"Structure" of the market

Exactly right...without diverging opinions no market would not exist at all. Both opinions are based on speculation about the near or distant future...which is another issue of TIME

Trading for pure profitable gain is only a part of the market activity.

Trading goods and services between nations moves prices. Price behaviours can also be influenced by economic growth/decline, political interventions, world events and so on.

One of the points of median lines is time. Time is also affected by velocity. As a projection tool it is projecting the angle, time and price and that is what we all have to trade. Price is the process of keeping score. Median lines are NOT the same as trend lines. Not even close and because few use them it's obvious that few understand or know this fact. Reading a chart is the same as reading the expression of energy spent. Andrews was a professor of energy at MIT.
Having now spent a couple of years drawing these lines, I can say that it is rare that a wide range bar doesn't occur at a line. Whether it is zooming thru or away from a line (reverse or continuation) or zooming up or down to a line (exhaustion) is part of reading price and knowing that you have a well drawn set of lines. Price will react at these spots. It our job to figure out what the reaction will be. It's a tool, not the holy grail, just a tool, just the best tool I've found once I learned how to use it.

Forex is one of the best financial markets that offers virtual trading platform to the people around the world. Today people around the world are actively engaging in the forex market due to its infrastructural natures and features. There are some significant differences among a decentralized and centralized market. A decentralized market like forex-due to absence of regulatory authority and virtual currency trading platform is more volatile and dynamic than other financial markets. Here currency values are subject to many global and national economic factors.

Assuming of course you are serious and not just trolling this thread[/quote]

you are looking for something that will not be given to you but is there for everyone

go back to start and coll=ect =//

It is clear to me I cannot convince you of the worthiness of my cause. And I'm afraid that you will not convince me of the worthiness of the use of Andrews pitchfork or most any other technical analysis tool. I am clearly at a disadvantage when discussing this particular tool because I don't feel I've studied it enough carry on an intelligent conversation...however I do believe the same of you when it comes to market structure. You have clearly studied this tool and made it an integral part of your trading. I am glad that it is working for you. However, I did start this thread to discuss the structure of the market and have not yet seen how drawing a "median line" or any other line on a chart (which can change with just a single setting) describes or shows the basic structure and/or function of the market...it is just a line, and an imaginary one at that. So I'm afraid me must agree to disagree...you have found something that works for you and I congratulate you on that and wish you great success. I have found something that works for me...but it appears opposed...yet another reason by markets function...opposing view points create party and counter party...with out which no market would exist

Excellent point sir, and quite correct. And the good and trade between nations (at times) are each a market in and of its own. Like Oil, or Corn.

Ah...OK...you are a math guy. Again I find myself ill-equipped to delve too deeply into math. However, I do think mostly in binary logic. I'm afraid that this is what has taken me so long to understand how the market works...it is completely illogical. The participants who enter orders, like my friend above and I do so using completely opposing and sometimes confusing reasons. Add to this that each participant, be they person or computer, has a logic subset that is unique to that participant. Throw emotions into the mix and stir vigorously. I am unaware nor can I believe that any mathematical algorithm is capable of interpreting or even in the short term predicting human behavior as expressed in the markets.

Yes, yes, I understand about quaint, and HFT. I do not know all the details about them, but I do know they have their servers as close as physically possible to the market's servers (time) and that they read the order flow looking for "inefficiencies" and that they are constantly submitting then pulling orders from the market to induce movement (order flow/volume) and finally, their trades are usually miniscule in duration. 1-5 ticks. (time/price)

These formulas use the market structure like I do, only far more quickly and efficiently. But they are essentially doing the same thing I do. They read and process the market structure on a minute by minute (tick by tick) basis. They evaluate the relationship of time/order flow/volume/price and look for inefficiencies. When on is found they enter the market quickly and take advantage of that inefficiency and then exit quickly to keep profit high and risk low.

Not sure where to go with this to be honest. I would just simply state for the record my unequivocal view that historical support and resistance, and supply and demand can be used as contextual reference points against which current price-action and trading opportunity can be determined. If you hold the opposing view then, as you've already intimated to others in the thread, it's not going to be possible to have a meaningful discussion. Good luck with the topic, however, I'll eject myself here but remain an interested observer!

[quote=DonPato;10927812]{quote} Ah...OK...you are a math guy.

