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  • #81
  • Feb 24, 2018 12:29am Feb 24, 2018 12:29am
Quoting copi88
{quote} Agree it is critical to understand the motivations behind a move. This is the problem with the vast majority of retail traders they do not know. All they see is chart patterns and do not know how to calculate value. In addition most do not know how to interpret news / fundamental events as they do not understand the bond markets and how they bonds react to news events. Institutions have complicated AI neural network models that calculate value for them which their algos trade off. In the retail space best we can do is build simple models...
I can remember when I used to care about why price does this or that. Then I realized that it does not matter. An engulfing bar will still be an engulfing bar regardless of what made price make a V reversal. I would still use the same decision making process. I used to look at the news, then I realized that the big fish knew the news before we did, regardless of what they say, and it will be reflected on the chart. I used to back at the turn of the century tweak a million different indicators. Then I realized that indicators are just price bars depicted in a different form. I began to throw out or disregard any thing on my chart that I did not actually use in my decision making process. I ended up with price, and range. That's it.

So I have no problem letting those complex algos help the big fish make a trade, in the end price will go a certain distance up or down, and that is all we really need to know to enter and exit trades.
If you are good at something, never do it for free--Joker
  • #82
  • Feb 24, 2018 12:56am Feb 24, 2018 12:56am
Quoting jmn5611
{quote} I can remember when I used to care about why price does this or that. Then I realized that it does not matter. An engulfing bar will still be an engulfing bar regardless of what made price make a V reversal. I would still use the same decision making process. I used to look at the news, then I realized that the big fish knew the news before we did, regardless of what they say, and it will be reflected on the chart. I used to back at the turn of the century tweak a million different indicators. Then I realized that indicators are just price...
Price action / candle stick patterns are just a construct of time. Time is irrelevant to an institutional trader /algo . The only thing that matters is price and value.
For the traders who actually move the markets the last thing they do is look at a chart. We tried to develop an AI based on pattern analysis - it doesnt work.

Which pattern is more bullish?
Attached Image (click to enlarge)
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The pattern is the same price action just of a different timeframe.

The institutions dont know the news before we do. They do however have their own economic departments / research teams and have their own predictions to the news release. The numbers we see on FF are just the median score of the economists. Typically how institutions will trade a news release is to accumulate a position before the news release and then use the volume generated from the release to get off their position this is why many cases the news spikes just reverse themselves.

Happy that you are able to trade using just price action. Personally I have trouble buying / selling something that I dont know what the value of it is.
How do I know I will be able to get rid of it later for a profit?
Boxing clever since 76.
  • #83
  • Feb 24, 2018 1:11am Feb 24, 2018 1:11am
Quoting copi88
{quote} Price action / candle stick patterns are just a construct of time. Time is irrelevant to an institutional trader /algo . The only thing that matters is price and value. For the traders who actually move the markets the last thing they do is look at a chart. We tried to develop an AI based on pattern analysis - it doesnt work. Which pattern is more bullish? {image} The pattern is the same price action just of a different timeframe. The institutions dont know the news before we do. They do however have their own economic departments / research...
The answer is that neither of those patterns are bullish.

I think as far as value goes, the value is whatever two traders say it is at that given instant. Just my view. Many ways to skin a cat.
If you are good at something, never do it for free--Joker
  • #84
  • Feb 24, 2018 1:12am Feb 24, 2018 1:12am
Quoting LuKa12
{quote} you know this how? personally you know their order book, have mates feeding you order levels? or your just making hypothetical guesses?
Not quite sure what you are asking.

The blue line in the chart is the actual value of the EURUSD, the candlesticks are the current price. Wouldnt you buy as much of something as you can if you knew it was really cheap and you could resell it at a later date for a profit? But you would also do it passively, sitting on the order limit book quietly picking up any downticks in price. They dont want the rest of the market knowing their intentions. They dont want everyone else on their trade as then they will have to compete with them when they want to offload their stock at higher prices.

This is why price goes through these accumulation patterns . Institutions either wait for value to develop or manipulate price so they have value. When they do they will keep price as low as possible for as long as possible to get the necessary volumes on their books. This is why it can take days of ranging price action before there is a breakout.
They will create a nice looking downtrend, price making LLs, LHs , people thinking this is great price is trending down and it attracts the sellers whilst they are accumulating all those sell orders. This is why I did that post that a market going down is actually bullish and up bearish.

