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US100 SHORT SKILLING:NASDAQ As shown on the weekly timeframe price went on to take out our inducement zone and mitigate the weekly bearish order block with long and impulsive candles, this weekly analysis concludes that for the next coming months we can maintain a bearish sentiment unless willing to trade pullbacks which will be bullish. Price will be on an overall bear trend for the next coming 3-6 months if fundamentals are on our side, BUT PRICE IS EXPECTED TO PRDUCE A CHOCH ENTRY SETUP IN THE NEXT 4-8 WEEKS(expect updates anytime) 1.possible levels for pullbacks will be: 14550 / 13573 / 12898 / 11735,price will likely bounce of from these levels before becoming bearish again. From these levels we can await bullish setups on lower timeframes (3/5/15/30/45 min and the 4h ) 2.Proper bearish setups will start to form now on lower time frames Expect entry updates any time from now.
SKILLING:US100Short
by jack_cheques
3
GOLD/ XAUUSD LONG/ BUY🔰 Pair Name : XAU/USD 🔰 Time Frame : 4HOUR 🔰 Scale Type : MID SCALE 🔰 Direction: BUY In our latest analysis, we have observed a significant market imbalance, indicating that Gold is poised to retrace and fill the imbalance area. Notably, a distinct order block has materialized on the daily chart. It is worth mentioning that institutional orders have entered the market, evident from the formation of a clear inverted head and shoulders pattern just above the Daily Buy order block. This price action coincides with the release of the Friday NFP news. Traders who may have missed the opportunity to enter the market at the order block can now exercise patience and monitor the 4-hour chart for a potential breakout above the neck line. Once the breakout occurs, it is advisable to wait for a retest of the breakout level before initiating a buy position. Our target price is set at the $1950 area, which corresponds to the location of the last unfilled imbalance. In our opinion should NOT be lower than 1912 area.
TVC:GOLDLong
by Moon_SmartMoney
Market Microstructure: An Extensive AnalysisI. Introduction Market microstructure, a specialized area within finance, explores the intricate mechanisms involved in trading within financial markets. It focuses on how trades occur, the interplay between prices and information, and how these interactions collectively shape market dynamics. Understanding market microstructure enables investors, traders, financial institutions, and regulatory bodies to comprehend the process of price formation, make informed trading decisions, design effective trading strategies, and develop sound financial regulations. II. Theoretical Foundations Three fundamental theories underpin market microstructure: The Efficient Market Hypothesis (EMH), the Random Walk Hypothesis, and the theory of Information Asymmetry. Each theory provides a unique perspective on the functioning of financial markets. Efficient Market Hypothesis (EMH): The EMH, introduced by Eugene Fama, posits that financial markets are "informationally efficient," with asset prices instantaneously reflecting all available information. According to the EMH, consistently outperforming the market is impossible without assuming additional risk, since every piece of information that could potentially affect the price of an asset is already factored into the current price. There are three forms of market efficiency according to the EMH: weak, semi-strong, and strong, each reflecting the extent of the efficiency. Random Walk Hypothesis: The Random Walk Hypothesis suggests that price changes in securities are independent and identically distributed, meaning that past movements or trends cannot predict future price movements. In essence, securities prices follow a 'random walk', making it futile to predict future prices based on historical data. Information Asymmetry: This theory points to the situation where one party has more or better information than another. In financial markets, information asymmetry creates a dynamic where informed traders (insiders) can potentially exploit their information advantage over uninformed traders, disrupting market efficiency. III. Role of Market Makers Market makers play a pivotal role in financial markets, facilitating transactions by constantly quoting bid (buy) and ask (sell) prices for financial instruments. Their constant presence in the markets helps maintain liquidity and market efficiency. Market makers are compensated for their services through the bid-ask spread - the difference between the bid price and the ask price. This spread represents the market maker's profit and compensates them for the risk they undertake in holding a particular security in their inventory, which might decrease in value. IV. Order Flow and Price Discovery Order flow, the process by which buy and sell orders are executed in the market, is integral to price discovery - the mechanism that determines the price of an asset in the marketplace. Analyzing order flow can provide valuable insights into trading activity and market sentiment. When a large order hits the market, it can significantly impact a security's price, creating price volatility. Understanding order flow is therefore essential for managing risk, providing liquidity, and effectively navigating the market. V. High-Frequency Trading (HFT) High-frequency trading (HFT) employs advanced algorithms to execute large volumes of trades in microseconds. HFT can improve market efficiency and liquidity by reducing bid-ask spreads, rapidly processing new information, and providing additional liquidity to the market. However, HFT also has potential drawbacks. Its speed can raise issues around fairness, with HFT firms potentially exploiting their speed advantage to the detriment of slower market participants. It may also increase market volatility and contribute to market instability, as evidenced by instances of 'flash crashes.' VI. The Impact of Information Flow Information plays a pivotal role in financial markets. Two categories of information that impact trading and investment decisions are public and private information. Public Information: This includes macroeconomic data, corporate earnings reports, policy changes, and other marketnews that are equally accessible to all market participants. When this information is released, markets adjust as participants process and respond to the new information, causing immediate and often significant price changes. Understanding the dynamics of how public information impacts price can provide traders with an edge in predicting and navigating market reactions. Private Information: This refers to non-public or unequally distributed information among market participants. Informed traders, who might have access to private