Letters ”come together”, which is a joy in any language.
Price is just a number, as is time. Take a good look at them, then click

I’ve scanned the posts to date, and I hope this thread stays positive and informative as it is. I have a perspective on structure to share. Let me start by saying that the forex has structure because central banks (CB) insist on it, and tier 1 and 2 banks function in a way that delivers structure (I’m looking at a 4h to 1D chart). Most of the time, this relationship (between CB and Tier banks) works well, but when structure falls apart, the CB’s take control (ie, 2008). No matter what, order will be/is imposed on the forex, and the processes these organizations use, in respond to fundamental announcements and regular international fund flows, will determine structure. Hour by hour, everything you see on your charts is part of an effort to build, maintain, or adjust structure. Very few people understand structure, and I’m aware of only a few who make structure analysis the primary work effort of their trading. If you think of TA as a tool to analyze the behaviors of the banks, and couple that with a robust effort at structure analysis, you likely see things in the charts that other don’t see. It’s a good thing.

like my friend above and I do so using completely opposing and sometimes confusing reasons. Add to this that each participant, be they person or computer, has a logic subset that is unique to that participant. Throw emotions into the mix and stir vigorously. I am unaware nor can I believe that any mathematical algorithm is capable of interpreting or even in the short term predicting human behavior as expressed in the markets
Quote don pato

What we can determine from the chaotic way the market operates and all these conflicting reasons why participants place orders is the structure it creates.the constant being time and the restriction of price.regardles of whom it is all are working within a time threshold and a price threshold.this determines the ranges within those parameters. The clustering of orders and the restrictions within those boundaries can be figured from this set of constants.price will converge at one point in time.this repeats and repeats. This being the structure from human participation and the natural laws we are governed by.

The lines are used to measure the structure. To use simple terms. A market will move in long legs (impulse) and short legs (pullback). Generally each long leg will have at least 2 like sized pullbacks. Keep in mind I'm looking at 20 minute charts. There are also levels of impulse and pullbacks within each impulse leg. These pullbacks will generally be the same size geometrically. Many traders like to use fibs or pivot points etc. I look for the same size geometrically. Elliott is correct with his thoughts on alternation. Alternation in the shape of the pullbacks is extremely common.

The U/J is a good example this week. At the end of last week price flattened out and went horizontal, chewing up time with little price movement vertically. This was followed by an impulse leg down. It is now going back up in what appears to be a pullback. This pullback is much more vertical with price and using less time, so far. It's in process as I type this and could become a mute point if it blows out the highs. The lines capture this difference in the time/price ratio reasonably well.

Could your concept and uses in volume assist a trader? Yes. Is it available to the forex trader? No, not on an intraday level.

So I just keep rolling along with what I see, with the tools I use. Each trader has his own eyes and his own crazy.

Hello,

There is a dual approach to price.

The first is to consider the market in terms of trend: Enter at a point A, Exit at a point B.

The second considers prices as recurring. If price visit point A, you have x% chance that this price will be revisited.

Both approaches are "true" but paradoxical for trader.

If you solve this paradox, you find the "structure" of market.

Green pips

I had such high hopes for this thread....I am trying to engage a conversation about HOW the market actually works and what is actually causing all those bars and lines on your charts...but I am getting anatomy lessons on the fractal nature of the human hand. Seriously??!!

Many confuse the price bars displayed on your chart as "Structure" it is NOT...That price pattern on your chart can change simply by changing the chart from logarithmic to arithmetic. The actual structure of the market is not comprised ONLY of price...this is what I have been trying to discuss.

Support-resistance...is a RESULT of structure. It happens when the order flow in one direction exhausts and changes hands...bid to offer...or offer to bid

I understand that when you've spent so much time and effort into studying something that it you become emotionally invested in that concept and defend it when it is challenged or threatened. I guess this concept is doing just that to many of you.

Well, I tried...I guess I've outgrown this forum.

OHLC (live market quotes) data are not formulated into a statistically measurable and logically sound arrangement of data which provides information…..

You don't have an edge when the data you use for analysis & charting is not formulated into a statistically measurable and logically sound arrangement of data which provides information. If your data is not statistically measurable, provides no tradable info, and non representative of market generated data/info (candlesticks) you have no edge….

"Market Generated Data (MGD) is the market’s transactional data organized so that price and price-over-time are displayed. The market variables are thus price and time. Price and time are well understood; price-over-time measures value. MGD is the source of the data used for analysis. When one plots price against time, it is clear which prices are most traded, i.e. are most popular and valued.

Transactional data comes in the form of ‘ticks’. A tick is created at each price change. Trading at a given price will not generate a tick. A tick carries two pieces of information, price and the time when it occurred. Throughout the trading day, there is a steady stream of ticks. The simplest way to present tick action is in a bar chart with equidistant times or in a point figure chart. Neither are ‘market generated data’ because MGD must display price and time".- Donald L. Jones CISCO-Futures

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If the only data you have available to you is OHLC what you need to do is "un coerce"/reformat the data back into a market generated format. Data that has both a "price" column and a column that marks "time".

By breaking the market into it's components/units: TPO's... "price*time events", "time price opportunities", "time that price occurred" , all the same. You now have a data set that is quantifiable & measurable is unbiased by observer TF (objective data).