The other thing they will do is manipulate price during the low volume periods as this is cheaper to do. The instructions to the Asian desk will be to take price in the wrong direction so when they come to their desks during the European session when the volume kicks off they will have something really cheap to buy.
Boxing clever since 76.
  • #85
  • Feb 24, 2018 1:17am Feb 24, 2018 1:17am
Quoting copi88
{quote} Not quite sure what you are asking. The blue line in the chart is the actual value of the EURUSD, the candlesticks are the current price.
Who determines what the value of the pair is? What data does that blue line use?
If you are good at something, never do it for free--Joker
  • #86
  • Feb 24, 2018 1:18am Feb 24, 2018 1:18am
I use a Renko chart on oil for trading decisions. The non-time based charts reflect the nature of price (that it can only go up or down) better. There’s, broadly speaking, a “chart pattern” I exploit, but I can’t be bothered with wicks, engulfing candles, volumes anymore.
Cheers,
k
  • #87
  • Feb 24, 2018 1:24am Feb 24, 2018 1:24am
Quoting kprsa
I use a Renko chart on oil for trading decisions. The non-time based charts reflect the nature of price (that it can only go up or down) better. There’s, broadly speaking, a “chart pattern” I exploit, but I can’t be bothered with wicks, engulfing candles, volumes anymore. Cheers, k
And I still suspect I overcomplicate things.
Ed Seykota famously puts the chart to the other side of the room and “if it looks like it goes up”, he buys, and if “it looks like it goes down”, he sells.
I guess I haven’t reached that Yoda level just yet.
k
  • #88
  • Feb 24, 2018 1:28am Feb 24, 2018 1:28am
Quoting kprsa
I use a Renko chart on oil for trading decisions. The non-time based charts reflect the nature of price (that it can only go up or down) better. There’s, broadly speaking, a “chart pattern” I exploit, but I can’t be bothered with wicks, engulfing candles, volumes anymore. Cheers, k
I tried Renko charts and for me it took data away that I used. Funny. I do know some people that swear by them however.
If you are good at something, never do it for free--Joker
  • #89
  • Feb 24, 2018 1:42am Feb 24, 2018 1:42am
Quoting kprsa
I use a Renko chart on oil for trading decisions. The non-time based charts reflect the nature of price (that it can only go up or down) better. There’s, broadly speaking, a “chart pattern” I exploit, but I can’t be bothered with wicks, engulfing candles, volumes anymore. Cheers, k
You should have a look at OFA charts (Orderflow analytics) It takes away the time element. Bars are formed on a probe and rotational basis. eg must go up 8 ticks and then reverse 3 ticks for a bar to be formed.
ie a new bar can only be formed if buying or selling pressure come into the market.


Here is the 6E (euro chart from yesterday). A trade I took. As soon as that high volume upbar closes I open a sell position as I know there is selling pressure coming in. Cumulative delta also shows that there is heavy selling on the up move.

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See what value was doing

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Boxing clever since 76.
  • #90
  • Edited 2:17am Feb 24, 2018 1:42am | Edited 2:17am
Quoting jmn5611
{quote} I tried Renko charts and for me it took data away that I used. Funny. I do know some people that swear by them however.
Depends what the Renko is based on. Bars would be useless. They have to be based on ticks. The level of granularity makes a big difference. For your correlations; Renkos will screw with the movement when the ticks double-up on high volume. You're basically looking at the ticks within the ticks when referencing correlations(hidden in a Renko when it's compiling them). But, at certain times (the ones Kprsa is speaking of) they could essentially be used equally. Still, for the most part a Renko is about as useful as a MA and the downside is it becomes a lot harder to identify what's what in a move; using the Renkos does indeed take away the filter you use. Copi88 is basically referencing the dark-pool value which is all well and good for fading but disregards the transient nature of the market. It works well until the fundamental analysts need to take over the algos and abandon the theoretical price; otherwise they end up like LTCM. But if you have some fundamental know-how and a large fund then you'd need to fade the theoretical price to compensate for the liquidity issues we often face as retail traders.
"The fun is in the hunt. Not the kill."
  • #91
  • Feb 24, 2018 1:51am Feb 24, 2018 1:51am
Quoting jmn5611
{quote} Who determines what the value of the pair is? What data does that blue line use?
Institutions when developing their AI models use correlated markets to determine relative value.
Sometimes correlations are simple eg one market vs another sometimes they are complicated. That blue line is made up of 4 different markets. I just have one on that chart however they will have over 100 correlations with different weightings in their models. Just depends on the asset.

Here is the same chart with more correlations. I will turn different lines on / off depending on what is driving the markets.

Below is Euro with more correlated markets. You can see its starting to build long value in all but one of the correlations.

