What are the Market Makers thinking?

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es/pip
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Postby es/pip » Sun Mar 21, 2010 11:29 pm

newschool wrote:thats a gap being closed, its a different situation ;)

you quoted exactly what I said, that in that M5 chart, I dont believe the s&r are important

well if I think about it, we can have 2 definitions :

- a s&r in its purest form is a level where price bounces

- and theres also a fundamental s&r , wich is linked to the value of the asset. if you pay 5$ for a burger, you wont pay more unless it tastes really better, if theres a real difference. in that case we have a fundamental resistance...


"thats a gap being closed, its a different situation ;)"

no, the gap was already filled---- then you had momentum down which created a resistance point. Then the market came back to it and then went down----- just by looking left to trade right :wink:



"if you pay 5$ for a burger, you wont pay more unless it tastes really better, if theres a real difference. in that case we have a fundamental resistance...[/quote]"

if all of a sudden people started paying more for the burgers and the price rose to $7, and then sales started dropping off so they lowered the price back to 5 ( and people started buying them again) and then rose them again------ would that be based on fundamentals or s/r and supply/demand?
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Humble
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Postby Humble » Mon Mar 22, 2010 2:00 am

newschool wrote: ahah another difference, I always liked volume heheh


Then there is no point in trading FX, as regardless of what volume stats. you get, it can not be as reliable as you get with shares traded on a single/central market exchange.

It's seems to me that the activity of market makers can be seen through S/R and volume, the two things they can not hide.
Is price closing higher or lower than something? Simple yet powerful question. ..MO

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Postby Braathen » Mon Mar 22, 2010 11:41 am

Theres a good chance im totaly wrong here and i dont
have the knowledge on all this u guys are talking
about stocks and whatnot.. but..
i use both trendlines and s&r... but as i see it the
s&r builds the trendline.. i mean s&r forms a ladder going in a direction witch makes a trendline.. infact.. i dont see how i would draw trendlines/channels without s&r..
Thats just how i veiw it.. feel free to flame meh
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bredin
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Postby bredin » Mon Mar 22, 2010 12:01 pm

I view trend as "Price traveling between Supply and Demand" If price has left Supply trend must be down and vice versa..

Am I crazy?

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newschool
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Postby newschool » Mon Mar 22, 2010 2:46 pm

es/pip wrote:no, the gap was already filled---- then you had momentum down which created a resistance point. Then the market came back to it and then went down----- just by looking left to trade right :wink:


are you referring to the previous 11h45 and 12h25 prices?

es/pip wrote:if all of a sudden people started paying more for the burgers and the price rose to $7, and then sales started dropping off so they lowered the price back to 5 ( and people started buying them again) and then rose them again------ would that be based on fundamentals or s/r and supply/demand?


The 5$ is in that case a support, because its implied that it was there for looong. You always paid 5$ for that burger. Its not a price that changes in a M5 chart ;)
I say that the 7$ will not be a resistance, because its not linked to any event, its only buy/sell.

On the other hand if the company changed owner, and the new owner priced it at 7$, then yes it would be a fundamental resistance.

You know thats what technical analysis is supposed to be about, linking how people think (or feel) to cold numbers and stats.

But do you agree on my 2 definitions of s&r ?
Last edited by newschool on Mon Mar 22, 2010 2:54 pm, edited 1 time in total.

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newschool
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Postby newschool » Mon Mar 22, 2010 2:47 pm

Humble wrote:Then there is no point in trading FX, as regardless of what volume stats. you get, it can not be as reliable as you get with shares traded on a single/central market exchange.


Well I can say that in many case it helped me grasp the direction of the market. I use the better volume indicator wich is just easier to read.

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Postby Brookmyre » Mon Mar 22, 2010 9:12 pm

TheRumpledOne wrote:http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know.html

Check it out.


Thats a great thread. I haven't been back to BP since I found Kreslik, and I have to say TRO, I think it shows a great deal of character to get abused and banned from a site and yet still crosspost a thread simply because the information is of value to those here. My hat off to you sir! :)
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Postby es/pip » Mon Mar 22, 2010 10:56 pm

newschool wrote:
es/pip wrote:no, the gap was already filled---- then you had momentum down which created a resistance point. Then the market came back to it and then went down----- just by looking left to trade right :wink:


are you referring to the previous 11h45 and 12h25 prices?

es/pip wrote:if all of a sudden people started paying more for the burgers and the price rose to $7, and then sales started dropping off so they lowered the price back to 5 ( and people started buying them again) and then rose them again------ would that be based on fundamentals or s/r and supply/demand?


The 5$ is in that case a support, because its implied that it was there for looong. You always paid 5$ for that burger. Its not a price that changes in a M5 chart ;)
I say that the 7$ will not be a resistance, because its not linked to any event, its only buy/sell.

On the other hand if the company changed owner, and the new owner priced it at 7$, then yes it would be a fundamental resistance.

You know thats what technical analysis is supposed to be about, linking how people think (or feel) to cold numbers and stats.

But do you agree on my 2 definitions of s&r ?



lol

i am going to respond to this

can someone explain to me how to do multiple quotes like is done above

yes i am a bit slow sometimes :D
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Postby Brookmyre » Mon Mar 22, 2010 11:51 pm

es/pip

When you hit reply or quote to bring up the window to allow you to type, there are some tools there to italicise, bold etc. There is a quote tool amongst them which adds the appropriate html.
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es/pip
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Postby es/pip » Tue Mar 23, 2010 12:37 am

[/quote]
are you referring to the previous 11h45 and 12h25 prices?


i am referring to where i have the chart marked with the line and arrow down

The 5$ is in that case a support, because its implied that it was there for looong. You always paid 5$ for that burger. Its not a price that changes in a M5 chart ;)



whether it has been there for a long or time or a m5 chart it is still s/r. once supply over takes demand and a pivot is put in, that is a fact and cannot be changed. At that point in time more sellers were in the market vrs buyers and the price stopped at that exact tick and couldnt go any higher. as long as that place/ point in time holds as a pivot then it is s/r.

I say that the 7$ will not be a resistance, because its not linked to any event, its only buy/sell.


but it is linked to an event, that was the most anyone would pay for it so you had to lower the price

On the other hand if the company changed owner, and the new owner priced it at 7$, then yes it would be a fundamental resistance.


if he had to lower the price because no one was buying then that would be the reason it is resistance, not that he just arbitrarily set it there. What if the new owner priced it at $6 and everyone was buying so he raised it to $7. Would it be support via fundamentals? Or support via S/R and S/D because he rose the base price because he could--- bec people were willing to pay more for it?


But do you agree on my 2 definitions of s&r ?


lol--- i am going to have to go back and read them again

i am not sure what the "common" definition of it is. My definition is-------- at any given point in time at a given price, if demand overcomes supply and forms a pivot then that is support. vice vrsa for resistance

You know thats what technical analysis is supposed to be about, linking how people think (or feel) to cold numbers and stats.



why not how they think or feel about price at a given time?

Are the floor traders trading s/r via fundamentals?

How about the floor trader scalpers that are turning 500 RT's a day on the ES, do they consider a S/R point only valid if it was created by fundamentals of the SP500?

How can a fundamental create S/R in the first place?
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