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Paul&Paul
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EURUSD - closed with a tone up

Postby Paul&Paul » Sun Apr 22, 2012 8:04 pm

EURUSD closed with a tone up and for a correction we need some time, it will not come immediately.
The bounce off was initiated at a cotarget 1.3056, leaving behind two UPOs from April 16, one at 1.3045 and another one at 1.3027.
The current energy responsible for a runaway from those UPOs is located in the trigger marked below on the left.
Its 5.8664 expansion is at 1.3218 and this what we saw late Friday.
This border is clearly seen together with a semafor3 painted.
Attachments
eurusd22.04.gif
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Paul&Paul
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EURUSD

Postby Paul&Paul » Sun Apr 22, 2012 8:16 pm

EURUSD.
There are new UPOs at
1.3195
and
1.3168.
Some shorts are hiding near 1.3230. EURUSD is not far from their shelter.
Heavier selling took place near 1.3342.
9.1299 of the said trigger up gives 1.3320.
Attachments
eurusd22.04x.gif
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poddinee
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Postby poddinee » Tue Apr 24, 2012 10:19 am

To trade in the Forex Market professionally do you need to be registered with the NFA? I have different sources tell me yes and no. I know a lot of new bylaws have been passed to govern the Forex market and the people who trade in it. But for the ordinary person that trades for forex for friends and family do you need to be registered? Are IB and Money Managers the same thing?
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Paul&Paul
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The arrival of high frequency traders (HFTs) changed

Postby Paul&Paul » Tue Apr 24, 2012 8:37 pm

markets. It is documented that HFT accounts for more than 70% of trading volume in the UK&US equity markets.
About 80% of this trading is concentrated in 20% of the most liquid and popular stocks, commodities and currencies.
The increased share of high frequency traders has not been accompanied
by an increase in absolute volume.
Many HFT firms are in the business of liquidity provision, acting as market makers to position takers. Liquidity provision is a complex process, as position takers may know more about the future direction of prices than do market makers.
Detailed analysis of the HFT's strategies reveals that 80% of its trades
were passive, that is its price quote was consumed by others.
HFTs earn on average twice more on spread than lose (!) on position.

Paul&Paul
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HFTs are small in number but together with

Postby Paul&Paul » Tue Apr 24, 2012 8:49 pm

intermediaries they are responsible for a disproportionate part of trading volume. We should not be misled by that small number of HFT entities.
There is a view that HFTs and Intermediaries generally provide liquidity while Fundamental Traders generally take liquidity.
However, sometimes the aggressiveness ratio of HFT can be higher than what a conventional definition of passive liquidity provision would predict.

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Paul&Paul
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It is important to know that HFTs tend to end each session

Postby Paul&Paul » Tue Apr 24, 2012 9:06 pm

with a zero net position. They start with a zero net position as well.
It follows that throughout a session their liquidity provision changes dynamically and also that sometimes they will not trade at all. They impact the market not only by the way they provide liquidity but also by refraining from such provision or by sudden increasing the aggressiveness ratio much above levels for a passive maker and also by taking liquidity from the market.

Markets are different now than they were ten or twenty years ago. I would
say they looked more classical in the Dow sense then.

Some studies are devoted to very dramatic events like the flash crash from May 6 of 2010.

Paul&Paul
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What does provision of liquidity mean

Postby Paul&Paul » Tue Apr 24, 2012 9:23 pm

for the market?
It is more difficult to initiate a local trend with an HFT than without it. A lot more depends not on smaller market participants but on big names. The bigger the better.
Trending may become unpredictable and wierd. Volatility may decrease.
Daily patterns may be distorted. Strategies based on opens/closes by days
may be fruitless...
Do we really need this big liquidity provision at all?
I mean who needs it more, investors or those high-tech market makers and trading houses?

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GBPUSD illustrates the above mentioned problems

Postby Paul&Paul » Tue Apr 24, 2012 9:32 pm

quite well.
Look at the chart below.
What GBPUSD has been doing for 14 hours today above and below 5.8664?
Why almost every half an hour we see a contrarian change?

GBPUSD returned to just one UPO @ 1.6080 and went higher.
I had to go back to last year (August) to find the nearest UPO from the upside.
This what I found:
1.6315
1.6335.
Also from the past crucial was 1.6117.
Attachments
gbpusd24.04.gif
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Paul&Paul
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Current developments on USDPLN

Postby Paul&Paul » Tue Apr 24, 2012 10:06 pm

are below in the attached chart.
3.2150 absolutely crucial resistance near term.
USDPLN nears a UPO @ 3.1721.

USDPLN is bound to return to 3.2011 and 3.1721, the nearest UPOs at the moment.
Attachments
usdpln25.04.gif
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Paul&Paul
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USDCHF

Postby Paul&Paul » Tue Apr 24, 2012 10:30 pm

USDCHF.
Major UPOs are marked in red.
USDCHF returned to 9092.
One
two
three.
Three semafors3 make a triangle.
Attachments
usdchf25.04.gif
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