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  #45  
Old Jan 12, 2011 7:43am
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From what I can conclude when doing OFA, 'pivotal' areas are areas where heavy orders and volume have taken place which tend to have a type of gravatational force on PA. Confluence with calculated pivot points make the trade more consistent.
Chart example: today's R1(1.3035/1.3045) -> Pivot(1.2970/1.2975)
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  #124  
Old Jan 17, 2011 12:11pm
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Quote:
Originally Posted by Darkstar View Post
Think about how price change and the distribution of liquidity interact. Your looking for a disequilibrium in that distribution which should give you a highly predictable outcome. Trade with the anticipation of that outcome and you have the makings of a high probability system.

Once you manage to solve that, I suggest you start working on the concept of Episodic Volatility. It has opportunities that make stop hunting seem low rent by comparison.
episodic volatility; large price move within a short amount of time.

Here's my shot at understanding: We're looking for signs of transitory volatility; which episodic includes. Transitory volatility is strong price movement away from fundamental values by uninformed traders. I relate uninformed traders to losers. What's one way to show you lost your trade? Your stoploss order gets hit. Stop losses are one-way market orders, and along with uninformed traders using breakout market orders could easily move price away from fundamental values.

I'm unsure but do dealers accelerate their pulling of limit orders at extreme price levels, thus leaving less available liquidity which invites bid/ask bounces and the more chance for episodic volatility to occur? If so, do they then hope to deal with "informed" traders asap to know where price is going?

Would large orders seen on T&S in the opposite direction of the move during these volatility extremes be a sign that informed traders are entering the market?

Magic Trader I fully agree with your posts. Price tends to pivot across large order areas. Just when it gets to the very extremes and some, it comes running back the other direction.
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  #133  
Old Jan 17, 2011 11:37pm
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Quote:
Originally Posted by dr_who View Post
What surprise me is that no one provides a service which collates all the data from the major brokerages into one data stream. Order flow analysis would surely be much easier with that sort of data.

Or does anyone know of such a service ?
Yes you're on to it. This type of service is necessary to communicate correct exchange rates between banks. ICAP's FX Spot (EBS) is an example of this service. Correct me if I'm wrong about ICAP(EBS)'s role in the interbank market.
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  #227  
Old Jan 20, 2011 5:09am
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Default an example of order flow

At times of high market liquidity, the various classes of market participants are correctly proportioned and a more accurate value given. When lower liquidity is present because of liquidity suppliers guarding against risk during various events the market has a high probability of episodic volatility occuring.
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  #277  
Old Jan 21, 2011 2:30am
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Quote:
Originally Posted by Carnegie View Post
This liquidity vacuum stuff is KILLING ME. So what if there is a liquidity vacuum there, in theory it might be, but it is impossible in practice because the dealers MUST have liquidity there, so there is no vacuum in reality?
You're close dude! The underlined section: Why do you think dealers must provide sufficient liquidity at all times?

Quote:
Originally Posted by Carnegie View Post
Also, I'm more than 100% that more orders will start pouring in and "block" that liquidity vacuum that was there (with sell orders) resulting in that price could never move back to that price area again. What is it that I am not understanding here?
Price could very well drop out and not return. One of the examples of it happening is fundamental volatility (from DS's book quote) which is when price stays the same, yet the fundamental value (latent traders) has shifted which may not take effect right away.

Quote:
Originally Posted by scott89 View Post
Thanks for the explanation =)

Now, again, what's the best way to trade it?
I dont believe there is a best way to trade this, and its not mechanical. Beiing able to consistently adapt to current market structure maybe.
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  #280  
Old Jan 21, 2011 3:34am
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Quote:
Originally Posted by Magic Trader View Post
So the question is, when does liquidity drop and volatility jump? (Or: Does liquidity have to drop in order for volatility to increase?) Certainly during news which can also relate to a change in fundamentals. It can also happen during off-peak market hours. Anyone else want to chime in and keep this thread moving?
Good question. Can limit orders slowly start dropping when market orders are more attactive to their participants (and their time to manage trades) causing increased chance of volatility rising? I'm not sure.

Pre-news release is all I got on that one. It'd be great to hear other types.
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  #281  
Old Jan 21, 2011 3:39am
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Quote:
Originally Posted by Louie View Post
I will take a stab at this to help another trader on there journey. When the vacuum happens the dealer has to take the other side of the trade by offering the liquidity which puts them on the wrong side. They are constantly trying to keep their order book even making money only on the spread. So if you were in this situation what would you do to even up the order book? Hopefully i didn't screw up the explaination.
Hmm.. are you saying when a dealer realizes this shift in which they're losing to informed traders then they flip their game plan and start trading with them?
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  #457  
Old Jan 26, 2011 8:08am
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@ all the charts
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  #480  
Old Jan 31, 2011 6:24am
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Good read. I felt deja vu after the first page. I didn't know Larry's real name was Lawrence.
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  #493  
Old Apr 12, 2011 3:57am
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Default 4/12 Hunt

Some very profitable stop running & hunting during an illiquid asian session today by just using round numbers. Hope some got in on this!



Green lines are buy stops, red sells. round numbers.


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  #494  
Old Apr 12, 2011 11:08pm
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Default USD/JPY stops so far this week

First level of sell stops got wiped out yesterday. Second level of stops looks to be ran soon.

green=sell stops
red=buy stops


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  #496  
Old Apr 13, 2011 7:38am
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Ya charts are all I'm using.


EDIT 4/13 0620GMT: since I can't make a new post on here, good chance that E/U is running for new highs after fresh buys from sell stops @ 1.4420 level:




btw, those stops were ran on the U/J earlier.

Last edited Apr 14, 2011 1:24am
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