Saturday November 30, 2019 - 13:53:09 GMT
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Forex View: Trade With Odds on Your Side
In the good old days when bank traders ruled the forex market spec traders created the trends. This, in turn, forced real flows into the market, adding to momentum and accelerating the trend.
The trading world has changed so let’s skip ahead to modern times.
Real flows, such as capital flows (I.e. stock and bond related), central bank reserve management, sovereign wealth funds, etc. now dominate. These flows drive the price moves and spec traders tend to follow in the hope that it leads to some lasting momentum.
Add to this the demise of market makers (i.e. bank traders) and it leaves algos to provide liquidity. This is why you often see the forex market moves in spurts as the algos are programmed to back off when they sense a large order flow.
How often do you see a straight line move without a retracement that has you scratching your head looking for a catalyst?
Sometimes it is a news headline. Other times it comes out of the blue from a large buy or sell order. For example, take a time when a real order flow is executed that has trouble being absorbed in a market that relies on electronic platforms to execute in the absence of true market makers.
How can you use these insights to produce high probability trades?
One way is to get access to the Amazing Trader (AT)
AT identifies trading patterns that have a good chance of working out. This by itself puts the odds on your side and why we consider it to be high probability but there is more.
These patterns can suggest real flows going through the market. The ability to identify when real flows are being executed is like trading with inside information. It is an invaluable insight.
So if you get in a trade using an AT pattern that suggests a real flow, it should increase the probability of making money as there is “real” buying or selling to support your trade.
Think of it this way.
It is not just past statistics that say a strategy is high probability. Imagine trading with real flows on your side as they occur as that should increase the odds even more.
When you think of trading in this way it should make sense why we consider using the Amazing Trader in this way to be a “high probability” approach that works.
Amazing Trader and Common Sense Forex Trading
creator The Amazing Trader and Common Sense Forex Trading
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