Price

[MrGecko]

That's great MrG... Where's it from?

I wrote it as part of my TradeGuide (basically a lever arched file full of notes / examples covering all sorts... Candlesticks, chart patters, info on what and how economic indicators measure etc...)

http://www.trade2win.com/boards/first-steps/30825-mrgecko-s-briefcase.html#post466400

It's the 1st page of the "Anatomy of a Breakdown", followed by an example of how I try to "build" a trade. Too long for most people to read tbh.

 

[MrGecko]

If anyone here uses PnF or MarketProfile regularly, I'd be grateful if you would post some charts w/ notation, explanations, etc... be interesting to see how the various methods to display Price Action interpret the same information.

 

[trader_dante]

So what of intent... what are the pros thinking...? The ones who will move the market and the ones who run your stops? Are they a step ahead...

They are always a step ahead because of the market mechanisms and dynamics.

Although that doesn't mean one cannot level the field somewhat in parts.

 

[Bladerunner]

The market makes any highs and lows in a day but only one true high and one true low

Hi Wasp & td


The market makes any highs and lows in a day but only one true high and one true low

posted that ages ago and Split asked me what it meant at the time "and don"t be so criptic Andy"

I read it in an article its just ...............

I found it thought provoking at the time and continue to

it was a traders responce to some daft journalist question regards his choice of trade early in the session

it will, I am absolute full discrection and double or even treble guess everything (work in progress ....thanks everyone)


But it will....its a constant

you see your entry and your mood lifts a little and .........blindness sets in, objective thought process comes under strain ...blinkered perhaps

Your not alone ..... every other F..cker see"s it to ..WAKE UP ! as Delorian was heard to say after securing a cool 50 million grant / loan from the British Goverment...........

" does"nt anyone let those people out of that room out or what ?"

Never done bad by control on the entry intra day, being late, sometimes very late

Some get away fast from the gate but you can learn to put a 1/3rd on then and enter up the rest or at least one more when you see it ............ them at work ......the men in black must be the adrenaline kicking in with one in .....but thats when you see their hand at work and thats the true entry

unless they are going to run through it all over again ?

more often than not you will get someheat on that 1st one and the true entry comes later, in the case of the ftse ..........much F..ckin later usually (Dow T time (5-6 uk) is a favorite or 3:57 pm )

rols used to advise many times ~

no timeframe less than an hour ............ GREAT ADVISE

you can learn the fakes shakes and how to anticipate them in the lower tf, what shape price is cutting on the chart in the lower timeframes gives many clues and takes hours of observation.

but ......

easy to end up seeing little shrubs and flowers and not the forest

and it gives you a mi-grain :-(



The ones that move the market = footprint of the big boys

sure and very fast I would imagine at key support and resistance levels, the better informed traders locals / pro"s get onside very fast ...... retail punters are way down the line =

gosh ! that range as just broken for sure THIS time, I must get involved ASAP

arrrrrrrrrrr Sh............ttt !!! back to value


.............Gone at dawn next day or dusk



its F..ckin war

be interesting to see who post what on this one .............. Mr Marcus would be the boy for this, he knows"s what the bars are thinking , even before they do :-O


I have re-posted this one many times well worth another post ~


A simple experiment might help me make my point. Next time anyone gets the ‘urge’ to take a position in the market just stop for a moment. Bring up a chart or two of the relevant instrument. Now place yourself in two scenarios and answer the following two questions;
1 ) Imagine that you have recently gone long in this instrument – where would you place your stop?

2 ) Imagine that you have recently gone short in this instrument – where would you place your stop?
Once you have identified the two stop areas you have identified an area where taking a trade is of much lower risk. It is of lower risk because you have found an area where temporary price deflection is likely to occur. In those areas the 95% are flushed out of their positions purely due to price – this is where you can step in. Obviously, if you have supporting volume as well then you are more than likely onto a good thing.

By Steve


post means nothing........the ranting of a mad man who"s had to much screen time, screen fatigue syndrome

defo moving to the higher timeframes its ......................arrrrrrrrrrrrrhhhhhhhhh !!!

latter

Andy

 

[rols]

How do you decipher closes and do you think it really helps in FX when the only real close is the weekend?

It's all about NET ORDER FLOW on multiple TFs

Well open up a window with M5 M15 M30 H1 H4 and D1 bar charts

There are two types of info

Actual completed closes and real time dynamic closes.