Attached Image (click to enlarge)
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Boxing clever since 76.
  • #92
  • Feb 24, 2018 1:51am Feb 24, 2018 1:51am
Quoting Redeflect
{quote} Depends what the Renko is based on. Bars would be useless. They have to be based on ticks. For your correlations; Renkos will screw with the movement when the ticks double-up on high volume. You're basically looking at the ticks within the ticks when referencing correlations(hidden in a Renko when it's compiling them). But, at certain times (the ones Kprsa is speaking of) they could essentially be used equally. Still, for the most part a Renko is about as useful as a MA.
They’re based off of bars on tradingview, which is what I look at. You’re right that they are essentially a smoother of price. I have just found them to be precise enough for my purposes when entering moves (trends) that are orders of magnitude larger than the Renko brick size.
Cheers,
k
  • #93
  • Feb 24, 2018 1:59am Feb 24, 2018 1:59am
Quoting copi88
{quote} Price action / candle stick patterns are just a construct of time. Time is irrelevant to an institutional trader /algo . The only thing that matters is price and value. For the traders who actually move the markets the last thing they do is look at a chart. We tried to develop an AI based on pattern analysis - it doesnt work. Which pattern is more bullish? {image} The pattern is the same price action just of a different timeframe. The institutions dont know the news before we do. They do however have their own economic departments / research...
picture in your post doesn't show pattern: it is just one bar broken in pieces...I disagree with you that market makers don't know content of news before news is released for public. they do know and they position themselves on time and in advance. they don't make decision in split second...every speech they have ahead...every data is known to them ahead: last year dailyfx(john kicklighter) confirmed that market knew day in advance for interview of Steven Mnuchin in which he said USA wants weak dollar...that news was withheld from public for one day then market timed when to respond to it....just publik and retail traders did not know....big spike....Tom Williams ( composite trader, VSA inventor, you know for him) also said that market know all news in advance...

in some of your post you have black curve that represent value. where that comes from? does market chase value? is there something like that for MT4?
NO MATTER THE SITUATION,NEVER LET YOUR EMOTIONS OVERPOWER YOUR INTELLIGENCE
  • #94
  • Feb 24, 2018 2:32am Feb 24, 2018 2:32am
i wonder why they do share,its like sharing your wife.
100% KENYAN.
  • #95
  • Feb 24, 2018 2:42am Feb 24, 2018 2:42am
Quoting copi88
{quote} Institutions when developing their AI models use correlated markets to determine relative value. Sometimes correlations are simple eg one market vs another sometimes they are complicated. That blue line is made up of 4 different markets. I just have one on that chart however they will have over 100 correlations with different weightings in their models. Just depends on the asset. Here is the same chart with more correlations. I will turn different lines on / off depending on what is driving the markets. Below is Euro with more correlated...
Thread is starting to get interesting. Good high level discussion from most everyone lately.

I take it that the correlations are of the intermarket variety. Currency vs. oil, bonds, DAX, etc. So this is not the same as a currency strength meter.
If you are good at something, never do it for free--Joker
  • #96
  • Edited 3:24am Feb 24, 2018 3:13am | Edited 3:24am
Quoting executivefx
i wonder why they do share,its like sharing your wife.
Why would anyone discuss their profession with another who is competing in the same job market? Because, at the end of the day, the ones that succeed earn it... and there's more than enough. You're making the mistake of thinking it's your wife.
"The fun is in the hunt. Not the kill."
  • #97
  • Feb 24, 2018 3:17am Feb 24, 2018 3:17am
Quoting jmn5611
{quote} Thread is starting to get interesting. Good high level discussion from most everyone lately. I take it that the correlations are of the intermarket variety. Currency vs. oil, bonds, DAX, etc. So this is not the same as a currency strength meter.
Yes intermarket. Currency strength meters are based on price and therefore will be lagging.
These value lines are the only non lagging indicators and are predictive.
Boxing clever since 76.
  • #98
  • Feb 24, 2018 3:37am Feb 24, 2018 3:37am
Quoting redeflect
{quote} why would anyone discuss their profession with another who is competing in the same job market? Because, at the end of the day, the ones that succeed earn it... And there's more than enough. You're making the mistake of thinking it's your wife.
lets cut the big talk share yours now and here.
100% KENYAN.
  • #99
  • Edited 4:10am Feb 24, 2018 3:49am | Edited 4:10am
Quoting Trader-Waldo
{quote} .I disagree with you that market makers don't know content of news before news is released for public. they do know and they position themselves on time and in advance.
That's called insider trading people go to jail for that. Just ask the fella that worked for the ABS in Australia and was passing info off to his mate making the trades. so its big doubt that happens widespread
  • #100
  • Feb 24, 2018 4:18am Feb 24, 2018 4:18am
Quoting executivefx
{quote} lets cut the big talk share yours now and here.
Be patient and know when you're wrong... Rules to live by.

And a good way to keep a good wife from fucking other men.
"The fun is in the hunt. Not the kill."
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