Market Observations:

#1
MARKET OBSERVATIONS:

A random collection of observations, anyone is welcome to join in.



- Chart structure is the most important indicator and provides the best information on market direction, upcoming speed bumps, and possible turns.

- The market can look random but it's not, it just looks that way because there are no hard and fast rules - only sentiment.

- Often the chart doesn't move the way you think it should. Different traders have different objectives. Some are working for clients and their only goal is to buy or sell a certain amount while trying to get a better average price than the 'end of day' price.

- Big traders have a tremendous advantage, they can move the market and as a reward will often get follow through.

- Traders can make money trading major reversals but they don't tend to be newbies, and yet that's the most popular strategy taken up by newbies.

- Most retail traders should stick to dip buying (or rally selling) in a trend.

- Higher high > higher low. Impulse leg > pull-back of around 40 – 60% > entry on reversal to continue with trend. (Lower low > lower high for down trend).

- Avoid buying INTO recognised resistance or selling INTO recognised support. Sure, the level may break but it might not. Wait for obvious battle lines to be cleared before looking for an entry (unless you really are big enough to move the market).

- For the same reason as above be wary of flat tops and bottoms in recent price action, price repeatedly being rejected at the same level says someone has a big order to fill and keeps reloading at that level.

- Expect today to be the same as yesterday - until it isn't. Look at any daily chart and you'll see most days are continuation days not reversal days.

- Assume that whoever controls the pivot controls the day - thus far.


(can you tell it's a 'slow as f*** day'?)

8.PNG


Re: Market Observations:

#2
It is difficult to agree with some of the conclusions outlined above.
All that you see on the currency charts is the change in the market maker’s balance, because when there is a rush or large players buy up the entire market in one minute and add more, then there are no counterparties left and the market maker is forced to execute transactions at his own expense.
In this case, he looks at his balance of the currency portfolio and so that there is no imbalance in percentage terms for different currencies, he shifts the price so that his balance is aligned in the proportion he needs.
There is no place for sentimentality, there is only a calculation according to the market maker's balance

Therefore, each price movement on currency charts is a change in the balance of the market maker and its actions to equalize it.

Re: Market Observations:

#3
Intrest 1 wrote:
Mon May 16, 2022 11:51 pm
It is difficult to agree with some of the conclusions outlined above.
All that you see on the currency charts is the change in the market maker’s balance, because when there is a rush or large players buy up the entire market in one minute and add more, then there are no counterparties left and the market maker is forced to execute transactions at his own expense.
In this case, he looks at his balance of the currency portfolio and so that there is no imbalance in percentage terms for different currencies, he shifts the price so that his balance is aligned in the proportion he needs.
There is no place for sentimentality, there is only a calculation according to the market maker's balance

Therefore, each price movement on currency charts is a change in the balance of the market maker and its actions to equalize it.
Don't care if you agree or not, it's my observations of over 10 years of trading.

Sentiment drives any market.

The market maker can only take an option (offer to clients) in the hope that's what buyers and sellers want, they are either ahead of the game and winning or behind the game and losing.

If the market maker sees the balance is shifting they just shut down their own market and they often do. 'This market is no longer borrowable', 'this market is no longer longable'.

Re: Market Observations:

#4
Ogee wrote:
Tue May 17, 2022 12:11 am
Don't care if you agree or not, it's my observations of over 10 years of trading.

Sentiment drives any market.

The market maker can only take an option (offer to clients) in the hope that's what buyers and sellers want, they are either ahead of the game and winning or behind the game and losing.

If the market maker sees the balance is shifting they just shut down their own market and they often do. 'This market is no longer borrowable', 'this market is no longer longable'.
What does "in debt" mean?
Currency is a commodity with absolute liquidity and it is impossible to close the market, otherwise money will cease to be money. This happened once in 1992 with the British pound, this has never happened again.
Imagine yourself as a market maker and a large lot of the euro appears, which was put up by the ECB and they intend to devalue their currency.
Where can you find contractors?
Nowhere. You will have to perform at your own expense.
Otherwise, you will cease to be a market maker at the same second.
You will widen the spread and shift the price in order to stay afloat yourself and not be left without pants.

P.S.
I outlined what concerns the foreign exchange market.
Markets are different and each market has its own nuances.
If you want to discuss derivatives markets and other exotics, then this should be explained right away

Re: Market Observations:

#5
"- Assume that whoever controls the pivot controls the day - thus far.


(can you tell it's a 'slow as f*** day'?)"

