Subscribe this! will read later!
Well, it is a good topic really :8:
Minotaur is going well I see.
Ok, let’s consider about bids. MM makes bid in 100 mln $ in EBS, Reuters and other systems. But when you want to fill this order liquidity is running from you =) It means that there are only 7 mln $ not 100. You go below and spread becomes wider and wider. Eating bids which are running from you, you touch stop triggers which also provide liquidity for going down. Pegged order lol.
This is foundation of patterns which could be formalised and backtested
Now think why HFT traders can’t beat machine in Forex? :8:
Hey guys, can someone explain to me what it means when someone says that the “dips are well bid”, I see this term used a lot but never understood it in the context of order flow or price action.
It means that when price drops, those “dips” ran into decent buying interest.
For example, we could say USD/JPY was well-bid on the dip to the 97.00 level, as it spiked up after hitting the bids there.
Dips well bid. Price always run into offer/bids. Its always seeking for liquidity and more fuel to attack the stops. When price dips on HFT, most weak seller,indicator players, technical traders are well trapped, and their stops eventually become the fuel to rally higer… Simply Manipulation
That’s a good summary, Jack. Maybe someone calls it manipulation, but that’s the way the market operate, traders looking to exploit other trader’s behavior. If you read the book “Reminiscenes of a Stock Operator” from 1923, you’ll see it’s as old as the markets. 
Just entered U/J at 99.00. Price break through 99, triggered stops ahead with a bit of profit taking from the longs, but well bid at 98.90. No sellers noted except probably some profit taking from previous long traders. Sentiment positive, with a rumored demand from European funds.
Looks like a good to go, targetting 99.5 or 99.7…
current price 99.3. SL at +10 now. So whatever happens im still 10 pips up.
Friday night…should have close the damn trade. But now im just letting it flow…
AUD/USD
The RBA meeting earlier did not surprise anyone. Markets were expecting that they will keep their dovish bias and that they will state not to hestitate to cut rates in the future if needed. But traders reacted immediately with AUD/USD selling and pushed it to the support level at 9150. Now we have a liquidity gap from the pre-RBA price level to 9180. Watch how price will behave - will the rallies be small and will there be decent selling interest within the gap (identified by sharp rejections) or will buying pick up and sell-side liquidity be rather poor within the gap?
Sentiment is negative from a broad perspective, but there is potential for some short squeeze. I eye 9250 and 9280 as key resistance and 9150 & 9110 as key support.
Hi Dali,
Thank you very much for sharing this approach to forex. This is very eye-opening for newbie like me.
In one of your earlier tutorials you mentioned the IFR market news which I have access to since I am with Oanda.
There are tons of news everyday. Can you share with us which ones are more relevant to order flow?
For example there is 1 today posted at 1110GMT:
"[LONDON, July 2, 11.10GMT] USD/JPY broke yesterdays high and today’s Asian range peak at 99.87 in early London, but didnt get past 99.91 before slipping back in to the 99.60-70’s. 99.93 is 61.8% Fibo retracement of the move down from 103.74 to 93.75 between May 22 and June 13 and remains solid resistance. There remain plenty of 100.00 RKO triggers (related to JPY puts strikes in the 95.00 area), but defence will be negligible, given that some do note expire until late July/early August. More of these triggers reside 100.50. For now it seems range traders are happy to sell ahead of 100.00, but prefer to be long on any dips and await an eventual break higher. Stop buy orders noted 100.10-15. Large bids 99.50 and 99.20-99.00. Good size vanilla option expires today and Thursday at 99.50 and 100.00 (More) should help to contain this range in to Fri’s NFP, especially as US holiday looms to limit overall flow. Implied vols lowest in several weeks to highlight the lacklustre tone. JPY calls well bid on risk reversals and with vols so low, buying JPY puts is a great way to position for further spot gains right now."
Is this one of the more relevant news?
Thanks in advance
Hi KC,
I would focus on the articles that have the BUZZ tag in front of the headline. Just type in this word in the search function and it should filter them out. Those BUZZ articles focus on order and flow info mixed with some technical analysis and brief fundamental/sentiment analysis.
