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Why it is possible to predict price movement?

  • #321
  • Oct 24, 2015 6:51am Oct 24, 2015 6:51am
Quoting Captain Jack
{quote} Most retail traders orders actually never hit the market...they are kept in house at the broker and house traders take positions against them... -CJ-
agree 100% in your statement however retail traders positions insignificant as far as what brokers do with that info.
I studied this subject closely.Price does not move against retail positions because they have strong positions one or the other way.It moves because MM,Banks move it.Its a fallacy that price moves contrary to retail because house wants their money.
Market is too big to move price by Oanda or any other broker.There is no statistical data that one can prove that's the case.
I have shorted GU when GU was at 1.70 last year and Euro at 1.38 and both cases almost all retail traders were short as well.Well we know the results correct?There are numerous examples that price moves are not retail influenced.
regards
In trading, you have to be defensive and aggressive at the same time
  • #322
  • Oct 24, 2015 6:53am Oct 24, 2015 6:53am
Quoting Davit
{quote} Hi K In greater scheme of things retail traders don't move price.Simple as that.Weather dumb or smart. regards
A retail trader can via an ecn broker move the price, but the effect is very small. Retailers on market maker brokers do not move the price, because they in principle don't have the access to the real market (I suspect that MM brokers, in order to maximise profits, divide the customers into A-profitable and B-nonprofitable categories where they match against or trade against B and hedge against the losses from the As on the real market). My point is that the retail behaves the same as the dumb money on the real market. However, I only have information from the retail, and not from the global forex market. Similar conclusions (I think Larry Wiliams started this) can be drawn from Commitment of traders data in other asset classes on centralized markets, where you can see the contributions of large and small speculators separately but with only one data point per week.

Cheers,
k
  • #323
  • Oct 24, 2015 6:56am Oct 24, 2015 6:56am
Quoting ragl
BARF indeed Captain Jack!! I couldn't resist having a scan of the EURUSD chart to see what I could find, and lo and behold: {image}
Yeah...kinda like that... it has a little bit of distortion at the top, but they may not have had the orders to run the HH or highest high to the center. You will usually see a new High (H), followed by a Higher High (HH), and then the Lower High (LH) confirms.... when you draw the bump trend line, draw it from the bump start to the low point of the topping action....like the dotted line I added to your chart.... Confirmed entry is a break of the bump trend line, but if you recognize this, as you did, stick the order as high in the pins that form during the HH...then 10-15 pips above the pins are your stop..... ride it to riches! Nice 1st find.... they are all over the place!

Yes, that's a "stacker" set up as well... you have it right and you make them pay!

Note the angle of the lead in trend line, most are around 30-40 degrees.... they will nearly all look the same! Here's a little more info on that pattern that explains it in greater detail. I used it trading stocks and brought it into my forex trading. MT4terminal has an angle tool.

http://stockcharts.com/school/doku.p...ersal_reversal

BARF's form to the downside as well...keep looking for them too... same thing....

-CJ-
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A man is not defeated when he is beaten, he is defeated when he quits.
  • #324
  • Oct 24, 2015 6:58am Oct 24, 2015 6:58am
Quoting kprsa
{quote} A retail trader can via an ecn broker move the price, but the effect is very small. Retailers on market maker brokers do not move the price, because they in principle don't have the access to the real market (I suspect that MM brokers, in order to maximise profits, divide the customers into A-profitable and B-nonprofitable categories where they match against or trade against B and hedge against the losses from the As on the real market). My point is that the retail behaves the same as the dumb money on the real market. However, I only have...
I respect your opinion and even could be true and most likely to be true but here is the truth that if you go to Oanda and take contrary position to retail positions when they are heavy short or long and do this lets say a year you will not be profitable.
There is no statistical edge in this.
In trading, you have to be defensive and aggressive at the same time
  • #325
  • Oct 24, 2015 7:06am Oct 24, 2015 7:06am
Quoting Davit
{quote} 1.38 and both cases almost all retail traders were short as well.
My argument was that the price and retail position was inversely correlated. That only means that when the price went down, retailers quickly switched to the buying side, and hence that is what the dumb money did. And hence the smart money must have sold (as evidenced by price going further down). It does not mean that the retailers couldn't have been short on average at the top.

