In Price Action Trading Strategy

I was just about to close shop for the day and instead ended up having a conversation with a good friend of the site.  We discussed quite a few things that happened today, and most of them are highlighted on this chart.  I put this together for the mere means of trying to visually explain what we discussed, and thought it might be useful to others. I mentioned a few of these items on Twitter, but with 140 characters at my disposal at any point in time, further explanation is needed.  It mainly speaks for itself, but a few points:

-Dealers make money by: 1. their own speculative trading and 2. customer turnover

-Dealers dig zero inventories (flat exposure) when it comes to FX. You won't find them warehousing EUR/USD for a few weeks unless you're on the prop desk (or on a “strategic client hedging” plan, like some retail aggregators)

-There is always an intent to fill client offers and bids, and once they have it, it is off to someone else

This is the last post during the Thanksgiving break and will see you next week.  Enjoy:

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Showing 3 comments
  • MilesT

    Happy Thanksgiving Steve. Many thanks to you and the few others who truly go out of their way to help the little guy (account wise,LOL)!


  • Anonymous

    I like the new site Steve. I also sincerely appreciate what you do. I’m still trying to get the hang of how FX works and the site that you have put together is the only one that I have found that does seem 100% legit. It seems that your primary motivation is sincerely to help others understand this market, or at least to provide us the knowledge that can allow us to be successful participants.
    Thank you very much, and as politically incorrect as it might be to say: God bless and I hope that you and your family have a wonderful holiday. 

  • Antony

    With my little understanding I would say thats what FX is all about. Anyway, I am not able to grasp that in terms of ´direction prediction´. So more articles on this topic very welcome.


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EURUSD Forex Chart 15 Minutes