quotStructurequot of the market
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Thread: quotStructurequot of the market

  1. #1
    Hello all...I've tried several times to provoke some dialogue around this topic. I really don't know if it is too boring or if no one is actually interested. But I will try one last time. . .HELL OF A WAY TO START A THREAD...

    I'd truly appreciate All points of view on the Subject of the structure of this market. . .meaning why and how do you feel the market really works? Further. . .knowing this, how can this understanding assist you or facilitate your trading?

    I ask this because I see many threads on the market with several different systems using different mathematical possibility formulas, that, when I look at them don't appear to take into account how the market actually functions. Or to put it differently, how can that cute little line, or pattern, or indior, or ___ (fill in the blank) inform you exactly what the market is currently doing? What does it tell you about the market structure...I'm willing to bet that most of those things you put on your chart don't actually tell you anything and actually may cause or add to your confusion...I know they do to me.

    Wouldn't it be advantageous to be able to check at a chart (how you have it configured) and deduce exactly what the structure of this market is doing? And from this moment you might be able to comprehend what (statistically/logically) might happen next? If you could do that. . .wouldn't that be the start of a true edge? Not based on a few magic indior or any imaginary line or any price pattern resembling a ghost, or a flag, but a real (yes possibly even intuitive) understanding of how the market operates and so how price will (in all likelihood ) proceed in the not too distant future.

    I'd prefer this to be the focus of this thread. . .tell me how YOU view the structure of this market and that I will inform you how I view it. . .perhaps this exchange of ideas will stimulate us both into something we have never considered before and boost our personal comprehension and interaction with this expansive machine we call, the market.

    I invite your involvement

  2. #2
    I was not looking for a fight. Just wanted to understand how to use or apply what he's talking about to improve what I already use.

  3. #3
    Great dialogue friends. . .lets keep it going!!

    Thus, now lets mix in Order Flow. . .as most of us understand that this is literally the flow of orders coming to the market. And as we all recognize that every order big or small must have a counter party. A buy and a market matched together. No one. . .NO ONE. . .can participate from the market if there isn't at least one counter party to choose the other side of your order. Without two sides no market exists. I've heard orders described as passive or aggressive. While I try not to use adjectives to describe the structure of the market this analogy can be helpful to imagine the TIME element on the market.

    Basically there are two types of orders. . .market and impending. Market orders are those orders that are entered immediately when you hit the BUY NOW button. They are transacted on the last quote of your feed (supposing your feed is actually fast). However, as a result of TIME problems your order may slip because your order did not make it into the computer quickly enough. . .but I digress

    The other kind of order is a pending order which you place to be filled when the price reaches a specific point. Hence pending orders are considered less competitive (or passive) while market orders are considered competitive. Bottom line...

    All orders both buy and sell must be matched using a counter party. Assuming that those orders are fulfilled any remaining unmatched orders will ascertain whether the following tick is up or down. . .the market will tick higher to fill unsatisfied buy orders, and conversely it will tick lower to fill unsatisfied sell orders. It actually depends on where the excess of orders is at any given moment (another element of period ).

    This also leads us directly to VOLUME. The size of every order also has a direct impact on price movement. In the event that you or I wish to transact our semi automatic mini-lot we can get filled immediately. . .and in reality the order is probably absorbed by your broker. (who becomes the counter party to your trade). However, if you're SaxoBank and you want to move 1,000 regular lots, you want a whole lot of double or single lot traders to finish or satisfy your order. Thus this excess of unfilled volume literally creates order flow in the market causing price to maneuver...

    AT this point I would call it a toss up. . .like the chicken and the egg... Can order flow beget quantity? Or does Volume beget order flow? Can it matter. Should you see price moving. . .both are at work. Thus even prior to that statistical price pattern has shaped, you can recognize the order flow/volume is generating movement in one direction or another. . .and conversely, you can see those forces waning. . .especially if it is before a major news announcement (at what time?) Or the start of the NY session. . .yet another moment.

    TIME. . .ORDER FLOW. . .VOLUME. . .then PRICE.

  4. #4
    Lets begin with TIME:

    Why is time such and indispensable part of the market? What does TIME need to do with anything? TIME is merely time. . .right? WRONG!

    Timing is fluid and dynamic. . .our charts (most of them ) have been divided into periods of time, it takes some time for one to look at or absorb any assessment you may make any current market condition. It takes time to place an order and time for that order to be filled. Time is an integral factor in news and fundamental announcements and also the time that it takes for the world to absorb and react to any market condition is dynamic and fluid. Most significantly time is variable and an essential variable at that. Price movements might take quite a while or a short time to finish. . .once completed, price movements may range or not, and all that takes some time to determine.

    Yes period is very important and should be among your first considerations when determining the current market requirements.

    Lets consider the case of a futures market, like corn. Lets say its the start of the growing season. Time is needed for that season to finish, so the speculation concerning the output of that crop will vary widely during the entire year. Imagine if there's a large crop planted? Imagine if 1/2 way though the season, the harvest is flooded? Imagine if there's a drought? Each these things happen in the dynamic of time. Thus from one week to another or from one day to another, or even when bad news comes from one second to another, price may vary substantially. This is determined by the energetic of period...

