thanks given
    3. group 2 followers
    1. forum 7 posts
    2. attach_file 5 attachments




Welcome to futures io: the largest futures trading community on the planet, with well over 125,000 members
  • 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 and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

 
Search this Thread
 

Need help in understanding the FX Futures Market

(login for full post details)
  #1 (permalink)
Tony Pepperoni
Dresden Saxony
 
 
Posts: 6 since Sep 2020
Thanks: 1 given, 1 received

Greetings,

i wont waste your time and come straight to the point:

in the attached picture you can see a HUGE!!!! volume cluster at a market HIGH. It must be institutional volume and the Delta is ONLY -383 contracts. It might have been a news event, i dont know...and doesnt really matter.

My question is: WHO could have bought here and WHY?

Are market makers that crazy to provide all the liquidity or can 50% professional volume really be that wrong?


Thx

Attached Thumbnails
Click image for larger version

Name:	EURUSD footprint.jpg
Views:	63
Size:	301.2 KB
ID:	315142  
Reply With Quote

Can you help answer these questions
from other members on futures io?
Investment Advisors?
The Elite Circle
TradingView help in improving Anchored Vwap
Platforms and Indicators
For the experts of Metastock
Platforms and Indicators
Can anyone create Risk Manager for MT5?
Traders Hideout
MacdBB V402 NT804 + gradient + pullback not working on N …
NinjaTrader
 
Best Threads (Most Thanked)
in the last 7 days on futures io
How quickly do algos go bad?
76 thanks
Question about intraday margins
61 thanks
Avoiding Account Killing Freight Trains
24 thanks
How would you annotate this chart?
17 thanks
Spoo-nalysis ES e-mini futures S&P 500
14 thanks
 
(login for full post details)
  #2 (permalink)
 fivewhy 
Fort Lauderdale, Florida, USA
 
Experience: Beginner
Platform: NT8, Bookmap
Trading: ES, MES
 
Posts: 173 since Feb 2017
Thanks: 77 given, 170 received


Tony Pepperoni View Post
It must be institutional volume

My question is: WHO could have bought here and WHY?

Are market makers that crazy to provide all the liquidity or can 50% professional volume really be that wrong?

Hear me out when I say this: trying to figure out why participants in the market are buying or selling is a fool's errand.

I strongly suggest forgetting any desire you have to understand the "why" of what participants do. It doesn't do you any good whatsoever. You're trying to rationalize the market. First, you're never going to accomplish that. Second, trying to do so will on set you back by creating expectations in your mind about what the market should or should not be doing. Don't do that. Don't ever expect anything from the market.

Simply observe and respond. Don't be expectational.

---
Sidenote:

The first assumption you make is that the aggressive buys must be institutional. I have no idea where that assumption comes from. It could have been an aggregate of anybody.

Further, you don't know that those buyers at the high price are "wrong". You're assuming the aggressive buyers trade on the same time horizon as you and for the same purpose as you; and you have to know that that is not true.

It could have been options dealer hedging, it could have been commercial operators hedging fx risk, it could have been retail automatic algorithms go awry, it could have been foreign or domestic banks buying insurance against fx risk. Alternatively, it could have been a bunch of short term traders who did get it wrong. Or, the most likely result, is that it was a combination of all of that.

Either way, the correct answer was to observe that imbalance form and respond to it accordingly.

Reply With Quote
The following 5 users say Thank You to fivewhy for this post:
 
(login for full post details)
  #3 (permalink)
Tony Pepperoni
Dresden Saxony
 
 
Posts: 6 since Sep 2020
Thanks: 1 given, 1 received


Hi fivewhy and thanks for your answer.

i wrote a long text and deleted it again. My conclusion is: that some big guys were very nervous
and hedged their positions. They may have closed them in the following days and avoiding potential big losses
was worth the hedging costs.

I have added 2 more charts to show you the impact of this level.

