Charts: Reality or Artefact

[meanreversion]

Don't forget that the spot trader will occasionally get flattened by a client, i.e. paid in a large amount on a tight price then will be unable to cover. Such is life. Their main bread and butter is 1) front running orders, 2) going with client flow for a few pips and 3) jamming stops in Asia time. I spent many years working in a FX dealing room, and every spot trader when asked by the sales desk to (e.g.) buy EUR 100mio, the first thing they would say is "What's that?" pretending not to hear. By the time the salesguy repeated the instruction, they would already have bought EUR 30-40mio on the EBS at which point of course the market would be higher.

 

[Jumpinjack]

Don't forget that the spot trader will occasionally get flattened by a client, i.e. paid in a large amount on a tight price then will be unable to cover. Such is life. Their main bread and butter is 1) front running orders, 2) going with client flow for a few pips and 3) jamming stops in Asia time. I spent many years working in a FX dealing room, and every spot trader when asked by the sales desk to (e.g.) buy EUR 100mio, the first thing they would say is "What's that?" pretending not to hear. By the time the salesguy repeated the instruction, they would already have bought EUR 30-40mio on the EBS at which point of course the market would be higher.

Well that maybe how it was where you worked but I can only go from what I know. But depending on the client a bank will also give the client a better deal, i.e., in that the bank wioll not make money on that trade/order but keeping the cutomer happy in the long run is profitable. ASs far as I am aware the major banks will only begin at 6.00am GMT and finished by 5 pm GMT in London at least, so it must be other banks doing your stop running but I suspect large brokers! They will go with the flow thats true but usually they take the other side, i.e., if large client sells euros the bank will buy dollars! so thats no exactly front running.

 

[meanreversion]

Well, most if not all banks will have a desk in Asia, FX being a 24hr market.. Yes, of course, keeping the client happy is paramount, but if the client calls to buy in a bid market, you can make it appear as though he has been given a good fill whilst nicking a pip or two for yourself. Don't get me wrong, I am not siding with either the spot trader or the client, ultimately both have to make money. The perception of getting a good fill is more important than the mechanics behind it.

 

[futures_man]

My 0.02 cents:

What moves the market are people (even automated algos are based on some human ideas)
Markets are random (meaning by that that we can't really tell what the S&P or Oil or some stock will be doing in 1 year)
People behavior (crowd and individual ) is somewhat predictable given cretin situations
Charts are nothing more the a visual representation of how people (crowds of people) behave during a particular time-frame

Optimistic
Pessimistic
No opinion

This is a true democracy !, everyone voting all the time on their opinion of the markets .
People like to gather in groups (or places of close proximity) i.e. support and resistance levels

Price action (and patters) can tell you to some extent how the crowd is reacting

 

[0007]

My 0.02 cents:

What moves the market are people (even automated algos are based on some human ideas)
Markets are random (meaning by that that we can't really tell what the S&P or Oil or some stock will be doing in 1 year)
People behavior (crowd and individual ) is somewhat predictable given cretin situations
Charts are nothing more the a visual representation of how people (crowds of people) behave during a particular time-frame

Optimistic
Pessimistic
No opinion

This is a true democracy !, everyone voting all the time on their opinion of the markets .
People like to gather in groups (or places of close proximity) i.e. support and resistance levels

Price action (and patters) can tell you to some extent how the crowd is reacting

"Markets are random (meaning by that that we can't really tell what the S&P or Oil or some stock will be doing in 1 year)"

That may be true in many cases much of the time but not for all instruments the whole of the time. There are (a variable pool of) cyclical stocks where it is quite possible to predict where they will be in 3 - 6 - 9 mths time. See writings of J M Hurst on cyclical analysis.

 

[trader_dante]

Have you ever seen a JP Morgan research report talking about pin bars?

Have you ever seen a JP Morgan research report correctly predict the market direction?

Me neither.

 

[trader_dante]

This bothers me more and more.

There is a reality to the markets, that a specific size of transaction results in a market move. Government decisions on rates and such-like, as well as banks, also cause a real and specific, and qualitative move in prices.

We trade patterns, candletsicks, support and resistance, and MA bounces.

But, arent patterns, bounces, etc, artefacts of reality, rather than the reality itself?

A candlestick is an artefact of a price move, however it may be caused.
MAs are artefacts of price movements.
(last week, when I read that "price bounced off an MA", I cringed, I used to believe stuff like that, ages ago.)
Even double-tops and 1-2-3 reversals, for heavens sake, are artefacts.

How do you feel trading an abstract representation of reality, rather than reality itself??

I mean, when you're driving a car, you are driving your visceral experience of the vehicle, not the manufacturers recommended figures. Your experience of the stopping distance is based on your knowledge, not the manuals matrix of stopping distances.
When a dentist decides to drill a tooth, he is drilling a specific, unique event, not a standardised, ideal event taken from a manual.

Charts: reality or artefact?

Doing my head in, and the week hasnt even started.

The way I see it, it doesn't matter one iota what the reality is since the reason for the reality, shows up in the price....

Analysts and newspapers want to be taken seriously so they can never mention the price action because people want to hear:

"Unemployment figures were bad so the market tanked but later it rallied after participants said the figures were not as bad as expected by a consensus opinion."

That's what the conservative investor and average joe wants to read over his orange juice and croissant at breakfast.

Not: "Some of the bigger particpants decided to trap some bulls by breaking a large support but after they sat on the bid taking all the offers, price rallied, forcing bears to cover and new buying pressure into the market."

The real reason for the market move for 99.9% of us is pure speculation. But does it matter?

It is what it is.

 

[arabianights]

Have you ever seen a JP Morgan research report correctly predict the market direction?

Me neither.

About 50% of them

 

[tenbobtrader]

Have you ever seen a JP Morgan research report correctly predict the market direction?

Me neither.

you have to read them from the back TD



oh and don"t forget to turn them upside down, then wait six months

thought they would have told you that at the prop shop :whistling


Andy

 

[pedro01]

have you ever seen a jp morgan research report correctly predict the market direction?

Me neither.

Booom ! Lmao !

Harsh but fair....