Discounting Market Discounting — If price’s only function were the discounting of all available fundamental data we would expect prices to only change when the underlying fundamental values change. Price would move horizontally over time at a ...

What Is a Trend?

Volatility and Its Two Components — In the book “Trading and Exchanges” Larry Harris provides a possible explanation for the phenomenon of price changing more rapidly than its underlying fundamentals would dictate. He states, “Total Volatility ...

What Is a Trend?

Single Data Points Contain Error — Each price that is recorded in the case of a transaction based market, like the futures market, represents actual transactions that have taken place at a given price, time and volume. In quote driven markets ...

What Is a Trend?

Objective Start and End Times — Now that we know the minimum number of data points that we can choose, we can go about determining where to start our trend tests and where to end those tests. The criteria that I stated previously is that the ...

What Is a Trend?

Determining the Data Set — A trend cannot be derived from two points. Two consecutive days of cold weather don’t constitute global (or even local) cooling. A trend requires a statistically significant number of observations, and as such we ...

What Is a Trend?

Underlying Assumptions Borrowed From the Field of Research — The field of research has much more rigorous rules for inferring trend vs. the field of technical analysis. Allow me then to raise the bar and provide some basic assumptions that I ...

What Is a Trend?

Why So Many Get Trend Wrong — Why is there a lack of clear and objective definitions of trend in the various books and articles on the subject? Why are the same old, tired, and vague definitions thrown around on forums and in books by even ...

What Is a Trend?

I came to the same conclusion. The IB is merely a way to minimize the cost of the many failed entries. Also, the rule to only trade in the direction of the price to open relationship is probably the strength of the DIBS strategy. I've also noticed ...

Stating The Obvious and The Quest For Wisdom

Here's a sad reality: Even if the actual figure were 99.9% losers, 100% of the traders in the market would still believe that they have a legit shot at that 0.1%.

95% losers - Fact or Fiction?

This got me thinking about an example that some on here might be able to relate with. Imagine a "normal" guy out looking to meet a "nice" girl. He goes out to a place where "nice girls" hang out so he probably ends up in a bar or nightclub instead. ...

Stating The Obvious and The Quest For Wisdom

Got Market Structure...What Next?! — Hanover: The main (and most lasting) points in market structure study or the auction market theory, seem to be imbalance and balance. And so understanding that balance is mostly a random distribution - ...

Stating The Obvious and The Quest For Wisdom

Normal Standard Distributions — Hanover: There are rules to normal distributions. Lots of very smart academics have made their bones by identifying characteristics of these distributions, writing papers on their discoveries, and generally ...

Stating The Obvious and The Quest For Wisdom

Or perhaps there is a different question that could be asked. Is there a way to identify non-random market movement? And a follow up might be, can it be objectively defined? If we break the market down in terms most recognize or understand, we might ...

Stating The Obvious and The Quest For Wisdom

You Can't Beat the Market — I think it's true what you wrote - you really can't beat the market. Its returns consist of what is possible - if we are with it. And really, there is no need to try and outsmart it or fade it or to turn losing ...

Stating The Obvious and The Quest For Wisdom

I want to clarify a couple of points as I've used IB for about 10 years now. The spread is variable, based on the banks and liquidity providers who quote it. IB is not your FX counterparty but acts as a broker - charging a commission for making the ...

Interactive Brokers - experiences and opinions

Implied in your premise is that most of those on this board are trading in the real market. In fact, most here trade through 3rd parties and the trades never hit the real market. Market makers don't move their prices based on customer flows. They ...

Can we Move the market?

You're correct my friend. My studies on the subject of order flow have taken me far and wide. I've been at this a long time and I feel like my education has finally started to round out. The book mentioned several times in this thread (Larry Harris ...

(binned per thread starter's request) Behind Price-Orderflow

Hey Alex, thanks for the thread. I'm looking at the EURO daily chart you posted (#561) url and wonder how you interpret the volume information there. Are you looking to sell on a retest to the 1.4337-1.4349 POC or does that become a possible ...

Principles of market movements

I wish I had written that. Sounds exactly how I've experienced it. One of the keys to finding that edge has been in accurately seeing the market for what it is. When I started out in the trading arena, I learned most of my trading base of knowledge ...

Strategy of losers