Thursday, January 22, 2015

The pulse of the FX market (TIC) and (PA)

TIC as one of the inputs for a go-no-go trade. (GNG)

Internal or external that is the question....

Let me preface by saying that there are two (2) types of data source available to you in real-time from your booker/broker.

1. Internal data is from customer actions within the bookers systems.*

2. External data comes from liquidity providers and the market itself.

Note: I do not use internal data for ANY real-time trading decisions.

Remember there's VERY little external information available to the trader from a booker/broker.  Price Action (PA) and TIC and that rounds out the short list!  
So let's look at TIC and how I use it to assist in opening and closing a trade. My history with TIC goes back a while as it was used with metals in the early days of my trading.  My goal is to use common external data as it's available from 99% of bookers/brokers for the EUR/USD pair to trade with.

I've developed a checklist with thresholds for various indicators and price actions, patterns and TIC levels for trading the EUR/USD. I often think of TIC like a blood pressure indicator of what's going on under the hood.  PA does not necessarily go hand in hand with TIC, thus the benefit of the indicator. So if the London morning lift off is imminent one should see a pattern in TIC to assist you in making a GNG decision.  The reverse is true in that the trade is coming to the end of its move then tic TIC pattern should again show its colors to close. 

My Checklist is a proprietary mish mash of things, most of which are not technical or scientific in nature. But rather a distilled set of criteria to Go-No-Go the trade. (No checklist data is derived from proprietary data sources.)

*FX internal data indicators such as Trade Volume and Short and Long Volume etc. is nothing more than a distraction for the GNG process. I have yet to find value in these home grown indicators.

In summary I find TIC to be very helpful in the GNG formula for session trading. 

You can find more here: @BuggyPilot