Bullish Or Bearish

[TinGull]

	Quote:	TheBramble
	Traders trade because markets move. The more a market moves, the more traders trade.

What she's saying here, I believe, is that markets themselves do not move unless traders trade. If there were no traders at all...just one day everyone said let's boycot trading...then the markets would not move. Markets don't move themselves, traders move the markets. When traders come in large numbers, that'll bring more in and move it even faster.

So the above statement is somewhat false, but I see what you mean. Traders will trade because a market is moving, but the market is moving because traders are actually trading. Without the trades, the market would stand still.

[TheBramble]

Nope. The markets not only would and could move without traders. The markets DO move without traders. That's what Market Makers do for a living - they entice traders to trade by moving the market.

[PYenner]

It is strange reality that both an argument and its counter-argument can be equally true, you just have to look at each argument from its own perspective.

It remains that only trading will shift prices.
The other aspect is, to what extent do prices honestly represent market sentiment and to what extent does price manipulation by the big money misrepresent market sentiment?

In Forex RSB, the Royal Scottish Bank, has been the most successful trader among the big boys, imo they have monopoly control of prices and can and do misrepresent market sentiment to their advantage. That is how they got to be winners and it is how they stay winners, by staying in control of the prices we rely on for interpreting market sentiment.

Following their "smart money" seems the logical analytical method to me.
So now there is a third argument that splits market forces into leaders and followers, getting one step ahead of the leaders is my goal. Following the followers seems futile to me, like walking into a sucker trap.

Is it logical or merely cynical to follow the "smart money" rather than the price/market?

[walterw]

	Quote:	PYenner
	It is strange reality that both an argument and its counter-argument can be equally true, you just have to look at each argument from its own perspective. It remains that only trading will shift prices. The other aspect is, to what extent do prices honestly represent market sentiment and to what extent does price manipulation by the big money misrepresent market sentiment? In Forex RSB, the Royal Scottish Bank, has been the most successful trader among the big boys, imo they have monopoly control of prices and can and do misrepresent market sentiment to their advantage. That is how they got to be winners and it is how they stay winners, by staying in control of the prices we rely on for interpreting market sentiment. Following their "smart money" seems the logical analytical method to me. So now there is a third argument that splits market forces into leaders and followers, getting one step ahead of the leaders is my goal. Following the followers seems futile to me, like walking into a sucker trap. Is it logical or merely cynical to follow the "smart money" rather than the price/market?

Very interesting quote about Royal Scottish Bank (thats new to me), my question Pyenner is how can I follow them ? how can I know what are they doing (buying/selling).... would apreciatte that information.... cheers Walter.

[PYenner]

WalterW

Find your input on many threads to be solid and constructive, thanks for the work.

RSB is worth a good long Google, much is out of date but still informative.
RSB London has been #1 forex trader since way back.
Net profit flow is from all other international banks into RSB London.
Used to be lots of Sirs on the board.

I can only offer input on spot forex which has the advantage of having 10 pairs within the majors. Essentially 8 must be monitored to understand the state of play in the 2 RSB sucker trap pairs. Unfortunately it gets complicated before it begins to get simple, I suspect from your motto that you already know that.

I looked at the VSA thread but while I have not used that indicator, it appears to rely on transient volumes which to me seem to be frequently misleading. Such moves often appear to get dissipated to no obvious gain shortly afterwards so I suspect they may be just more manipulated signals.

I follow the longer trends in the prices relative to each other, not in absolute prices. Trends in the 8 "arm and leg" pairs tell me what the bank is doing.
Often it provides no more information than to tell me where prices are within the swing ranges of the two sucker trap pairs and the only trade available is to wait for a bigger movement then trade back towards centre of the range.

Sometimes a recognizable pattern shows up that can be traded longer term or with at least some awareness of the longer trend when scalping swings.

There are some whole new ways of thinking involved, one is about the mechanics of forex trading at bank level, that is the bank's weakness, its actions are visible for the most part. It counters that by building years of trading expertise and tactics into the trading software, they know how traders think and stay one step ahead of them. Even when you know the long term trend you still have to think tactically, their tactics aim at burning both bulls and bears, that can mean 100-300 pips in drawdown but a nice bonus swing trade if you have been undertrading with that opportunity in mind.

The four Franc pairs are the easiest place to start, you will find a one to one relationship.
Two pairs apply only to GBPJPY, two apply only to EURUSD. After that it gets more complicated. This is not the place, nor is it yet the time no get into it.
Nor do I have the time or ability to answer questions from what might become a feeding frenzy. Sufficient thought will be rewarding I believe.

If a Franc based account makes a buy in GBPJPY, it shows up as a pip movement and volume one in GBPJPY and also in GBPCHF (crudely). Footprints are left that can be followed. Only banks trade Francs

When you are dealing with a con, ignore the words, the suit and the haircut, keep your eyes on what the hands and legs are doing under the table.
What they do is what they are, what they look like is not what they are.

[TheBramble]

	Quote:	PYenner
	It is strange reality that both an argument and its counter-argument can be equally true, you just have to look at each argument from its own perspective.

From an academic perspective, yes, you can objectively consider both side of any argumant. But in trading, you can't make any profits taking both views.

	Quote:	PYenner
	It remains that only trading will shift prices.

Untrue. Trading (volume) does move prices. But so too do Market-Makers and Specialists - without 'active' (volume-based) trading.

	Quote:	PYenner
	The other aspect is, to what extent do prices honestly represent market sentiment and to what extent does price manipulation by the big money misrepresent market sentiment?

Immaterial. Who cares about sentiment and representation? It's what IS happening and what is most likely to happen that's important. Not a subjective or even roughly objective view of why what is, is.

	Quote:	PYenner
	Following their "smart money" seems the logical analytical method to me. So now there is a third argument that splits market forces into leaders and followers, getting one step ahead of the leaders is my goal. Following the followers seems futile to me, like walking into a sucker trap. Is it logical or merely cynical to follow the "smart money" rather than the price/market?

One step ahead of the leaders? How can you be one step ahead of the leaders? They are, by definition, ahead of everyone else - hence, leaders.

Following the leaders is absolutely the name of the game. Not cynical at all - just plain smart. It of course makes you a follower, but don't deride that status. So few are really followers. They are miles behind and are affectionately knows as stragglers or 'The Public'. There are enough of them to make it worthwhile for us Traders.

[PYenner]

TheBramble

I like the way you think, like a hunter
We are actually in agreement on most points.
The leaders are driven by a profit motive, understanding where and how they make their profit is the key to predicting their moves.
They are traders too, they follow profit/risk rules.
They are potentially predictable and exploitable just as "the public" are, because they follow trading rules.