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66950Depends on the broker, using a tier two prime broker that's in fact giving you interbank pricing from the 12/13 bank hub, you can configure it to see more, you can even use 4th decimal pricing on currenex, especially in the event that you want more volume... as I understand. Again I am not talking about the MM version viking CNX that you're becoming with FXDD for example... I mean fxtrades CNX.
Is it really needed though?
98038I don't know. I have although darkstar said you can get some useful advice from Level 2/DOM.
66950I don't know either...
However from plays he has explained, it didn't seem as if you did. Such as after the stops were triggered he saw the transactions, maybe he gained some insight from viewing it. But I am not sure...
66950My ideas
Is level 2 Important? I'd say it is dependent upon your morals.
I'm taking a look at using level 2 since after reading a lot into Order Flow I could see that TA Rsi Macd Ouija Boards Fibs (I could go on) have absolutely nothing to do with price. I remember reading Trading the narrative about the analyst and the Trader. The Trader picked up the telephone and placed an order which proved the analysis incorrect. Its orders which count. What I'm taking a look at is visiting if its possible to track the bids and offers are consumed, which may expose an imbalance in OF I could use to exchange.
Has anybody here read the book The art of war by Sun Tzu?
Quote:
so that it is said that if you know your enemies and understand yourself, you can win a hundred battles without a single loss.
In the event that you simply understand yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, then you'll always endanger yourself.
It has made me think about attempt to think from the mindset of an institutional, and how if I needed to place a massive spot trade from a customer how I'd do it. Now if you think about the role of an institutional trader the more affordable he can produce the transaction the better. With this in mind one of things I'd be doing is looking at the current Liquidity of the market. Now if this was at the session I may either think about breaking up the trade into chunks and possibly losing a good average price that the customer would like or maybe postponing the trade. They're also composed by people although I understand that Algos can do this for me.
So when we attempt to decrease the cost of doing business we will need to examine the depth of the market as the further slippage we experience the longer it will cost. If the trade is just a swap then I don't think that Market Breadth will be important to us. One is to try out an Interest in my actions by limiting impact, since this may push price against me raising prices as speculators may find me as Informed.
Currently whilst trying to locate a person to take another facet of my order I see that for example you will find Limit orders used as an Options obstruction that's scheduled to expire soon, or possibly a level that's being defended by some big speculators. In Forex we have three kinds of orders. We've got Market orders Marketable limit orders aka Stop orders and Limit orders. From those 3 kinds the Limit orders supply liquidity. Therefore any informed trader seeking to exchange a huge volume will be looking for the Limit orders to demand liquidity from.
As most of us here on forum don't have a limit order book(If we did we would not be here), then it will become apparent as Darkstar claims there is away to view it on the chart. Going that Cease orders have a tendency to accelerate trends and Limit orders have a tendency to reflect trends then as recreational traders will be needing to appear historically for areas where price has made a sharp U turns. I'm not 100% sure on this but one of these limit orders were looking for hasn't been filled and there's enough of these liquidity offered to reverse price around again.
To summarize a little from all of my ramblings it seems plausible that if we understand the constraints of these guys handling the market moving orders then we may be able to locate the suitable loions of where transactions such as that may be carried out. Yet another thought on this is that a participant slinging bucks must find a way to depart but also to put in his place. Institutional traders need to place orders whereas all of us traders only have to if we want to!
Have a great one!
66950I like your thinking redbaron. There was a time not long ago when I first was looking to trading order flow I, just like you, thought about level two. However, I now think that it's not significant, and somewhat useless on the OTC area FX market. I was thinking it may be used somewhat like how stock traders allegedly trade it on an exchange. Then I believed , my best bet would be with the two major place fx wholesale ECN's... EBS or Reuters determined by the pairs you knowingly trade. I think this would help considerably. I may be wrong of course. The only way would be using HFT algo's since these guys would be all over it, When there was anyway to see the DOM and locate some imbalances. And again, this price's ALOT of cash to get the top feeds from these ECN's... crazy amounts. . The EBS feed is not you need to pay additional.