This point is not clear.
What does it mean to "control the pivot"?
Pivot is about the same as today's open day, which means that no real orders have appeared and the market maker flattens his orders without execution. He has nowhere to move the market and there is no need, because there is no one on the market except the market maker himself.
When players with large lots appear,
then the market maker will move the market based on the state of its balance


Re: Market Observations:

#6
Intrest 1 wrote:
Tue May 17, 2022 12:41 am
What does "in debt" mean?
Currency is a commodity with absolute liquidity and it is impossible to close the market, otherwise money will cease to be money. This happened once in 1992 with the British pound, this has never happened again.
Imagine yourself as a market maker and a large lot of the euro appears, which was put up by the ECB and they intend to devalue their currency.
Where can you find contractors?
Nowhere. You will have to perform at your own expense.
Otherwise, you will cease to be a market maker at the same second.
You will widen the spread and shift the price in order to stay afloat yourself and not be left without pants.
not sure what you're saying now, where does ''What does "in debt" mean?'' come from ??

The GBP devalued in 1992 so what? the GBP never ''ceased to be'', I happened to be holidaying in Bali at the time, it just meant my GBPs were worth 30% less than the day before, so what? Shit like that used to happen all the time in the 70s.

Anyone who puts in a buy or sell order is effectively a market maker but actually most of us are dealing through a larger money maker as in a broker. The broker makes a market, it pairs up client buy and sell orders in house and then for any excess just takes out a hedge in the underlying interbank market.

Very few traders are rich enough for a seat at that table so via a broker it is and brokers will shut it down by not taking on new orders whenever it needs to. Happens far less in currencies than stocks, crypto and indices but it will happen if needs be.

Re: Market Observations:

#7
Ogee wrote:
Tue May 17, 2022 12:11 am
Sentiment drives any market.
The market maker can only take an option (offer to clients) in the hope that's what buyers and sellers want, they are either ahead of the game and winning or behind the game and losing.
If the market maker sees the balance is shifting they just shut down their own market and they often do. 'This market is no longer borrowable', 'this market is no longer longable'.
"Sentiment"
"the market maker"

the use of the singular leads - I think - to a populist simplification.
Sentiment couldn't drive markets if there weren't as many (and more) "market makers" as there are perspectives on future price development.
Whatever problem you look at (Ukraine, Corona, politics, economics, trading), multiple differing (often contradicting) causes of different strength and importance will be at work at any given time. But you know that, of course.

Re: Market Observations:

#8
Intrest 1 wrote:
Tue May 17, 2022 1:02 am
"- Assume that whoever controls the pivot controls the day - thus far.


(can you tell it's a 'slow as f*** day'?)"

This point is not clear.
What does it mean to "control the pivot"?
Pivot is about the same as today's open day, which means that no real orders have appeared and the market maker flattens his orders without execution. He has nowhere to move the market and there is no need, because there is no one on the market except the market maker himself.
When players with large lots appear,
then the market maker will move the market based on the state of its balance
On a fast day the Renko chart would have printed 5 - 10 times more bricks.

Keeping price above or below the pivot indicates which side is in control.

Er, yes - if there are no big buyers or sellers then the market won't move much.
pp1.PNG

Re: Market Observations:

#9
Ogee wrote:
Tue May 17, 2022 1:03 am
not sure what you're saying now, where does ''What does "in debt" mean?'' come from ??

The GBP devalued in 1992 so what? the GBP never ''ceased to be'', I happened to be holidaying in Bali at the time, it just meant my GBPs were worth 30% less than the day before, so what? Shit like that used to happen all the time in the 70s.

Anyone who puts in a buy or sell order is effectively a market maker but actually most of us are dealing through a larger money maker as in a broker. The broker makes a market, it pairs up client buy and sell orders in house and then for any excess just takes out a hedge in the underlying interbank market.

Very few traders are rich enough for a seat at that table so via a broker it is and brokers will shut it down by not taking on new orders whenever it needs to. Happens far less in currencies than stocks, crypto and indices but it will happen if needs be.
The broker does not create the market, the broker is only an intermediary.
Everything that they write and say that the broker there collects something in one big lot is nonsense and fiction, because everyone needs to close at their own price and at different times. It is impossible to display such a lot on the interbank market. Dealers invent these stories to avoid taxes, because deals with leverage are not deals.
, but betting on volatility, which is a game on the stock exchange and not a trade.
Taxes on trade and gambling are different, therefore, they create all these brokerage tales of combining small amounts into one lot

Re: Market Observations:

#10
Think with your head how a broker will collect small amounts with leverage and withdraw a large lot on the interbank market without leverage?
There is no leverage on the interbank market, because there is real trading without leverage, and not betting on volatility with leverage.
Where will the broker take the money to pay out the players, because the income with and without leverage is completely different.
The broker in this case must pay the players out of his own pocket.
If you have at least a little intelligence, then you will understand the essence of brokers deceiving their clients with fairy tales that they bring something and somewhere to the interbank market when deals with leverage


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