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  #36  
Old Jan 10, 2011 6:03am
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Originally Posted by Carnegie View Post
Likewise, techincal traders anticipating a move up here since it is a Support and Resistance area have their stops (MOST LIKELY, NOT GUARANTEED) just below the consoldation area, and if price moves down there their stops will result in SHORT orders and price will cascade down.

The idea is that there are technical traders trying to catch a long BREAKOUT from the consolidation by setting up orders above the consoldation price action. Equally, there are breakout traders trying to catch a short movement (i.e. having stops below consolidation) and...
I don't know that the techies necessarily went long at the first sign of support during the consolidation. I think they would have had orders waiting on both sides. When price broke downwards, they were probably in the trade short. If price then came back up, it could have triggered their stops above the consolidation range. That's one scenario.
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  #113  
Old Jan 16, 2011 9:40am
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Originally Posted by CindyXXXX View Post
Actually Scotty that has cleared a few things up for me.... I've always wondered how a market can turn on a dime off such little amounts of volume against the prevailing trend.
Well, when you have clusters of candles together, you have liquidity being dried up. Especially if the orders coming in are market orders, which I think they tend to be. I may be wrong, but I believe most limit and stop orders come in outside of consolidation ranges. So when all liquidity has been dried up within one "side" of a range, price can take off like a rocket.
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  #123  
Old Jan 17, 2011 10:39am
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Originally Posted by Darkstar View Post
Knowing how it ends I know exactly what piece your missing, so I'll give you a hint:

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.
Awesome to have Darkstar in here. I read everything he posts and hope he continues to visit here from time to time. BTW, how's the book coming?

Price change acts to soak up liquidity and when it does that, it'll go in search of the next big area of orders. If there is a disequilibrium on one side of price (in the form of thin liquidity) it is much easier for price to move in that direction. If you can identify clusters of orders just beyond that area, you have a good idea which way price is headed.
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  #179  
Old Jan 19, 2011 4:58am
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Originally Posted by CindyXXXX View Post
Insipiring thread and inspiring post thank you. I agree figuring it out my/our selves would be far more worthwhile than having it spoon fed.
I agree. What DS has shared already should be enough to get everyone started in the direction that will help their trading. If it hasn't, maybe they weren't meant to have this information?

Darkstar, if you continue refining your book to the point that anyone can pick it up and make profit from it, do you worry you've let the cat out of the bag? I'm sure your own personal trading is way beyond that, at this point, though. I would be thrilled to read your book as it is. Part of what makes order flow so awesome is the self-discovery process that takes place.
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  #275  
Old Jan 21, 2011 1:35am
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Originally Posted by deanz View Post
Darkstar said "produce ideas about exploitable situations" ... "set about looking for situations where the phenomena you noticed within the model occur"

well I'm not that smart, so I do it the other way around, I see what I see and try and explain it, so here it is.
Just my opinion that VSA is worthless -- or in the very least, not needed. You're searching in the wrong direction.
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  #278  
Old Jan 21, 2011 2:42am
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Originally Posted by EmeraldEyes View Post
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.
Good post. DS said we should start looking in this direction after figuring out stops -- which he was kind enough to help us with.

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?
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  #347  
Old Jan 23, 2011 3:17am
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Originally Posted by LasVahGoose View Post
Off topic, but gold isn't even close to being in a bubble. All the commercials I see are 'scrape gold for cash' which tells me that gold is still cheap and they want to take it off the hands of people that don't know what is going on.
Yep, Goose is right. The Chinese are buying more and more gold. If their economy starts slowing down, then maybe we'll see indications of a bubble. But then maybe they'll just buy more ?!
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