Yes and no bro. Traders/speculators might make up 80% of tick transaction volume we only make up 3 to 5% of market volume. The reason the markets needs us is to add liquidity. Remember what happens when liquidity drys up bro. What we do has absolutely no bearing on the price. Never has never will never think otherwise.
This is an example of the many reasons I do not guess at the psychology of market participants based on charts. I don’t know why sellers sold or buyers bought. Were they scared? Greedy? Just covering hedges because exposure in other areas changed? Was a particular move a cascade of stops? Did a major player move the market with a big entrance or exit? Was it the traders? Was it the market makers? Was it a government? Was it Toyota? I don’t know, I don’t guess, I certainly don’t need the stress of trying to divine the information. And even if I have got the who and why pegged I don’t get paid for knowing. I just need to take entries and exits with a high probability of long term positive expectancy.
Donchian called it decades ago: “[I]at the end of the day, your main goal should be to make money, not to get an A in How to Read a Balance Sheet.[/I]” I would add “[I]not to get an A in How to Read Who and What Psychology is Behind That Candle.[/I]”
But what do I know? I am just an arbitrager on acid.
-Adrian
what is the difference between tick transaction volume and market volume? Oh i know what retail traders do has no bearing on the price but i imagine when people like citibank trade and buy billions of dollars that affects price.
A tick transaction, a transaction between a buyer and seller that results in the movement of an instruments price by at least 1 tick. Market volume, the dollar amount of that transaction. You and I only get to see tick transaction volume (how clever of marketers to fool us in to believing that it represent volume). And even then the transaction volume is only as good as your broker and their liquidity provider’s feed.
Here’s a little exercise. Download protrader 3. Their data comes from LMax. Now compare their volume feed to your broker. Also they have a reasonable depth of market graph. That makes interesting viewing, you get to see market volume. But again its only a small part of the picture.
But I’m with old mate AoA. I don’t know who these buyers and sellers are. Why they are buying, why are they selling. It’s all way to much for my simple brain to understand. I know how to denature protein in milk to give yogurt a creamier and more solid structure. And I also know that these transactions leave evidence of repeated human behavior. And that’s what you and I can profit from. Knowing that the people who make the price move work business hours is one way of exploiting human behavior.
Right now, the OP is taking advantage of another human behavior - fear. The question is now, will he recognize when fear starts to dissipate. Lets hope so because he’s made some bold profits
I only say this low because if it goes to parity it will overshoot. An all I’m looking at is a reverse of rates from 10 years ago. USD used to be worth .60 of a dollar to each euro. It is not a stretch to see a Euro be worth .6 of a Dollar.
Now when this will happen or IF it will happen…
“When” is just looking at the rate of decline. If the eur/usd declines like this we will see .6 in 4-5 months.
This takes into account rallies as you just project the previous decline downward.
This is not WHAT WILL happen its a projection and then you change that depending on what you think will happen based on news.
So robobank saying parity at the end of the year, they were just adding in the worst case for parity, a MAJOR up correction before parity.
I’m still shorting the eur smashing until before the fed announcement. Resume trade south afterwards.
In the money +800USD on .9 standard lots.
So silly that if Fed drops “patient”, 1 word! from the news release, we will hit close to parity next week.
NZD/USD .9 Standard lots sell, out of the money -300 usd. Sold right after the press release at the peak but then it went up a leg, down a leg friday. Tight stop on this one because I don’t want to take a larger than -800 usd hit. The reason my risk is so high here is because look at the potential for skyfall once nzd breaks…literally 15000USD profit on a standard lot (considering increasing position size during drop) if it breaks that Jan low of .715
I know front riding the break is stupid, thought it would happen last week but did not, got lucky with fridays drop down, I will pull out of this position before FED announcement (even if I have to take a hit) and wait for the break low on NZD later this week or a possible up correction will hold my entry.
Got out with some losses before the FOMC. Got in long made a little.
Now I’m short at 1.0875
Good trading everyone!
What does everyone think about shorting here?
Take profit Eur/Usd short now at 1.075 from like 1.092
Long position USD/JPY target 121.00 from 120.00
Well that worked out!!!
Still holding a new eur/usd short and usd/jpy long .
Anyone have any other positions?
EUR/USD JUST BROKE SHORT
You are doing very well! Luck or experience?
TC
Well I really learn a lot each week but I have a year experience, not a lot really. Maybe luck but I spend a lot of time reading all news and watching all the charts.
Closed all trade except a very small short eur/usd position
Seems to be ranging at 1.065 can see any short term moves and nothing jumping out so I’m done for tonight.
Overall still bear on eur/usd
Have a good one!
Just closed out my positions too. Made a mistake this week of staying in before the news. Put me into a bit of a negative position but price action clearly showed selling into the upmove. Happy to be out with a small profit.
Next time. Take profits before news. Then sell when market turned. Difference between a few pips and a lot of pips despite bias being correct. Big lesson learnt