Here are 2 more that I can recommend:
Order Flow Trading > News > News Feed (Free)
https://mninews.marketnews.com/product-info/mni-foreign-exchange-bullet-points (Paid)
Not sure about this latest EUR/USD downmove. We have the ECB meeting tomorrow and the US traders will likely take some profits today as tomorrow is a holiday in the States. So we might see some short squeeze as we head into the NY session.
Demand at 1.2950, while supply at 1.30 and large from 1.3070-1.31. I think if the squeeze happens, stops above 1.30 to 1.3020 will be a likely target, while those above 1.3050 might be a bit harder to get.
Well, it seems Portugal will give the EZ some more headache. 
JPY rising again as risk aversion grows…I find it interesting how many traders/investors still view it as safe haven. A dip into 99.50 might provide a good buy opportunity, once those sub-100 stops are cleared.
OANDA have a news feed (free) and I have seen such information there - long before it meant anything to me! I haven’t checked back yet as I am have only just started reading this excellent thread. It might be worth a look/comment by an expert rather than from just a newboy like me?
Trade canny, Hamish.
[B][U]Market Squeezes[/U][/B]
You have probably already heard the term “squeeze” in financial markets. It describes a market where traders are caught overly positioned to one side, which leaves them vulnerable to sentiment-changing events or large players taking advantage of their vulnerability by engineering a “technical” squeeze.
A squeeze can happen:
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as a result of an event that has changed short-term sentiment. A very recent example is the USD/JPY squeeze we saw the last night in the Asian trading session. Traders expected that the Japanese Prime Minister Abe and his party will win the majority in the Upper House election - which they did. However, this was already priced in as many traders bought the USD/JPY on Friday on those expectations. This resulted in a squeeze of the traders who were positioned long. Those who where long, took profits, and some predatory traders joined the selling to profit from the move. Once the stops below 100 started to getting triggered, downside momentum picked up until we ran into good-sized bids around 99.60.
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due to technical reasons. Large players can engineer a short squeeze without an event to gain more favorable conditions for themselves. This is most commonly seen as a stop hunt, as the stops from those short-term traders are usually triggered in this process. You have to keep in mind that it is the job of financial journalist to always find a reason why a certain price move has happened. So if you notice that there is really no reason why a certain pair moved, but you are aware of the fact that positioning is either overly long or short, you can imply that this was simply a stop hunt.
How to take advantage of a market squeeze:
[B]1)[/B] If there is no reason for a certain price move and you are sure it was only stop loss-driven, you can fade the move and trade in the direction of the trend/sentiment. You could of course join the squeeze and try to hunt the stops, but you need to be quick.
[B]2)[/B] The squeezes that happen due to an event that has changed short-term sentiment or even medium-term/long-term sentiment endure longer and you can take advantage of those trapped traders that are caught on the wrong side by joining the squeeze. For example: Let’s say the RBA (Reserve Bank of Australia) does not cut interest rates in August. The majority of traders expected they would do so and positioning is extremely short. What will happen? We will see a larger short squeeze driven by position covering and stop loss triggering.
[B][U]Tools for Market Positioning:[/U][/B]
Retail positioning is of course not significant for such a large market, but you can use it to get an idea what some of the retail traders are doing. Most of them use similar strategies and a large majority of them is positioned wrong, so you want to notice when market positions is overly long or overly short.
Foreign Exchange Positions | Forex Open Position Ratios | OANDA fxTrade
COT Charts (based on the CFTC IMM report released every Friday):
Commitments Of Traders Reports - COT Report, COT Charts, COT Analysis and COT Data - COTbase.com
Sites where you can get occasionally info about overall FX interbank positioning (from what I’ve figured out they derive it from various bank reports etc.):
FXWW Market Commentary Blog - FXWW Market Commentary
Order Flow Trading > News > News Feed
Happy trading
- Dali
Hi Dali
Here is an example of me taking advantage of other traders in a squeeze on the USD/JPY currency. I shorted after the ISM number came out which allowed me to enter a short position in line with sentiment.
Take Profit and stop loss highlighted on the chart
Thank you for such a great thread. I wish I would have read this earlier. Spent a couple of days watching video’s on the subject. this thread much easier to understand and way more information.
Again Thanks, Best Wishes and Continued Success
Gp
That what i call it a SHAKE OUT or GOT YAA bar in VSA rules
And Finally about 6 hours later Profit taken for 37 pips
Note on the chart a squeeze of the players again providing another opportunity for those that were prepared.