    The same as another case, this time the stock market? What happens when a major company has bad news to report? Do you think that they will postpone that report as long as possible? Is that not another energetic of time? How about whether it malfeasance is found? Do you think that traders will waste TIME in attempting to correct their positions?

    Timing is variable and lively

  5. #5
    Just how do we use that in our trading? How does it help us to understand that TIME is fluid and dynamic?

    Well how about this? Imagine if you're in a position (let say a long) and while price is moving your way, it's doing this very slowly. . .and as it does go your way it does not go very far. In other words it's carrying a LONG TIME for your place to maneuver as you anticipated it might. Does rate surprise you? Or where you expecting it to take? Was there a particular quantity of time you anticipated your place to show benefits? Did that matter of time allow you to doubt the veracity of your own position? Can you bail out thinking that,. . .its just not happening? Or perhaps did you think,. . .just slightly more patience. Then watch it all cave ?

    TIME has a greater influence on your trading than you might think. Tell me what you think?

  6. #6
    Quote Originally Posted by ;
    Would not it be advantageous to be able to check at a chart (how you have it configured) and deduce what the arrangement of this market is doing? And from this moment you could be able to recognize what (statistically/logically) could happen next? If you could do that. . .wouldn't that be the start of a legitimate border?
    Makes great sense to me.

  7. #7
    Do you want to limit discussion to the four components you've listed? My view of market structure is different from yours.

  8. #8
    Quote Originally Posted by ;
    Time, Order Flow, Volume, and Price
    Deeper then the market is.

    Where does the quantity come from. Who makes the Order flow? Time what time, time only is a reactionary measure to evaluate the market. 1 min, 5 mins, 1 hour? Whose time? Time matters not, look at your clock, gauge the market by your clock, do you? Well you should not. Banks generates it, make it grow. Its power surrounds us and binds us. You must understand the money develops, banks, governments, forex, between me, you , this forum, your trading platform, everywhere.

    Money expands and who controls the issue of money?

    Allow me to ask, what can you see in this chart?

  9. #9
    The majority of traders just measure with horizontal lines, boxes, rectangles, support and resistance. Among the things not generally considered when employing an Andrews pitchfork or median line is that it is measuring an angle that can and does include time and price. It is a projection of time and price to the future. Having said that most people don't give a shit about time since there's no money in it. They simply expect to take some time to get for their price to depart. Consequentially they really never examine time.
    I would say that having indiors in your own chart obscures (such as MA's) the opinion of the price action that's going on to make the indior. Because those tools are all that is looked at, the analysis of the underlying structure gets shrouded and never is fully understood or valued. It's rare to see that the trader say on these forum that the tendency is going one way or the other due to higher highs and higher highs or lower lows and lower highs. It is usually as they're taking a look at the indior to tell them. They then don't have to make the distinction themselves subconsciously they can blame the indior. I mentioned a 4th pivot the other day along with also a trader asked me exactly what I meant by that. I wasn't sure if he didn't know exactly what a pivot (flip ) was that 4 stems after 3.

  10. #10
    Quote Originally Posted by ;
    The majority of traders just measure with horizontal lines, boxes, rectangles, service and resistance. One of the things not generally contemplated when employing an Andrews pitchfork or median line is that it is measuring an angle which does and can include period and price. It is a projection of period and price to the long term. Having said that most people don't give a shit about time since there's no money in it. They just expect to take a while to get to their price to depart. Consequentially they really never study time. I'd say that using...
    Dear DonPato, thanks for not giving up on getting a thread such as this began. You make some really good things and I do understand your view to lead to the beginning of an actual edge. My opinion is that perhaps time on its own is meaningless, but if time is jumped to another aspect it will become a factor which can be manipulated to find different results. Anyone heard of the'Iron Triangle'? It has 3 points; TIME, COST and QUALITY and tries to demone the relation ship between these 3 factors to receive a item. This implies that if I want to have top quality price signals from a signal supplier at rapid speeds, I must give a large amount of cost for the support. By signal, I suggest the data tick of currency prices. Nowexactly the same with order flow, if you've got lower quality (slower data) you are not going to have an advantage. That is even if it is possible to have data for order flow with the FX market being run by one central system for order management from my comprehension.
    So, long story short: Time alone doesn't have much significance if you don't use it to quantify something from point A to B, such as quantity of orders exectuted in Xseconds.

    Sossos, the real issue with angle popularity is that the general platforms scaling is Sh1t should you use auto scale. This makes it very difficult to bother with angles after some massive price action, the new smaller pubs are condensed so much. And provide that other trader a break, as maybe you have to revisit how pivots could be communied to other people. Generally there is just 1 pivot and remainder are labelled R1, R2,R3 and S1, S2, S3 and sooo on. . .And if in further doubt, Provide the other trade using a circle and picture what you mean and don't blame them for mistake that the ways you learned how to explain pivots are different.
    Kind Regards,

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