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Order Flow - Finding cluster of stops on chart
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Jan 4, 2011 10:16pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Carnegie What we have is FXCMs orderbook, OANDAs orderbook etc. which wont help at all because no big banks or big indivduals trade their order thru these small retail brokers.
| I know Oanda orderbook is open for public, but haven't heard of FXCM. Or did you just mean that they have their book but don't disclose it? | 
Jan 16, 2011 10:14am
|  | Junior Bastard | | | | Quote:
Originally Posted by Adal Technically speaking he only moved his market. If the others dealers don't also move, you can make a buck - buy at one other dealer at 1.2550 and sell at this dealer which just moved to 1.2570 for a quick 20 point profit.
| It won't happen. The dealer only moved his ask to 2570, not the bid. | 
Jan 18, 2011 4:01pm
|  | Junior Bastard | | | | Quote:
Originally Posted by sergiu
...You would also need a solid paid news service such as IFR, for information/rumors about option barriers and such. Knowing someone on the inside of a large bank or brokerage also will not hurt. This is all sources of information, and it is that information that is at the core of a trading strategy using order flow. | IFR info is available on Oanda and FXCM. Never tried FXCM but Oanda but saw it on Oanda news and it looks like it lacks the order board info. The only useful info I found in Oanda news was Options calendar. Maybe Oanda version of IFR is just incomplete, does anyone know? | 
Jan 18, 2011 7:10pm
|  | Junior Bastard | | | | Pending is visible liquidity which can be seen on level ll, latent is the invisible part of the iceberg. | 
Jan 18, 2011 7:23pm
|  | Junior Bastard | | | | Quote:
Originally Posted by eurotrash The implication is that it takes a certain amount of buying power to move the market in a given direction, but less to move it in the opposite direction after the fact. Exiting the position would consume the same amount of liquidity in the opposite direction, but the opposite direction's liquidity is now thin. Therefore the market mover needs those red techie orders which will be consuming liquidity in the market's direction. But I feel that this explanation is right where we started.
I did, but I can't say I understand what it is. I'm aware of... | I dont think red (tech) orders are stops, they are limits adding to the liquidity. | 
Jan 18, 2011 7:25pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Darkstar Good. Now what is the implication? | Good illustration but it's nothing new to me. The only implication i come up with is that fading is the best strategy. | 
Jan 18, 2011 7:43pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Darkstar Seems like a pretty important implication to me. Why so quick to disqualify that answer? | Important it is. I didn't say its not important, I said it's nothing new, I always fade (thanks to your valuable posts btw  . The trick is that fading alone is not a strategy, you need to know when and where to fade. Fading the stops is a good way to trade, which again brings back the subject of the post. | 
Jan 18, 2011 10:11pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Darkstar hmmm.. sorta... since you've all been very helpful, i'll give you some insight. | Now all we have to do is find the fundamental value of the pair (which we don't even need to discuss since everyone can do it) and just fade any disbalances of price and fundamental value into the direction of the value (ok, I'm kidding, it's the perceived value) | 
Jan 18, 2011 11:49pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Darkstar All things in due time my friend. Look, I know you guys are trying to figure this stuff out and I have to say, I'm really impressed with how far you have gotten. I'm sure it would make an untold number of people happy if I would just come out and give you all the answers, but I don't know that I could even if I wanted to.
[color=black][font=Verdana]To be honest, I "finished" my book like a month ago. After something like 8 months of diligent work, I managed... |
You can't imagine how many people here wish they were your girlfriend.  | 
Jan 22, 2011 11:07am
|  | Junior Bastard | | | | Quote:
Originally Posted by Carnegie Thanks cindy that actually explains quite a bit. I really should have studied supply and demand before even thinking about order flow but hey.. you learn
You explained it quite well cindy and this is my take on what you said and applied to the market:
Equilibirum is when supply and demand are even. In this case liquidity is evenly distributed so every seller has a buyer and vice versa. In this case, price doesn't move much when large orders are executed?
Efficient price is when it is the value of the currency that is "agreed" upon. In this... | Don't forget that in markets there are two kinds of demand and supply - active and passive.
Passive is represented by liquidity. Limit sell orders above the current price are passive supply, limit buy orders below current price are passive demand.
Market buy orders are active demand, market sell orders are active supply.
You need to consider all of these 4 plus other factors. When people say "the price is rising because there's more buying than selling" it is now always true. That's why DS showed us the liquidity curve. | 
Jan 22, 2011 3:18pm
|  | Junior Bastard | | | | Quote:
Originally Posted by CindyXXXX Its not about TRUE VALUE its about PERCEIVED VALUE - Stock prices don't rise becasue the companies necessarily performed well - It rises becasue the consensus believe it is worth buying | Exactly. Finding the "true value" is what fundamentalists are trying to do. Finding the perceived value is the function of the market itself. | 
Jan 23, 2011 11:07am
|  | Junior Bastard | | | | What I will say here is not directly related to finding stops but it's about orderflow. I'm reading Master the Markets by Tom Williams and here's how he explains why previous ranges act as supply zones in stock market.
Lets say the market formed a range and then the price went down. The buyers from the range are now in a losing position and want to get out at least at breakeven so they place their sell orders at their entry and thus create supply at that previous range.
I'm curious if the same scenario also works in fx. If it does it will work both ways at the ranges above and below the current price. | 
Jan 23, 2011 12:11pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Carnegie This works in all markets. This is how price "moves".
J16:ers call them PPZ (price pivot zones). Resistance turns into support when it is broken and vice versa. | I knew of this phenomena from charts, just didn't know how it's related to order flow. | 
Jan 23, 2011 2:26pm
|  | Junior Bastard | | | | Quote:
Originally Posted by LasVahGoose you can probably place an order on either side of a round number randomly in either direction and grab 10-20 pips if you wanted to trade that way. There are always going to be orders above and below those areas (don't want to say always like 100% always, but 'almost' always).
So are Order Flow traders mostly scalpers? I kind of get that impression... Nothing wrong with that, just curious. | If you believe the commodity is undervalued and big players are running for stops to load up their inventory this could be swing to long-term order flow trading. | 
Jan 23, 2011 6:49pm
|  | Junior Bastard | | | | Quote:
Originally Posted by Deevz You think so? I'm a firm believer of that dichotomy, or the informed/uninformed, or smart money, however you call the model. The fact that there are traders out there that can be manipulating or tricking others into taking the other side of the market, thus the why retail traders are wrong most of the time. Every bit of evidence seems to point in that direction, in my opinion. | I guess Darkstar was trying to say that even after retail traders disappear there still will be uninformed traders. Do you think all that trap thing is designed purely for retail crowd? There's still a lot of automated trading going on and it's behavior is pretty much predictable. | 
Jan 23, 2011 7:41pm
|  | Junior Bastard | | | | @ DS: In order to "deconstruct the logic of participants" you need to know the actions of these participants. Where do you get that info from? IFR? | 
Apr 13, 2011 6:59am
|  | Junior Bastard | | | | Quote:
Originally Posted by EmeraldEyes First level of sell stops got wiped out yesterday. Second level of stops looks to be ran soon.
green=sell stops
red=buy stops  | Yeah I'm watching these too. Is the chart your primary source of stops/liquidity info? | 
Apr 13, 2011 8:20am
|  | Junior Bastard | | | | Quote:
Originally Posted by EmeraldEyes Ya charts are all I'm using. | Charts alone are good too. Less conflicting info - simpler set of rules. |  | |
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