Reading ticks
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Thread: Reading ticks

  1. #1
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    Reading ticks

    Hi traders.

    Money on the market is made not by trading, but by watching and «reading». These words belong to Jesse Livermore as far as I concern. But famous trader was talking about «order flow» - on stock market traders “read the tape” – they watch how “bids” and “asks” are executed. Before we continue, let’s remember that cornerstone of price action is liquidity.

    Liquidity is located above and below current price. Sellers’ liquidity is represented with sell limit orders, buyers’ – with buy limit orders. Liquidity of buyers can be called floor of the market, liquidity of sellers – ceiling. On the picture below floor is equal to 100 lots, ceiling to 50 lots:

    liquidity.png

    To make price go 5 ticks higher, market has to break the ceiling – to consume liquidity located at the upside, in other words – to buy 50 lots. To force price to go down, it’s necessary to break the floor – to bring market order with size of 100 lots.

    Big market participants have bigger sizes of positions. Of course, they want to be unrecognized and anonymous, so they prefer to act slowly and split their big position onto several parts. But sometimes they have to act more quickly and to execute market orders with bigger volume.
    Now, let’s imagine we are observing tick chart. If we see small tick, then probably it’s average market participant. But if we see large tick when price immediately goes 4-5 pips higher (or lower), it may be a sign of big market participant involved.

    ticks.png

    Of course, we don’t know how many lots (how much liquidity) were resting above and below the market – this information is available only to interbank dealers. But more often than not, large tick is an indication of large market participant involved.

    What we can do with this information?

    First, if we see rising trend (or falling trend), we may watch – does this trend contain large ticks (in the direction of the trend)? If answer is «yes», we may expect this trend to continue after some consolidation or pullback.
    Then, if market is going down, we may see – does this price action have large ticks to the opposite direction? If answer is positive, it also can be a sign of buyer that is stepping in this market. We also can see large ticks in the counter-trend direction, but it is usually sign of liquidation not accumulation. To join new wave of a trend, we want to see accumulation rather than liquidation.
    Such «tick analysis» requires a lot of patience but it can give trader important clue of what’s happening in the marketplace and provide edge.

    Good luck and trade responsibly!

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  2. #2
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    [lang=ar]Already good reading of the chart is that it is possible to help the formation of high profits in South Forex By reading good chart and use a good strategy for trading in the forex market is possible to help you achieve high profits in the forex market and help you succeed in trading in the forex market[/lang]

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  3. #3
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    What exactly you mena by tick chart wheter it is a means to predict the movement of currecny pairs traded are we going properly ot just old predictions that are not so mean and just a review course beg explanation becuase i was alos very requires some knowledge of which is important in forex trading so that i can truly maximize your trading.

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  4. #4
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    This was really good explanation made from your end and am sorry for asking this question because may be i did not get the point right. If the tick is larger and we are in the up trend this indicates long term up trend and if the tick is larger in case of downtrend then also it indicates the uptrend ? Kindly clarify this. I have not made the tick analysis so far but this seems really interesting and i would like to know more about this.

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  5. #5
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    yes money on the forex market is made by watching and reading traders action and then finding a synchronizing point of which you are going to swim whith the rest of the majority traders and the best and the easiest way of interpreting these traders action is by looking at the price charts and judging from the patterns formed by them

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  6. #6
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    it's very possible my friend, we could make a fortune with forex trading, but one friend, all of it must be the process, a time that will make us become millionaires, because there is no business in this world which is fast and instant, all proceeds, we just wait or not to run the forex trading business.

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  7. #7
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    The idea is good and very effective. I am trying to understand it properly and thus I have copied it in my "learning tools" so that I can study it elaborately at the leisure period. This is very effective topics to me through which I came to know many new aspects which I did not know earlier. Through this thread I came to know about it and I want to express my heartiest thanks to the thread starter through this reply.

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  8. #8
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    I've been success for a while with this kind of reading but I never try again, but I think i will do this again for longer trade. For scalping style it is very good to use ticks when we want to enter trade and make fast profit and don't let our trade open longer after some profit.

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  9. #9
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    Well, what I can say is that nothing will change the nature of the way the business work, it will affect traders more when they do trade against this nature, the flow of the order is the align way that the market is created, there is nothing better than this. Nothing gives traders more power than the knowledge of the prevailing tick side, if you know the overall direction, you have known it all, most especially the tick.

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  10. #10
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    Precisely what an individual mena simply by break information wheter it is just a means to estimate your motion associated with currecny frames exchanged usually are we planning correctly ot simply outdated prophecy which can be not too necessarily mean and just an overview program plead reason becuase we has been alos very requires many expertise in and that is significant within fx trading to ensure i can genuinely maximize your investing.

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