Trends are defined by consecutive HH or LL on whichever TF the trader is trading from.

Put very simply (in reality it's a bit more complex!)

For example the D1 trader must wait for the H4 or lower TFs to close lower than previous closes to enter the market LONG. (He needs sellers to buy from and must wait for the price on lower TFs to fall)


Jankovsky on NET ORDER FLOW on multiple TFs

Your best trades occur when you have correctly positioned yourself on the net order flow as traders in each successively higher TF choose to execute. For example if you are looking for a buy point, you would like to see the M5 M10 M15 price charts produce similar clues all around the same price area. At the exact same time the M30 and H1 price charts are likely neutral or slightly bearish after a move to the downside has already happened. The D1 and W1 charts may show a down day or weekly low within a broader weekly or monthly established range....As time goes on the market will continue to advance even though the the short-term TFs produce sell signals because the larger TFs are still attracting order flow from the buy side.

 

[firewalker99]

So what of intent... what are the pros thinking...? The ones who will move the market and the ones who run your stops? Are they a step ahead, are they seeing more? Is there more to see or is it just a struggle between buyers and sellers at all levels?

What do the pro's want you to think they are thinking? Who are the pro's? Are the pro's always on the right side of the market? Are they the ones that cause those high volume peaks?

 

[wasp]

It's all about NET ORDER FLOW on multiple TFs

Well open up a window with M5 M15 M30 H1 H4 and D1 bar charts

There are two types of info

Actual completed closes and real time dynamic closes.

Trends are defined by consecutive HH or LL on whichever TF the trader is trading from.

Put very simply (in reality it's a bit more complex!)

For example the D1 trader must wait for the H4 or lower TFs to close lower than previous closes to enter the market LONG. (He needs sellers to buy from and must wait for the price on lower TFs to fall)


Jankovsky on NET ORDER FLOW on multiple TFs

Your best trades occur when you have correctly positioned yourself on the net order flow as traders in each successively higher TF choose to execute. For example if you are looking for a buy point, you would like to see the M5 M10 M15 price charts produce similar clues all around the same price area. At the exact same time the M30 and H1 price charts are likely neutral or slightly bearish after a move to the downside has already happened. The D1 and W1 charts may show a down day or weekly low within a broader weekly or monthly established range....As time goes on the market will continue to advance even though the the short-term TFs produce sell signals because the larger TFs are still attracting order flow from the buy side.

So for someone who looks for a few trades a day, which timeframes would you advise looking at? Anything + daily seems excessive and overkill.

 

[Paul71]

What do the pro's want you to think they are thinking? Who are the pro's? Are the pro's always on the right side of the market? Are they the ones that cause those high volume peaks?

Market makers are responsible for a lot of movement, Taking responsibility for liquidity issues, at time it is they who are taking the opposite side, so i can imagine stop runs are high on thier list as a means to providing liquidity. There has to be games, otherwise the market would fail, but using s/r is a great way to get everyone involved, i suppose we all need to play the game and try and understand the games more. I must buy a book on market makers.

 

[trader_dante]

What do the pro's want you to think they are thinking? Who are the pro's? Are the pro's always on the right side of the market? Are they the ones that cause those high volume peaks?

There are several types of pro. There are governmental institutions. There are hedge funds. There are dealers, banks and brokerage houses. There are floor traders. There are professional prop traders. There are producers who have an intimate knowledge of their product.

The market has its own ecology. A good trader will, perhaps, start by studying this market ecology. But it is safe to say that the PUBLIC is the lowest member of the "food chain" and most of the public merely play the role of feeding the professionals - lining their pockets and paying for the upkeep of the system.

All these different types of pro have their own ways of playing the game and taking money from the public. But they are not, by any means, right all the time.

As I said, a study of them is essential. I can give a few pointers if necessary but an intimate study should be conducted.

 

[wasp]

Market makers are responsible for a lot of movement, Taking responsibility for liquidity issues, at time it is they who are taking the opposite side, so i can imagine stop runs are high on thier list as a means to providing liquidity. There has to be games, otherwise the market would fail, but using s/r is a great way to get everyone involved, i suppose we all need to play the game and try and understand the games more. I must buy a book on market makers.

http://www.trade2win.com/boards/general-trading-chat/18916-how-do-mm-s-work.html

A good thread here.

