imo a mispricing is an inefficiency in itself - if the market were efficient it couldn't be mispriced. Price discovery itself is an inefficiency [or, is inefficient] because both informed and uninformed order flow are used to discover price, which ...

Order Flow - Achieving the mindset

imo... there were substantial long positions accumulated on the way up to 1.42, most of which were not "unloaded" when the number was breached. I think they were looking for at least 1.4205-10. The Portugal news may have brought in some sellers, and ...

Order Flow - Achieving the mindset

I've been looking into this today, and though there are contradicting quotes from various sources, it appears Pru had already hedged its currency risk (using "unspecified derivatives") by the time they made the deal announcement. Also the cash ...

Order Flow - Achieving the mindset

FWIW, I don't think the rise from 1.6200 on cable and from 1.4150 on euro was about stops. They may have helped, but if the market was only above that figure because of a stop hunt then the PA would have looked a lot different. imho

Order Flow - Achieving the mindset

Yeah when it was happening I was thinking about how it was just like the flash crash... grabbed a few hundred pips this evening.

Order Flow - Achieving the mindset

Back on topic... massive stop loss selling on the yen, and if anyone has access to a DOM of sorts you could see how illiquid it was, and lots of gaps in between sparse liquidity causing it to jump around crazily even after the fall.

Order Flow - Achieving the mindset

Read the whole thing, you won't get as much from it by just reading the end.

Order Flow - Achieving the mindset

Just a slight correction of your definitions: marketable limit orders are not stop orders; they are limit orders at a marketable price (e.g. a bid at the best offer price or higher) and therefore not a different type of order from a normal limit, ...

Order Flow - Achieving the mindset

So your girlfriend understands it?

Order Flow - Achieving the mindset

Guys, if you want to know how fx dealers work, rather than just guessing read Osler and Lyons, and other papers that deal with how fx dealers manage inventory (there are a good number of them if you search). T&E is good generically but not enough if ...

Order Flow - Achieving the mindset

How are you defining informed/uninformed traders?

Order Flow - Achieving the mindset

And yet the markets move even when there's no news... how is a given "move" related to the average perceived value of a currency? Remember that trade (order flow) also occurs for reasons unrelated to fundamental value.

Order Flow - Achieving the mindset

Stop orders are "held" market orders, so they do consume liquidity and don't show up on the order book.

Order Flow - Achieving the mindset

Hi Cindy, It would appear to me to be like so: there are no such things as "pairs". You are simply exchanging one currency for another. So I buy dollars from you and pay for it in pounds. I then buy more dollars from you and pay you in euros. There ...

Question about currency supplies

No. The market buy would be matched with the best priced offers, and the market sell would be matched with the best priced bids. Doesn't matter if they come in at the same time. A market order doesn't have a price associated with it, so what price ...

Couple Questions On How Orders Are Processed

Jim you've been watching futures too much! Retail spot fx doesn't show the last transacted price, if you see a single price then it's either the current ask, bid, or midpoint.

Order Flow - Achieving the mindset

Agreed - I did something similar though not quite to that extent (will do though). Blocking out all the "noise" and just sitting with a blank sheet of paper can be very educational.

Order Flow - Finding cluster of stops on chart

Nice, that explains it. Thanks.

Order Flow - Finding cluster of stops on chart

A function of orders and time? The further way a given price is from the market, the more time for orders to be added there. Close to the market that potential is smaller, though some of it has turned into actual orders placed.

Order Flow - Finding cluster of stops on chart

The implication is that it takes a certain amount of buying power to move the market in a given direction, but less to move it in the opposite direction after the fact. Exiting the position would consume the same amount of liquidity in the opposite ...

Order Flow - Finding cluster of stops on chart