k
  • #326
  • Oct 24, 2015 7:09am Oct 24, 2015 7:09am
Quoting Davit
{quote} I respect your opinion and even could be true and most likely to be true but here is the truth that if you go to Oanda and take contrary position to retail positions when they are heavy short or long and do this lets say a year you will not be profitable. There is no statistical edge in this.
This statement has little to do with what I said. Please read the previous post.
k
  • #327
  • Oct 24, 2015 7:18am Oct 24, 2015 7:18am
Quoting Captain Jack
{quote} Yeah...kinda like that... it has a little bit of distortion at the top, but they may not have had the orders to run the HH or highest high to the center. You will usually see a new High (H), followed by a Higher High (HH), and then the Lower High (LH) confirms.... when you draw the bump trend line, draw it from the bump start to the low point of the topping action....like the dotted line I added to your chart.... Confirmed entry is a break of the bump trend line, but if you recognize this, as you did, stick the order as high in the pins...
To be honest If I would see that in real time I would have taken 2 stop losses probably. I'm not expert about that pattern, but Isn't a LH before the red trendline break? Even if we pick your yellow trendline, doesn't it break a little before coming back and make a higher high? Thats why I dont find past charts analysys reliable, it is too easy to fit our expectations on the chart.
  • #328
  • Oct 24, 2015 7:20am Oct 24, 2015 7:20am
Quoting Captain Jack
{quote} Yeah...kinda like that... it has a little bit of distortion at the top, but they may not have had the orders to run the HH or highest high to the center. You will usually see a new High (H), followed by a Higher High (HH), and then the Lower High (LH) confirms.... when you draw the bump trend line, draw it from the bump start to the low point of the topping action....like the dotted line I added to your chart.... Confirmed entry is a break of the bump trend line, but if you recognize this, as you did, stick the order as high in the pins...
Many thanks for the added explanation CJ, plus the info links, it looks as tho' I have some work to do now..........

Kind regards,

Alan
  • #329
  • Edited 7:58am Oct 24, 2015 7:24am | Edited 7:58am
Quoting Davit
{quote} agree 100% in your statement however retail traders positions insignificant as far as what brokers do with that info. I studied this subject closely.Price does not move against retail positions because they have strong positions one or the other way.It moves because MM,Banks move it.Its a fallacy that price moves contrary to retail because house wants their money. Market is too big to move price by Oanda or any other broker.There is no statistical data that one can prove that's the case. I have shorted GU when GU was at 1.70 last year and...
Think so.... they can't move the market but they use "lack of liquidity" to explain a lot of price spikes within their feed.... something like these stop hunting bassturds. Those are 60-80 pips spikes.... and that's done in house.

-CJ-
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A man is not defeated when he is beaten, he is defeated when he quits.
  • #330
  • Oct 24, 2015 7:26am Oct 24, 2015 7:26am
Quoting Captain Jack
{quote} Basically yes, but it's really all about the levels and where you are in the cycle. That is the key. Once location within the cycle is known, all "intent" is known as well.
Got it, thanks for the explanation.

Quoting Captain Jack
{quote}You use a H4 chart so I take you are trading on that period. What is important is to check the time frames above and below your trading period... there could be an underlying cycle that you are missing or you can get a better overall picture of that cycle.
So true. I was actually watching that pair on the M15 TF and it was only later when stepping up to the H4 that I saw the PA that for me constitutes a short entry. But by that time it was too late. It can be difficult finding a sweet spot between the number of pairs one trades against the depth that one must analyse each pair in order to get a view of where that pair is in the "multi-timeframe" cycle. Still working on that one...