 

[wasp]

There are several types of pro. There are governmental institutions. There are hedge funds. There are dealers, banks and brokerage houses. There are floor traders. There are professional prop traders. There are producers who have an intimate knowledge of their product.

The market has its own ecology. A good trader will, perhaps, start by studying this market ecology. But it is safe to say that the PUBLIC is the lowest member of the "food chain" and most of the public merely play the role of feeding the professionals - lining their pockets and paying for the upkeep of the system.

All these different types of pro have their own ways of playing the game and taking money from the public. But they are not, by any means, right all the time.

As I said, a study of them is essential. I can give a few pointers if necessary but an intimate study should be conducted.

Great post and good advice. It is also worth remembering each market participants will be different (from the NQ to EurUsd).

 

[Paul71]

Thanks, Wasp and TD, i'll definately have a butchers.

 

[firewalker99]

Thanks for the answers with regard to my question regarding pro's. Good answers there... So here goes the next question. Yesterday I posted a chart and said:

...I've removed time, date, instrument and price levels because they are irrelevant: price is price.

Someone commented that this is not necessarily the case. The instrument might matter a lot. So how does it? Are the people who trade the EUR/USD any different from those who trade the ES? Or those who trade the GBP/JPY? Isn't human psychology (which basically drives the markets) the same? Why would the instrument make a difference, or are their specifics to each market?

Those in favour and those against, let me hear your arguments

 

[options]

Thanks for the answers with regard to my question regarding pro's. Good answers there... So here goes the next question. Yesterday I posted a chart and said:



Someone commented that this is not necessarily the case. The instrument might matter a lot. So how does it? Are the people who trade the EUR/USD any different from those who trade the ES? Or those who trade the GBP/JPY? Isn't human psychology (which basically drives the markets) the same? Why would the instrument make a difference, or are their specifics to each market?

Those in favour and those against, let me hear your arguments

All the same these days. May have been different years ago. Well in fact it was in Livermores day.

So my view is that it does not matter whatever it is your are trading. Only thing needed are price and liquidity/volatility, which I know the last two are two different things.
What I mean is today you have participants around the world trading say the s&p. Years ago how many people in England would have bought shares in American companies. So to a great extent they were country specific trading wise.

The cable between usa and gb was a big advancement. The forerunner of global instantaneous trading.

 

[trader_dante]

Following on from my previous post, here is a brief summary of some of the more important players that operate in the market and how they work:

Governmental institutions

One such governmental institution that we hear about in times of crisis is the US markets Plunge Protection Team. Former president Clinton advisor, George Stephanopoulos told “Good Morning America” on Sept 17, 2001, “There are various efforts going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the market. The Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges have an informal agreement to come in and start to buy stock if there appears to be a problem. They acted more formally in 1998, during the Long term Capital Crisis, and propped up the currency markets. And, they have plans in place if the markets start to fall.”

So, instead of flooding the entire economy with liquidity which would increase the risk of inflation, the theory is that the Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole.

This team is theorised to act at key levels such as new lows (thus creating a technical double bottom) or at major round numbers. By doing this they force bears to cover and attempt to initiate fresh technical buying into the market place.

As well as the PPT, central bank intervention is another key factor to consider. This is where a central bank buys or sells its own currency in order to drive it to a level that is in accordance with its objectives. Central bank intervention can take place in currency markets when they get drastically out of line and threaten to affect local economic conditions.


Banks

Banks role in foreign exchange transactions is particularly interesting. Banks make a good deal of profit in the FX markets and one reason for this is the lack of a central clearing mechanism for FX transactions. A customer that trades with a bank must, for all intents and purposes, exit a position at the same house it was entered. As a result of this, the bank always knows which way the customer will go.

Since money must also be deposited in advance of taking a position and most customers leave just enough funds to cover the size of their positions, the bank is able to know which way the trader will go once it has used up its available margin funds. They can use this to their advantage in quoting a spread on a large transaction.

Niederhoffer gives an example in his book "Education of a Speculator": "Assume a customer with $10m on deposit, as a 5% margin against the value of foreign exchange, holds long positions of $200m. If the customer asks for a quote, the bank will know he has to sell dollars and will be inclined to quote a bid/asked spread that is biased to a low dollar bid".