Another things you were talking about I'm interested in as well, specifically with obstacles... You're saying that they were safeguarded by limit orders, but I think (particularly from what DS originally presented with the stop hunt from the stating the obvious... thread, they were actively defending the attack with market orders.
I think not only can they locate liquidity in limit orders, but also the ceases to both buy/sell and also to liquidate.
I do not believe you must be staring in the DOM to do this. For instance, the CB amounts can be seen by you and you also get reports on them, but this is no guarantee for the future, it all depends on what is currently going on in the market, things will vary. They're in to stabilize their own currencies and diversify reserves. It's also about what will lead them get in or to escape and positioning of all the players. . Anticipating changes in central bank policy and rates, world events like what is happening in the middle east right now, etc.. Why do you believe we're in a range here and not busting out just yet?
EDIT: Perhaps when the market goes for a big breakout of a kind watching the DOM could help maybe? I doubt it, but possible, I really don't know... some people today claim so, but it's not gonna be with Dukascopy or MB Trading or any retail MM/ECN broker like that...
66950Just a slight correction of your definitions: marketable limit orders are not stop orders; they're limit orders in a marketable price (e.g. a bid in the best offer price or greater ) and therefore not a different type of order from a usual limit, whereas a halt is a held market order, i.e. held from implementation until the market reaches or trades in the designated price.
Or the trader can use limit orders to be filled by means of a pool of market orders.
66950Careful. . .When rumors of this US increasing interest rates begin to look and the fed is completed digging on their debt hole, then you might have a shot. The metals are currently going to brutalize a lot of people very quickly when the US retrieval germinates and begins to break the soil.
The article you mention mentions the Hunt bros, a perfect model for orderflow and market dynamics. The Hunt brothers cornered the market in the 1980's. They bought bought bought but would not sell. The silver market went . Cornering a market does not have to be accomplished by one individual or a few individuals as it's thought of in the feeling of a market egy. A market which has an flow does the exact same thing but en masse, therefore no individual or group is inspected but you get the exact same impact in the market. Right now there is basically a corner in the metals. Everybody is holding their pie and buying like there will not be a tomorrow, pardon the pun. The problem is going to come when all of these investors try to realize their gains. Not everyone will have the ability to market large. There will be a lucky group that can sell to the previous part of buyers at inflated prices, but when the market realizes that there aren't any more Arnold Schwarzenegger bids to them out, there will be panic and the metallic bubble will burst in Hindenburg style. It's merely a matter of time. The USA, IMHO will recover. I think we are still about 1.5-2 decades away from indications of strong progress. It'll be the rumors which indicate the end however. Those who can time the market right will have the ability to take advantage of the largest market inefficiencies in years. I think gold will reach between 16-1700 as it stinks, 1500 is obvious. Okay I will shut up now.
Jim
66950One more thing concerning the Hunt brothers..Mark Andrew Ritchie's book, God In The Pits (chicago futures pits), provides a first hand account of the Hunt family silver corner since he stood shoulder to shoulder together. I suggest this book. His brother Joe and him owned and operated Chicago Research and Trading until it was sold by them for gt;200 million at the late 80s/early 90s. Really cool men.
66950My motive is that the institutions can't implement $5.6 billion just out of the blue, due to liquidity constraints.
It will need to be implemented in chunks. . .look back on your charts...
I am thus anticipate playing a move down to 1.6250/55 and then anticipate large real money flows come in because this order flow is processed, such as has been happening recently. Then between the stops and bandwidth vacuum generated we will test the session high if they do come together?
Is this believing logical?
EDIT: That is of course, assuming they still have GBP to innovate. That is going to be enough to show me that it's a done deal, if it dips much below this level.
66950Don't post much, but throwing in my two cents. I'd like other people to weigh in.
Looking at the EUR/USD it moved up huge on Trichet stating they can raise bank rates when next month. This is not fact it's basically speculation. I see this as a market inefficiency, since everybody over responded to a rumor so that I would think the orderflow are a brief down to 1.385 where calculating is.
What do you guys think?
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