Every time a price is "used"/quoted is an opportunity for trade. By breaking the data into tpo/events you have equal, quantifiable, "units of measure" for analysis……...

Frequency "Counts" of each time a price is used over time Gives you a single multidimensional distribution/display of prices (Structure).
"Demand" can be read from the frequency of times a price has been used........

By keeping a tally/count how many times a "price" is used at each 30m interval your data now has a "price" column and you have a count of the "times" a price was used in a "time" column. you have then restored your data to it's original market generated Price*time format. Now you have a display of MGD that displays both price and time in which you can now use for analysis….

Displaying the frequency of prices used over time gives you a "structure" of "Demand"

Pasted from <https://www.forexfactory.com/showthr...6#post10529306>
{quote} Are what you are saying is that demand is created by the amount of instances a price point is tested and then rejected to the upside? Not so much as when as much as how often?

No, what I am saying is demand can be measured by the amount of times a price used. Each time a price is used it's counted as a tpo "event". A unit of measure.

Each x or letter signifies that that price was traded at least once in the specified half-hour. An x or letter is called a TPO (Time Price Opportunity, or That Price Occurred). No matter how many times a particular price trades in a specified half-hour period, only one TPO is recorded. A TPO has nothing at all to do with volume.

Many people think that the "volume of ticks" somehow relates to "volume of trades" or "volume of contracts". They often take the word "Volume" and use it interchangeably with the word "Demand" to mean the same thing.

The volume of trades is not a direct indication of actual "Demand".
The kind of "Demand" that moves the market, is created from traders willing to hold their positions overnight. (i.e…….open interest)

Lets say you have 100 traders all enter the market creating a High volume of activity intraday.
98 of those traders are buyers, and only 2 are sellers, combined you have a high volume of activity.
Does that mean if you have a higher volume of buyers intraday that prices will go higher? No.
If 98 of those traders (buyers) exit the market before/at the close, there is no actual buying demand created that will cause the market to move higher. If the 2 sellers are holding their positions beyond the close, the only actual demand created was "Selling demand". The demand is determined by the 2 sellers still holding positions, who still actually have skin in the game.

"Volume" is not a direct indication of actual "Demand".
High volume = Liquidity (not actual Demand)
The word "Volume" is not interchangeable with the word "Demand"
Intraday traders (day traders) provide liquidity, but have little to do with actual "Demand".

While the short timeframe participants transact up to 90% of the volume, their presence does not change the market.
What percent of the volume of transactions are a result of intraday "speculation"? What percent of the volume of transactions result from a genuine need/demand for a product/currency?

Volume = activity
My concern is "Demand".

How much of that activity contains "actual demand" created by traders willing to hold their positions overnight? Volume doesn't solve the "Demand" equation.

As a trader I am interested in measuring Demand. Who, how & where prices are being used is of interest to me. Traders with the intention of holding positions overnight, with the most skin in the game, operate in places most advantageous to them. Not the same high volume areas most valued by intraday traders with no actual skin in the game, who ultimately end the day flat, creating zero demand.

And as volume is not a direct indication of "actual demand", it has little or no value to me personally as a spot forex trader. demand moves the market, not volume (activity)
Pasted from <https://www.forexfactory.com/showthr...6#post10529306>

So in a nutshell, your saying that a TPO shows demand?

And if so. What's the proper look back period for a TPO to judge demand?

Hello Don. I was thinking of starting a new thread on a certain topic, but I think it will fit nicely into yours.

The question I'm pondering is how do the Tier 1 banks, the market makers, make back the liquidity they have to provide to the buy side during, say, demand frenzy - on a large time frame? Time is a very crucial matter in this question. I suppose on a very small, intraday scale, a Tier 1 bank can allow itself to be short a certain amount of money (even if it's serious money) as it can all be made back with market moves within that timeframe. But what about when demand imbalances last weeks, months, years? As they commonly do?

For example, there has been an order flow imbalance (to the buy side) in the Euro since the beginning of 2017. The bid for euros has been great, and not all of it was met by the offsetting offers, since if we look at the CFTC data we can clearly observe that the market makers have been heavily short euros since pretty much the beginning of that period. That's more than a year now that those liquidity providers have been taking the euros out of their own pockets to fill their clients orders. I assume that the plan is to make that liquidity back ( =buy back the euros they need for their stockpiles) during a market downswing, but is it really? The plan? Also, what happens in the meantime? That's a LOT of time to be short a LOT of euros.

I'll be happy to hear your thoughts, guys (and girls!)

Because people are not immediately responding with ideas that conform to your idea of the market, that admittedly took you a long time to grasp, you are giving up?

You haven't really shared anything. Try to enlighten those who wish to listen, and maybe point out some resources or actually share something tangible.

A picture is worth a thousand words.