Banks talk also to not only each other but they also have lines with all the biggest brokers and get to know the big traders and how they trade. According to Niederhoffer the big banks keep computer programs that indicate the likely direction of each trade and whether the customer is a trend follower, a pyramider or a stop-loss kind of trader. Monitoring its customers can give banks the same kind of edge that poker players strive to get by watching the other players to spot regular patterns in the way they play (do they play every hand, do they always bluff, are they a weak hand that will fold if pressured etc)

They also have information that is detrimental to the public. They know where all the customers stops are. And can share this information freely with other banks in their network.

Dealers

Dealers usually make a profit on the bid/asked spread. This is their bread and butter. In some markets and with some firms the spread is so wide that the profit potential is huge. If you take a spreadbetting example, the spread on Euro Dollar in most spreadbet firms is 2 ticks. If I want to buy they can quote me 135.60 - 135.62. If I decide to be a buyer at 135.62 they can immediately go long the equal amount and capture the spread of 1 tick. If I do only a 1 lot (£7 per tick) then their commissions are £7 for a trade which is close to extortionate.

Savvy (and unethical) dealers can try to gain an advantageus position over their client by enquiring of the more naive ones whether they want to buy or sell before they offer the spread.

Also while we are on the subject of dealers that aid the order flow, it is worth noting that off exchange transactions can occur. For example, if you wanted to buy 5,000 lots in the FTSE future, you wouldn't hit market as you would take out every offer and get a terrible price. You would, in the most likely scenario, ring Liffe and have your bid matched up with another offer of equal or similar size. This won't necessariy show up on the chart but can create a volume spike.

Floor traders

Floor traders profits not only from the bid/asked spread but also as a direct result of the public's losses from slippage on their entries.

Floor traders are right at the centre of the action and can become more efficient at profiting in the game by such tactics as front running large orders that come onto the floor, running stops and quoting excessive spreads.

Prop traders

Prop traders, at least most of the ones I know, are looking to make regular profits in the market. They study the price action and what other locals are doing. They watch carefully to see where and how another trader or group of traders are accumulating (buying) where and how they are distributing (selling) and try to work out where they might need to puke (get out).

A very common technique for profiting that is used by prop traders is front running size on the bid or offer (watching carefully to see if its a spoof which is not a genuine bid or offer but one intended to give the impression of buying or selling).

A few traders at my firm made hundreds of thousands of pounds when they realised back in January that whilst all the US and European markets were going down, someone was coming in as a buyer in the Dax towards the close and therefore holding it up. When they noticed this, they knew that it was going to be forced lower once the buying had dried up so they would sell it each day on the following open. It was later theorised that the buying came from Jerome Kerviel, the rogue trader of Societe Generale. When it came to light what was going on, the bank was forced to close out the huge long positions that Jerome had been accumulating over three days of trading beginning January 21, 2008, a period in which the market was experiencing a large drop in equity indices, and losses attributed are estimated at €4.9 billion. Of course, the traders that spotted it and knew he would be forced to puke, made a fortune very quickly.

Producers

Producers often have an intimate knowledge of their product and the conditions surrounding supply and demand. This knowledge is an advantage in dealing. However, one should not forget that producers often have to hedge their inventory and so have no choice whether they enter the market and in what direction. If a Wheat producer needs to hedge his stock or a country needs to tender 100,000 bushels of Wheat then that order will make its way into the market and price will be affected accordingly.

This is really just a brief summary and should just provide some food for thought. I highly recommend anyone read Victor Niederhoffers "Education of a Speculator". One chapter in particular deals with the players in the trading game and its called "The Ecology of Markets". It is a VERY fascinating read into the dynamics of the markets and how the players interact with each other to "eat" the public who are the lowest in the markets "food chain".

 

[Paul71]

http://www.trade2win.com/boards/general-trading-chat/18916-how-do-mm-s-work.html

A good thread here.

Great thread, cheers for that one. One comment there, made me think about something i have been pondering.

It was a comment about mm/institutions buying and selling to each other as a means of creating interest....i wonder if this is the reason why sr holds very precise at times, but once the other participants get involved it doesn't hold so true. Just a thought.