Thx

Attached Thumbnails
Click image for larger version

Name:	EURUSD monthly.jpg
Views:	18
Size:	169.7 KB
ID:	315177   Click image for larger version

Name:	EURUSD Daily.jpg
Views:	20
Size:	89.7 KB
ID:	315178  
Reply With Quote
 
(login for full post details)
  #4 (permalink)
Tony Pepperoni
Dresden Saxony
 
 
Posts: 6 since Sep 2020
Thanks: 1 given, 1 received

The day is 18-06-2015, June or Sept contract.

Reply With Quote
 
(login for full post details)
  #5 (permalink)
 fivewhy 
Fort Lauderdale, Florida, USA
 
Experience: Beginner
Platform: NT8, Bookmap
Trading: ES, MES
 
Posts: 173 since Feb 2017
Thanks: 77 given, 170 received


Tony Pepperoni View Post
I have added 2 more charts to show you the impact of this level.

Thank you for your kind words. To be honest, my biggest problem is imprinting my expectations on the market and refusing to let go of my bias when I'm wrong. It's a constant battle, so maybe that's why I reacted so strongly. I was telling myself more than I was telling you. Anyway, we're all learning; even the folks who've been doing this for every day for twenty years.

I think you're point about the large volume cluster marking key levels is absolutely spot on. I think that is classic volume profiling principles, but stated slightly differently.

---

I wanted to attach two charts, running along the same lines as this discussion.

Both charts are 5min bars of the ES on July 19 (yesterday) and July 20 (today). The charts show volume dots of trades that executed within 100ms.

The July 19 chart shows two volume dots: a 481 market buy order at 4231.00 and a 613 market sell order at 4225.00. These were right around 130pm NYC time. Not huge orders, but are relatively large. However, price did not budge or did not continue in the direction of the market orders.

The July 20 chart shows a 568 market buy order at 4300.00 around 1040am NYC time. And price followed through.

I guess my point is to point out that the fact that the orders occurred, standing alone, is not what is telling.

The telling thing is that, on July 20, you can see additional buying following the big buy order (on the footprint chart with buy imbalances marked in green numbers), then everyone hopped on the gravy train and price continued upward (albeit in a painful grindy way, in this instance).

In contrast, on July 19, there was not a continuation of the same directional orders and price stagnated/chopped/rotated for about 30 or 45 mins after that.

So what the heck is my point? ...this is all just my way of saying: observe and respond. And I do not disagree with anything you've said. I very much appreciate your points.




Reply With Quote
 
(login for full post details)
  #6 (permalink)
Tony Pepperoni
Dresden Saxony
 
 
Posts: 6 since Sep 2020
Thanks: 1 given, 1 received

All good and thx for the charts.

May i ask what software are you using? I really like how it represents the facts.

Reply With Quote
 
(login for full post details)
  #7 (permalink)
 fivewhy 
Fort Lauderdale, Florida, USA
 
Experience: Beginner
Platform: NT8, Bookmap
Trading: ES, MES
 
Posts: 173 since Feb 2017
Thanks: 77 given, 170 received


Tony Pepperoni View Post
May i ask what software are you using? I really like how it represents the facts.

The charts above are from EdgeProX, which is a tailored version of Motivewave. EPX is something FT71 is basically creating and is only available through the EdgeClear brokerage.

It's hard for me to acclimate to new tools, I'm very stubborn that way. But the more I use it the more I like it.

Edit...I guess I should also say this is the "Volume Imprint" study and the "Big Trades" study. The VI study is super useful but it's like a whoooole lot of things built into one study. This is showing like one tenth of what the VI study can show.

Reply With Quote
The following user says Thank You to fivewhy for this post:
 
(login for full post details)
  #8 (permalink)
Tony Pepperoni
Dresden Saxony
 
 
Posts: 6 since Sep 2020
Thanks: 1 given, 1 received

Ah...i see. EdgeProX...something i want to try out for weeks now.

Reply With Quote


futures io Trading Community Traders Hideout > Need help in understanding the FX Futures Market


Last Updated on July 20, 2021


Upcoming Webinars and Events
 

NinjaTrader Indicator Challenge!

Ongoing

A Transparent Glimpse Into a Prop Traders Life w/Chris Gray @ Earn2Trade

Elite only
 

Our 12-year anniversary w/ $$,$$$ prizes (check soon)

August
     



Copyright © 2021 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada), info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts