thread: Order Flow - Achieving the mindset

66950

Hi Carnegie,
I think it is better that I pass on posting anything, and I will check from time-to-time to see what is developing here. I have been reading some of this substance which DS and Gaston have submitted. I would recommend a read through the Technical Analysis Falicy thread for's substance on market arrangement, also, if anybody has the time ( conducted a tier one currency surgeries in Sinapore but is not around much now because of health reasons). Good luck everyone and good trading (been good today up to now!) .

Good guidance

to not take away from what is being discussed here, but a look on his thread for his articles with order flow, market structure, hitting, ducks will pull some good reads....

Here's a quote from him about order flow, and his mindset by a Tier 1.

https://www.cliqforex.com/trading-sy...ding-grid.html

66950It is not just currencies interact between each other to identify some sort of inefficient pattern.
Noticing what's happening in the futures and options market is very important.
In which of them may be made cash with little work and on which can be your focus.
The cash shing can be very divergent one of these to a particular point and you need to understand the reason is that and then how to exploit it.

98038

What I said are alternative principles. No key that there As always, the key is in being one step ahead of the market.

I am not a fantastic teacher, so I searched for some explanations of exactly what I said. Here's what I discovered. You are likely to find better ones.

Http://www.eurekahedge.com/news/16_j...ty_Trading.asp

[I]Compared to the relative...

Thank you for the info Adal,

I simply had a bit of confusion taking it as the said-same Wikipedia puts an importance on the inherent price of the alternative; ie. the spot-rate.

Http://en.wikipedia.org/wiki/Option_style

In fund, the style or family of an alternative is a general term denoting the course into which the option falls, usually characterized by the dates on which the option could be exercised. The huge majority of options are European of American (fashion ) options. These options - as well as others in which the payoff is calculated equally - are referred to options. Alternatives where the payoff is figured are egorized as'exotic options'. Exotic options can pose challenging problems in evaluation and hedging.

The vital difference between Western and European alternatives relates to if the options can be solved:

A European option could be exercised only at the expiry date of the option, i.e. at one pre-defined point in time.

An American alternative on the other hand may be exercised at any time prior to the expiry date.

For the two, the pay-off - if it happens - is through:

Max [(S-K), 0], for a call option
Max [(K-S), 0], for a put option;

(Where K is the Strike Price and S is the spot price of the underlying asset)

Alternatives contracts traded on the futures exchanges are primarily American-style, whereas individuals traded over-the-counter are primarily European. (ie. Forex)

Maybe the discrepancy can be explained by the way we interpret alternatives to be used? Whereas my opinion is towards that of a more insecure role perhaps you are taking a look at options from a volatility standpoint?

Regards,

66950

Perhaps the discrepancy could be explained by the way we interpret options to be utilized? Whereas my opinion is towards that of a function that is speculative, you are taking a look at choices from a volatility arbitraging standpoint?

Of course it's possible to use options for directional speculation. But the majority of the choices sellers are forced to delta hedge the choices utilizing the underlierthey engage in volatility arbitrage if they would prefer to not.

Anyhow, this is a bit off-topic with this order-flow thread. I only wanted to highlight that when you sell or buy an option, you do not necessarily need to guard the price, you may need to defend/attack the volatility instead. Think about this when you visit three times in a row at which EUR/USD stays put or rises or any time you see a sudden spike. I am not implying that someone manipulates the marketthat some choices players will make/lose a lot of money on the times or about the calm times.

98038Yesterday I read there were a larger option at 0.9850 in USDCAD and if you have a look at the chart, there's been some effort to fight for this.

It eventually gave away, but in my mind, that must be some kind of inefficiency. Because if you say that banks seek the option to save their own ass, then price has moved down irregardless of value. If it moves down irregardless of value then the price is ineffective.
Therefore the price isn't efficient and the option hunt is over, my order flow mindset tells me that this could tempt traders to enter LONG.