Here's a pic of my first baby (not the actual one but similar model). Taunts welcome; I've heard them all lol

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  • #331
  • Oct 24, 2015 7:26am Oct 24, 2015 7:26am
Quoting the redlion
{quote} I agree with most of what you have written here on this post, except please define what you mean by lagging signal. Lagging LN(Yt/L^nYt) by taking ACF and PACF shows negligible serial correlation within 95% confidence bands. If you are speaking about lagging positive/negative correlated instrument via EMH it is more likely the case that the arbitrage opportunity would be in milliseconds given our HFT algos.
Yes you are correct - I was speaking in general terms. That is, if you were to find either a signal which behaved like an AR(n) process (up to statistical confidence) or if you were to find two instruments such that L(Y,n) (call that the n-th iteration of the lag operator) is highly correlated to X, then of course one has a statistic arbitrage trade (in my view) or a predictive signal. Of course, such things do not occur often and almost never persist. In fact I'm looking at a method now to locate stable relations such as those mentioned.
  • #332
  • Oct 24, 2015 7:31am Oct 24, 2015 7:31am
Quoting Mag357
{quote} To be honest If I would see that in real time I would have taken 2 stop losses probably. I'm not expert about that pattern, but Isn't a LH before the red trendline break? Even if we pick your yellow trendline, doesn't it break a little before coming back and make a higher high? Thats why I dont find past charts analysys reliable, it is too easy to fit our expectations on the chart.
So I take it you haven't visited the link I posted with the charts??

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
  • #333
  • Oct 24, 2015 7:31am Oct 24, 2015 7:31am
Quoting Captain Jack
{quote} Think so.... they can't move the market but they use "lack of liquidity" to explain a lot of price spikes within their feed.... something like these stop hunting bassturds. Those are 60-80 pips spikes.... and that's done in house. -CJ- {image}
This is why I don't use hard stops and trade smaller multiple positions instead of 1 large lot.This is very common on major holidays
I trade 2 accounts one Oanda and the other MBtrading.In general spikes on MBtrading are smaller and they are ECN broker but still spikes are there.
regards
In trading, you have to be defensive and aggressive at the same time
  • #334
  • Oct 24, 2015 7:33am Oct 24, 2015 7:33am
are there live trades coming up next week ?
  • #335
  • Oct 24, 2015 8:12am Oct 24, 2015 8:12am
Quoting metta87
are there live trades coming up next week ?
I may not even be here next week... just stopped by to update the chart and had some spare time.

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
  • #336
  • Oct 24, 2015 8:14am Oct 24, 2015 8:14am
Quoting Davit
{quote} This is why I don't use hard stops and trade smaller multiple positions instead of 1 large lot.This is very common on major holidays I trade 2 accounts one Oanda and the other MBtrading.In general spikes on MBtrading are smaller and they are ECN broker but still spikes are there. regards
As far as I'm concerned, a hard stop is nothing more than a "TAKE MY MONEY" sign....

Those posted charts are not on holidays...they are continuous and run for months like that....They were probably using Boston Technologies Back Office Dealer Plugin

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
  • #337
  • Oct 24, 2015 8:16am Oct 24, 2015 8:16am
Quoting ragl
{quote} Many thanks for the added explanation CJ, plus the info links, it looks as tho' I have some work to do now.......... Kind regards, Alan
Those are real money makers, easy to spot as they form and they occur on all time periods...

Good luck with your hunt!

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
  • #338
  • Oct 24, 2015 8:41am Oct 24, 2015 8:41am
Quoting simond2002
{quote} Got it, thanks for the explanation. {quote} Here's a pic of my first baby (not the actual one but similar model). Taunts welcome; I've heard them all lol {image}
My daughter had one similar to that.... not implying anything but she did! Hahahaha!

2 wheels is 2 wheels... ride safe!

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
  • #339
  • Oct 24, 2015 8:54am Oct 24, 2015 8:54am
Any thoughts?

Thanks for the lessons :-)
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  • #340
  • Oct 24, 2015 9:18am Oct 24, 2015 9:18am
Quoting srt
Any thoughts? Thanks for the lessons :-) {image}
Is that your best guess?

-CJ-
A man is not defeated when he is beaten, he is defeated when he quits.
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