ECN forex broker offering access to institutional liquidity and professional pricing for trading accounts of all sizes. Full Level 2 Market Depth order book . The order-book provided by Oanda is one of the most important tools to use in your trading of the forex market. It is the only tool to my knowledge which shows real time information about where large amounts of orders are located in the market along with where traders have placed their trades. OANDA Order Book. On the left shows all the open orders and you can see that there was a large cluster of blue, open sell orders right underneath the level. A lot of these orders will have been stops, and some will have been break-out orders. At this point, EUR/GBP was trading .
Guest PostIndicatorsTools. The following article is a guestpost by JB Marwood. JB Marwood is an experienced trader with a passion for financial analysis and trading systems. Yet, despite this, millions of forex traders approach the market in exactly the same way.
They all watch price action or use technical indicators; moving averages, MACD, RSI, trend lines, pivot points, support and resistance lines. By following these technical indicators and patterns, traders hope to find a trend and predict where the market will go next. But the problem with this approach is that it involves only one component of what really moves the Forex order book trading. It ignores fundamentals, ignores the news, ignores market sentiment and ignores any other market dynamic, Forex order book trading.
As a trader myself, I realize that technical indicators are useful. Admittedly, it is not easy to see inside of the market but there are two tools developed by OANDA that I like to keep an eye on, which might help you to make better trading decisions as well. The first tool I like to look at is the forex open positions ratios which is a summary of all open positions held by OANDA clients. This data shows the percentage of traders who are long a currency pair and the percentage who are short. What you will find when looking at this data is that there is normally a fairly healthy balance between longs and shorts.
However, when there has been a very strong move in one direction, the Forex order book trading position ratio can become extremely one-sided. This is not a short-term thing. Trades often need to be held for several days in order Forex order book trading give the ratios time to re-balance and for the market to experience a reversal. But this was simply because the Swiss National Bank had pegged the currency to the euro and everyone knew it.
So going against the market in this situation was not effective. Again, this is a really useful tool for looking inside the dynamics of the market, instead of just looking Forex order book trading price action alone. Together with the historical order book these charts show collections of buy and sell orders in the market. So these areas are likely to offer really strong Forex order book trading and resistance levels to take note of.
On the left shows all the open orders and you can see that there was a large cluster of blue, open sell orders right underneath the 0. A lot of these orders will have been stops, and some will have been break-out orders. So we know from looking at the order book that this 0. If the market stays above this level then we are probably going to stay higher and trade upwards. But once the market touches this level, we are going to see a lot of sell orders come in and overpower the buys.
That could easily lead to a strong downward move. So the following graphic shows the order book and the price chart, around 22 hours later.
The two tools described here are useful for picking reversals and finding strong support and resistance levels in the market. They require some skill to identify and they should not be used on their own, Forex order book trading. But every now and then, these tools show great insight and can help traders find an edge in their forex trading. Tradeciety does not have any affiliating relationship with Oanda.
OANDA Order Book. On the left shows all the open orders and you can see that there was a large cluster of blue, open sell orders right underneath the level. A lot of these orders will have been stops, and some will have been break-out orders. At this point, EUR/GBP was trading . ECN forex broker offering access to institutional liquidity and professional pricing for trading accounts of all sizes. Full Level 2 Market Depth order book . Order book forex trading Order book forex trading is one thing that I wish I had when I started trading years ago. An order book is a read out of every trade that is being made in a market. Some traders specialize in just trading the order book, they watch and see the orders come in, and they make trades based on what they see in the price action.