trader2000 wrote: Tue Jun 25, 2024 5:43 am
n panel1 what is pfo?mean and how to use it ?
other point if adr value and % is low it mean proper time to open the deal buy if adr value blue and percentage is low blue color ?am i right please correct me and thanks
Hello trader2000,
About PFO according ChatGPT
In the context of Forex (foreign exchange trading), "PFO" typically refers to "Payment for Order Flow." This is a common practice where brokers receive compensation from market makers or liquidity providers for directing orders to them. Here's a detailed explanation:
### Payment for Order Flow (PFO) in Forex
#### Definition
Payment for Order Flow (PFO) is a practice where brokers route their clients' orders to specific market makers, liquidity providers, or other entities in exchange for a fee or compensation. This arrangement can influence how and where a client's order is executed.
#### How It Works
1. **Client Places Order**: A trader places an order with their broker to buy or sell a currency pair.
2. **Order Routing**: Instead of executing the order immediately on the interbank market or through the best available price, the broker routes the order to a preferred market maker or liquidity provider.
3. **Compensation**: The broker receives a fee or some form of compensation from the market maker or liquidity provider for directing the order to them.
4. **Execution**: The market maker or liquidity provider executes the order, and the broker fulfills the client's request.
#### Pros and Cons
**Pros:**
- **Reduced Trading Costs**: Brokers may offer lower trading commissions or spreads to clients because they receive compensation from PFO.
- **Liquidity**: Market makers and liquidity providers can offer deep liquidity, ensuring that trades are executed quickly and efficiently.
**Cons:**
- **Conflict of Interest**: There could be a potential conflict of interest if the broker routes orders based on compensation rather than achieving the best execution price for the client.
- **Transparency**: Clients might not be aware of the practice, leading to concerns about transparency and fairness in order execution.
#### Regulation and Disclosure
In many jurisdictions, brokers are required to disclose if they engage in Payment for Order Flow practices. Regulatory bodies may have specific rules to ensure that such practices do not negatively impact the fairness and transparency of the trading environment.
#### PFO vs. Direct Market Access
PFO contrasts with Direct Market Access (DMA), where orders are executed directly on the interbank market or other execution venues without any routing to preferred market makers. DMA generally aims to provide better price transparency and execution quality but might come with higher costs for traders.
### Conclusion
Payment for Order Flow is a significant aspect of the Forex trading landscape, influencing how orders are routed and executed. While it can reduce costs for traders, it also raises important questions about execution quality and transparency. Traders should be aware of their broker's order execution policies and consider how these might impact their trading outcomes.
About ADR according ChatGPT
In the context of Forex trading, "ADR" stands for "Average Daily Range." The Average Daily Range is a technical analysis indicator that measures the average movement of a currency pair within a single trading day over a specified period. Here’s a detailed explanation:
### Average Daily Range (ADR) in Forex
#### Definition
The Average Daily Range (ADR) calculates the average range between the highest and lowest prices of a currency pair over a given number of days. It helps traders understand the typical volatility and price movement of a currency pair within a single trading day.
#### Calculation
To calculate the ADR, follow these steps:
1. **Determine the Daily Range**: For each day in the specified period, subtract the lowest price of the day (low) from the highest price of the day (high).
\[
\text{Daily Range} = \text{High} - \text{Low}
\]
2. **Sum the Daily Ranges**: Add the daily ranges for the specified number of days.
3. **Divide by the Number of Days**: Divide the sum of the daily ranges by the number of days to find the average.
\[
\text{ADR} = \frac{\sum (\text{Daily Range})}{\text{Number of Days}}
\]
#### Example
If you want to calculate the 14-day ADR for a currency pair, you would:
1. Calculate the range (High - Low) for each of the last 14 days.
2. Sum these daily ranges.
3. Divide the total by 14 to get the average daily range.
#### Usage in Trading
The ADR is useful for traders in several ways:
1. **Volatility Measurement**: ADR provides a measure of volatility, helping traders gauge how much a currency pair typically moves in a day.
2. **Setting Targets and Stops**: Traders can use the ADR to set realistic profit targets and stop-loss levels based on expected daily movement.
3. **Identifying Trading Opportunities**: If the price has already moved close to the ADR early in the day, it may signal that the currency pair has reached its typical movement range, potentially indicating a slowing momentum.
4. **Risk Management**: By understanding the average daily movement, traders can better manage their risk and position sizes.
#### Example in Practice
Suppose the ADR for the EUR/USD pair is 70 pips. If the EUR/USD has already moved 65 pips by mid-day, a trader might conclude that the pair is unlikely to move much further, and they might adjust their trading strategy accordingly. Conversely, if it’s early in the day and the pair has only moved 20 pips, there could be more room for movement in either direction.
### Conclusion
The Average Daily Range is a valuable tool for Forex traders, providing insight into daily volatility and helping in setting realistic trading parameters. By understanding the typical range a currency pair moves within a day, traders can make more informed decisions regarding entry and exit points, as well as risk management.
All my entry is based on ADR value, not in PFO
Is all on the post #1 (
xard-simple-trend-following-trading-sys ... 16709.html) are a guide for all my explanation, and i hope it helps you.
PERSONAL NOTE: Forex-Station.com Moderators, i didn´t find any detailed explanation about this two points in this community. Feel free if necessary my post to guide this request.
XXXX: ADR in Xard's indicators is calculated by this piece of code.
Code: Select all
string OPEN=""; OpenToday=iOpen(SymPair,1440,0); OPEN=(DoubleToStr(OpenToday,DecNos));
string PIPS=""; CLOSE=iClose(SymPair,1440,0); PIPS=DoubleToStr((CLOSE-OpenToday)/Point/pipsize,0);
ADR1=0; ADR5=0; ADR10=0; ADR20=0; ADRavg=0; int a,b,c; int ypos=0;
ADR1=(iHigh(NULL,TimeFrame,1)-iLow(NULL,TimeFrame,1));
for(a=1;a<= 5;a++) ADR5= ADR5+(iHigh(NULL,TimeFrame,a)-iLow(NULL,TimeFrame,a));
for(b=1;b<=10;b++) ADR10=ADR10+(iHigh(NULL,TimeFrame,b)-iLow(NULL,TimeFrame,b));
for(c=1;c<=20;c++) ADR20=ADR20+(iHigh(NULL,TimeFrame,c)-iLow(NULL,TimeFrame,c));
ADR5=ADR5/5; ADR10=ADR10/10; ADR20=ADR20/20; ADRavg=(((ADR1+ADR5+ADR10+ADR20)/4))/Point/pipsize;