I've a lengthy entrance at 0.9850 price currently 15 pips away. Let's see how that one works out, in my mind. . That is one kind of inefficiency although price dropped to attempt and split it but was transferred away. So hypothetically, price should move up to ~0.9950.
Likely wrong but just testing and learning.

Take good care, and btw all opinions are welcome.

PS. Another question the most significant one for me.
I don't know why you are talking about stops when we are talking about choices? Do you mean that there are stops the choices? And why would that be? If somebody was trying to defend their of option right that would just be the case. . In that situation there could be stops above/below. . And that really makes stop hunting ideas more easy to understand?

98038

Yesterday I see that there were a larger choice at 0.9850 in USDCAD and if you have a look at the chart, there's been some effort to fight for it.

It eventually gave off, but in my head, that has to be some kind of inefficiency. Because if you state that banks seek the choice to save their ass price has transferred down ton of value. If it moves down irregardless of value the price is ineffective.
Thus the price isn't effective and now that the option hunt is over, my order flow mindset tells me that this could entice traders to...

Carnegie, this exactly what I have been attempting to talk about with respect to options. I'm only a n00b here, but basically what you typed is exactly what I've been trying out.

98038Guys, I might be completely wrong here; but if you examine the chart for the downtrend could be an USD weakness. In that circumstance, the downtrend might not be an inefficiency. Only me 0.02.

Thanks.

98038

Yesterday I read there were a bigger option at 0.9850 at USDCAD and if you have a look at the chart, there has been some effort to fight for it.

Now it eventually gave off, but in my mind, that has to be some kind of inefficiency. Because if you state that banks seek the option to save their ass, then price has transferred down ton of worth. If it moves down irregardless of worth the price is inefficient.
Therefore the price is not efficient and the alternative hunt is over, my order flow mentality informs me that this could entice traders...

Why buy at 0.9850, once you are able to wait for the level to be busted and buy at 0.9840 / 0.9830?

What makes you think there are aggressive buyers to select the price up 100 pips? Sure price may have left a false breakout to 0.9820 and bounced, but does that automatically mean the the fundamental value is at 0.9950?

Also take note there is probably another alternative barrier at 0.9800. The folks hunting don't want price to spike 100 pips.

How do you know that the inefficiency you are describing has not yet taken any market moves have already happened?

Why hasn't the price transferred yet? What is the market currently waiting for? Where would be the order flow generators to maneuver price up? What is taking them so long?

The longer you hold such trades into the couple of hours to couple of days, you become vulnerable to the order flow from market sentiment. In case the opinion stays bearish or accelerates to the drawback your commerce is smoked.

98038

PS. Another question the most significant one for me.
I don't understand why you're talking about stops if we are referring to choices? Do you mean that there are stops? And why would that be? If someone was trying to shield their of choice 16, that would be true. . In that situation there could be ceases above/below. . And that makes cease hunting ideas easier to comprehend; IF IT IS SO?

If you know that there is a massive choice on the E/at 1.3650, which it expires tomorrow, you could place your stops a safe distance above 1.3650 because you know that the massive bank that composed the choice will shield that price level, which may make your discontinue safer, at least in your mind it is safer. Who can you argue, if someone very large is willing to defend your stop? However, after the choice expires, the premise is that there are lots of stops over 1.3650, or so the market may sweep them as a simple liquidity drama.

98038

Why buy at 0.9850, once you can wait for the level to be broken and buy at 0.9840 / 0.9830?

What makes you think there are competitive buyers to take the price up 100 pips? Sure price could have left a false breakout to 0.9820 and bounced, but does that necessarily mean the the fundamental value is at 0.9950?

Also take note there is likely another alternative barrier in 0.9800. The people hunting do not want price to spike 100 pips.

How can you know that the inefficiency you are describing has not yet taken any market moves...

Are you indicating using alternative barrier information is not a legitmate way to exchange, or that we must rethink the way in which we use that information in our trading?