 

[Paul71]

Following on from my previous post, here is a brief summary of some of the more important players that operate in the market and how they work:

Governmental institutions

One such governmental institution that we hear about in times of crisis is the US markets Plunge Protection Team. Former president Clinton advisor, George Stephanopoulos told “Good Morning America” on Sept 17, 2001, “There are various efforts going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the market. The Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges have an informal agreement to come in and start to buy stock if there appears to be a problem. They acted more formally in 1998, during the Long term Capital Crisis, and propped up the currency markets. And, they have plans in place if the markets start to fall.”

So, instead of flooding the entire economy with liquidity which would increase the risk of inflation, the theory is that the Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole.

This team is theorised to act at key levels such as new lows (thus creating a technical double bottom) or at major round numbers. By doing this they force bears to cover and attempt to initiate fresh technical buying into the market place.

As well as the PPT, central bank intervention is another key factor to consider. This is where a central bank buys or sells its own currency in order to drive it to a level that is in accordance with its objectives. Central bank intervention can take place in currency markets when they get drastically out of line and threaten to affect local economic conditions.


Banks

Banks role in foreign exchange transactions is particularly interesting. Banks make a good deal of profit in the FX markets and one reason for this is the lack of a central clearing mechanism for FX transactions. A customer that trades with a bank must, for all intents and purposes, exit a position at the same house it was entered. As a result of this, the bank always knows which way the customer will go.

Since money must also be deposited in advance of taking a position and most customers leave just enough funds to cover the size of their positions, the bank is able to know which way the trader will go once it has used up its available margin funds. They can use this to their advantage in quoting a spread on a large transaction.

Niederhoffer gives an example in his book "Education of a Speculator": "Assume a customer with $10m on deposit, as a 5% margin against the value of foreign exchange, holds long positions of $200m. If the customer asks for a quote, the bank will know he has to sell dollars and will be inclined to quote a bid/asked spread that is biased to a low dollar bid".

Banks talk also to not only each other but they also have lines with all the biggest brokers and get to know the big traders and how they trade. According to Niederhoffer the big banks keep computer programs that indicate the likely direction of each trade and whether the customer is a trend follower, a pyramider or a stop-loss kind of trader. Monitoring its customers can give banks the same kind of edge that poker players stive to get by watching the other players to spot regular patterns in the way they play (do they play ever hand, do they always bluff, are they a weak hand that will fold if pressured etc)

They also have information that is detrimental to the public. They know where all the customers stops are. And can share this information freely with other banks in their network.

Dealers

Dealers usually make a profit on the bid/asked spread. This is their bread and butter. In some markets and with some firms the spread is so wide that the profit potential is huge. If you take a spreadbetting example, the spread on Euro Dollar in most spreadbet firms is 2 ticks. If I want to buy they can quote me 135.60 - 135.62. If I decide to be a buyer at 135.62 they can immediately go long the equal amount and capture the spread of 1 tick. If I do only a 1 lot (£7 per tick) then their commissions are £7 for a trade which is close to extortionate.

Savvy (and unethical) dealers can try to gain an advantageus position over their client by enquiring of the more naive ones whether they want to buy or sell before they offer the spread.

Also while we are on the subject of dealers that aid the order flow, it is worth noting that off exchange transactions can occur. For example, if you wanted to buy 5,000 lots in the FTSE future, you wouldn't hit market as you would take out every offer and get a terrible price. You would, in the most likely scenario, ring Liffe and have your bid matched up with another offer of equal or similar size so the market. This can create a volume spike on the chart.

Floor traders

Floor traders profits not only from the bid/asked spread but also as a direct result of the public's losses from slippage on their entries.

Floor traders are right at the centre of the action and can become more efficient at profiting in the game by such tactics as front running large orders that come onto the floor, running stops and quoting excessive spreads.

Prop traders

Prop traders, at least most of the ones I know, are looking to make regular profits in the market. They study the price action and what other locals are doing. They watch carefully to see where and how another trader of group of traders are accumulating (buying) where and how they are distributing (selling) and try to work out where they might need to puke (get out).

A very common technique for profiting that is used by prop traders is front running size on the bid or offer (watching carefully to see if its a spoof which is not a genuine bid or offer but one intended to give the impression of buying or selling).