information, can use it to their advantage, resulting in potential profits. However, this leads to information asymmetry, which can disrupt market efficiency and fairness as it creates an imbalance of knowledge among market participants. The impact of information flow on market prices is significant. Rapid adjustments to new information keep the markets efficient, but they also introduce volatility. Information asymmetry can lead to market distortions and manipulative practices like insider trading. Therefore, understanding the flow of information is key to comprehending market microstructure. VII. Market Microstructure Models Several market microstructure models have been developed to better understand the relationship between information asymmetry, price determination, and market participant interaction: The Sequential Trade Model: This model, also known as the "dealer model," posits a single dealer who trades with many customers. Dealers, who are assumed to be less informed than their customers, adjust their prices based on the order flow. For instance, an unexpected surge in buy orders would lead the dealer to infer that customers might have positive private information, and therefore, they increase the price to offset potential adverse selection risk. The Strategic Trade Model: This model focuses on traders who tactically time their trades to maximize their expected profit. They consider the potential impact of their trades on future prices and act accordingly. For instance, a trader with private information about a forthcoming price rise might initially trade smaller quantities to prevent any significant price impact that could reveal their information. The Market Making Model: In this model, multiple market makers compete for customer orders, and prices are determined based on this competitive dynamic. The market-making model allows for a more realistic market scenario where competition, rather than a single monopoly dealer, drives price adjustments. These models offer valuable insights into the complex process of trading and price formation in financial markets. VIII. Regulatory Implications Understanding market microstructure is crucial for financial market regulators. They must ensure that markets remain fair and efficient while also being conducive to innovation and competitive market making. With the growing complexity and speed of financial markets—especially with the rise of algorithmic and high-frequency trading—regulators face the challenge of managing the delicate balance between allowing market innovation and preventing practices that might lead to market instability or unfair advantages. IX. Future Directions As technology continues to transform financial markets, market microstructure's importance in comprehending these changes cannot be overstated. The rise of digital assets like cryptocurrencies, the growing use of machine learning and artificial intelligence in trading, and the proliferation of decentralized finance (DeFi) platforms all necessitate a deep understanding of market microstructure. New theoretical and empirical models will likely emerge to explain phenomena that are not well understood today, further deepening our understanding of market dynamics. Similarly, the regulatory landscape will continue to evolve in response to these changes, making the study of market microstructure crucial for informed policy-making. X. Conclusion Market microstructure is a crucial field in finance that examines the intricacies of trading in financial markets. Understanding how market makers function, the strategies of high-frequency traders, the impacts of information asymmetry, and how asset prices are formed is essential for participants across the financial landscape. As technological advancements continue to transform the financial industry, insights offered by market microstructure will be of vital importance in navigating these changes. The field will continue to grow in relevance, contributing to more efficient, fair, and resilient financial markets. I hope that you find this information valuable, if you have any questions feel free to drop them in the comments. Enjoy!
BITSTAMP:BTCUSDEducation
by BiggWigg
4 forex break of structure OB ideas for todayHi, I prepared 4 high RR positions for today, applying my order block principles and All my knowledge I gathered the last 6 months. I am not a professional, trade at your own risk, do your own research. Order block principles: 1) OB must take liquidity or have the liquidity to take. 2) OB breaks something significant 3) OB is relevant to current price action 4) OB caused imbalance (made a fair value gap) 5) OB has a liquidity pool to target Peter
Short
by peti199
ES/NQ Weekly Analisys Weekly Analysis June 20 - June 23, 2023 During the previous week, NQ entered the zone of the daily Order Block (OB) and came close to testing the Mean threshold of that OB. It also entered the Monthly BB-. Therefore, this week, I anticipate a retracement to the 4-hour OB level between 15188.00 and 15094. For an ideal scenario, I would like to see a bounce from the range of 15186.75 to 15142.50, targeting the Mean Threshold of the Daily OB at 15534.00. It's also worth monitoring the Critical Level of the Monthly Break Block at 15722.75, although it may not be reached this week. To recap the structure: Consolidation, followed by Expansion, and then a Retracement before the Order Block and resumption of movement. Alternatively, it could be Consolidation, Expansion, and then a Reversal. Hence, my retracement level before the Order Block is set at 15186.75. Inside that zone, there are 15-minute BB+, as well as 15-minute FVG and 1-hour FVG. If the retracement fails to hold at the OB level, we should anticipate a reversal phase where it breaks 15066 and drops further, ideally reaching the Daily SIBI level between 14963 and 14866.75. The same analysis applies to ES: ES also entered the zone of the Daily OB (4615.00-4486.25), which aligns with the Monthly BB-. Remembering the structure: Consolidation, Expansion, and then a Retracement before the Order Block and resumption of movement. Alternatively, it could be Consolidation, Expansion, and then a Reversal. For ES, my retracement level is set at 4431.75 to 4423.25. The 4-hour OB is located at 4419 to 4404.50, with 15-minute FVG and BB+ within this range as well. If the 4-hour OB fails to hold, we can expect a Reversal Phase, leading to a test of the SSL at 4393.75. The Daily SIBI is found at 4381.75 to 4369.50. However, a bounce from the Retracement Area should fill the Weekly SIBI at 4506.25. Additionally, there is a Daily Breakaway Gap to consider. Key levels to watch are 4524.00 and 4531.25, which correspond to the Mean Threshold of the Daily OB.
CME_MINI:NQU2023
by LumiTraders