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Someone asked me a question and wanted to know how I define the terms order flow, liquidity, and inefficiency. Order Flow I define order flow as being transaction flow.  You want orders to be entered and executed.  This can come in the form of a market order hitting standing limit orders.  Or it can come …

As I look back at my journey to become a trader It eventually occurred to me that a good portion of it was about being prepared to make the necessary sacrifices. The most successful traders have sacrificed a lot of time in their early years so that they can have more money than their neighbors …

A large part and critically component of a successful trader is building up enough conviction and flexibility in ones trading signals. You have to have a system or systems for generating your own trading signals  for a variety of reasons.  Then you need to have the conviction to actually place the trade when the variables …

Dave commented on one of my blog posts entitled Random Market and Order Flow Thoughts. Dave asked: Dave asked a very good question.  Here is my response. Warren Buffett is a long term investor.  Everyone requires order flow to validate their analysis and investments.  Most people don’t consider themselves order flow traders.  Buffett certainly doesn’t. …

There is a broker that is currently offering to pay clients if they execute a limit order instead of a market order.  They are an ECN so they just pass on the bank liquidity to their customers and do not mark up the spread like other non-commission and non-ECN brokers do.  The commissions for an executed order …

Originally posted at forexfactory on August 9, 2011: Thank You for your response Mr Breakout. Na, I am not talking about fundamental analysis. I am not going to try to defend that. If everything is reflected in the price, then I assume that some statistical edge can be found analyzing the USD/JPY prices of the …

All sorts of people spend years of their lives never building any solid foundation for future trading success.  You hear about the trading horror stories of how some people have tried to succeed in trading for the past five or ten years but failed.  Such stories litter the trading forums. My guess is that of …

Here are some of my random thoughts about markets and trading: Bottom fishing is one of the most dangerous games you can play.  It can be very dangerous if you lack knowledge about order flow, liquidity, news, sentiment, and global macro.  Both traders and investors can fall victim to it. The investor believes that a …

Originally posted at forexfactory on August 9, 2011 If everything you need to know is already reflected in the price, then how do you explain news releases affecting the market? Back on August 3, USD/JPY was trading at 77.10 at 9pm EST. One minute later it was trading at 77.50. Looks like price was missing …