A few traders at my firm made hundreds of thousands of pounds when they realised back in January that whilst all the US and European markets were going down, someone was coming in as a buyer in the Dax towards to close and holding it up. When they noticed this, they knew that it was going to be forced lower once the buying had dried up so they would sell it each day on the following open. It was later theorised that the buying came from Jerome Kerviel, the rogue trader of Societe Generale. When it came to light what was going on, the bank was forced to close out the huge long positions that Jerome had been accumulating over three days of trading beginning January 21, 2008, a period in which the market was experiencing a large drop in equity indices, and losses attributed are estimated at €4.9 billion. Of course, the traders that spotted it and knew he would be forced to puke, made a fortune very quickly.

Producers

Producers often have an intimate knowledge of their product and the conditions surrounding supply and demand. This knowledge is an advantage in dealing. However, one should not forget that producers often have to hedge their inventory and so have no choice whether they enter the market and in what direction. If a Wheat producer needs to hedge his stock or a country needs to tender 100,000 bushels of Wheat then that order will make its way into the market and price will be affected accordingly.

This is really just a brief summary and should just provide some food for thought.I highly recommend anyone read Victor Niederhoffers "Education of a Speculator". One chapter in particular deals with the players in the trading game and its called "The Ecology of Markets". It is a VERY fascinating read into the dynamics of the markets and how the players interact with each other to "eat" the public who are the lowest in the markets "food chain".

Now that makes me feel like 'dumb' money.

 

[Bladerunner]

2nd that ~

got to Puke out

not got a repppp"y pt left ~ Stops gone !

put em on the slate

Andy

 

[JTrader]

Thanks for the answers with regard to my question regarding pro's. Good answers there... So here goes the next question. Yesterday I posted a chart and said:



Someone commented that this is not necessarily the case. The instrument might matter a lot. So how does it? Are the people who trade the EUR/USD any different from those who trade the ES? Or those who trade the GBP/JPY? Isn't human psychology (which basically drives the markets) the same? Why would the instrument make a difference, or are their specifics to each market?

Those in favour and those against, let me hear your arguments

I believe that markets generally behave identically. They are driven by supply & demand, which causes support and resistance.

The reason why eyeballing charts of different instruments may give different pattern characteristics is due IMO to - liquidity. Maybe all instruments try to obey the same S/R rules, but with the liquidity (market depth, number of participants) differentials, an instrument like GBPJPY OR EVEN GBPUSD that have thin order books and shallow liquidity - leading to huge volatility, may be spikier on a chart than EURUSD - which has a much thicker order book and deep liquidity.
This can lead to an erratic looking chart at times, for the thin/shallow order book instruments - as gaps occur more often & easily - this is why their price moves much quicker.

But all in all i believe the psychology that market participants trade each instrument with is much the same - and it revolves around S/R. This is the foundations of trading behaviour & psychology, it is the tradition, it works because it is logical.
There is no other way that a market place can behave - rising/high demand = higher/high prices, falling/low demand = lower/low prices. Whether this is chocolate biscuits or gold bulllion.

Why would individual instruments be governed by different price behaviour, rules & methodologies???

What else is there besides S/R S&D that can drive a market???

 

[MrGecko]

Why would the instrument make a difference, or are their specifics to each market?

Those in favour and those against, let me hear your arguments

I'm half and half...

Yes, the instrument might make a difference (the GBPJPY example is a bad one IMO, but for technical reasons). A market of one product - say the ES - may be made up by a different proportion of participants (as outlined by TD above) than, say, the Z9 euribor contract... the mix of Prop traders / Hedge funds / G'ment etc / "public"... might not be the same across all products...

But... after sufficient study time on any price, it shouldn't make a difference. It is not important to know what the contract is, or what the make up of the market participants are: after enough time, one should be able to gain an "expertise" about said market from studying the price, be it Crude Oil or the going rate on an Ann Summers outfit. Given the necessary time to study, it shouldn't make a difference what the product is - you might not even need to know - but from experience I know it is not as easy to give up the Ann Summers contract, replace it with Crude, and understand the market and it's participants straight off the bat. Far from it, in fact.

NB: GBPJPY - I say this is a difficult example because of the way it will be dealt; I reckon most GBPJPY deals will go through as a USDJPY and a cable trade, both of which are very liquid + deep indeed. The choppy price will largely be due to the algo's combining the two exchange rates IMO, not necessarily due to the lack of depth or liquidity in the market.