Balance, the key to success! (The Equilibrium, a key to success!)

Welcome to our blog:





70% of the course takes place in Equilibrium, hence the title: Equilibrium, the Key to Success. I warmly welcome you to our neighborhood and I'm glad you're interested in this information.

I started my apprenticeship in financial services in banking, equity and investment funds 30 years ago. After Forex charting, I first experienced MT4 on Windows XP in 2006, when it still had to be paid. Since 2010 I have focused almost exclusively on the Forex market and, following ESMA regulation, I registered as a professional trader. I am one of the 4% of professional Forex traders in Europe who can trade up to $400 using leverage while being extremely protected in the event of an uncontrolled breakout. Initially, I specialized in FX data (supply and demand) for many years, trading short-term swings within the equilibrium range. Tick ​​charts are the reason I looked more closely at stock market data and found that the data had a similar structure. This has resulted in a number of projects over the past year. I compared different stock market data providers, closer to HFT/big players, and looked for suitable software that could convert stock market data according to my specifications. Today I trade almost entirely using stock exchange data information on the Forex market.

You will find many good auxiliary indicators for MT4 here, some of which I developed and programmed myself. You will also receive specific information on footprint charts, volume charts, market overview, DOM, and time and sales lists. If you want to achieve long-term success in this market, you must carefully study how large businesses operate. Price does not change because a moving average crosses, the RSI becomes overbought, or the Fibozone is reached, but rather because a market order meets a limit order. The big players determine the market and they pursue a goal. This can only be achieved if one knows what they are doing.

I have been following stock market data for two years, so buying and selling volume, especially liquidity, has become my focus. Pure candlestick or price information gives us traders a false picture of the market, as strong bullish candlesticks do not necessarily mean that someone is buying euros to push the price higher. A strong bullish candle may also appear once the big players sell off the USD following a downtrend. However, this cannot be seen from pure candle representation in Forex.

Many years ago I thought that by using pure candlestick charts I would be able to identify trend and resistance areas. Through precise analysis of futures data using my prop software, I came to the conclusion that there was actually no trend and no real resistance zone. The resistance areas we see are initiated by big players to deceive us, and the so-called trends are meant to mislead selling funds.

However, this was a development process over 2 years, which you can read about in this blog. Two years ago I started writing a Trader's Diary on this forum, asking for an accurate record of my further development. In this blog you will not find a specific system, but rather many ideas with which you can create a personalized setup for yourself. Beyond that, I accurately described what FX data has in common with futures data. A key point is how big companies operate. They alone determine the market and you will understand why they will always find your stop.

This blog is structured like a chronological book and touches on topics such as supply and demand, equilibrium trading, and futures market data. I'm sure you can use some ideas, but I recommend reading this blog from the beginning. While it takes about 20 hours, you discover one key idea that could change everything

Within these topics, 10 projects have been created so far



1. Supply and demand trends







3. Dashboard – help with daily transactions







5. Tickchart-The Lot, the only reason for price changes



We are currently developing our tenth and most complex project. It combines the advantages of the futures market with those of the interbank market.

Respect, decency, and mutual fairness are the foundation of this blog. This is something we can all be proud of, and I believe that with these virtues we can achieve the success we all want. The market changes every day, and those who stop developing in this industry will soon be overwhelmed by the market. Further development with like-minded people is my sole purpose for writing this blog.



Best regards Michael





I have been a fan of Forex Factory for a few years now and am always excited about their great contributions. Interesting ideas, charts and indicators should help support private traders. In this shark tank, the foreign exchange market is volatile. It's difficult for beginners. Think about football. If you want to learn football, you can start with the youth team and then play in the NFL.
In the Forex market, there is no market for beginners because beginners are pitted against the biggest professionals in the world. As for the ending, everyone can imagine.

Well, what if there was a platform like Forex Factory where traders from all over the world come together to face the biggest traders in the world. Of course, every trader is a competitor of each other, but you will help each other.
When trading, there are many keys to success. In my first article, I want to show you the keys to success. I don't want to talk to you about the significance or nonsense of this key, but about successful implementation. If this post is of any use to you, please use the information, otherwise forget about it again.
I'm not saying this key is a master key that will work forever.
This key works without indicators for all traders of all time units (only those who want to do so of course).

The key "balance"

1. Prices are determined by supply and demand in each market.
2. Any impact on the price will be refunded from the price
3. Before prices rise or fall, a balance occurs between supply and demand.
4. If this equilibrium is disturbed, prices will move in the direction of supply or demand.
5. Price changes as supply or demand changes until equilibrium is reached again. Then the whole thing has to start from scratch.

Most candles are in balance. We don't want to trade there because the price doesn't move much. So when there is an imbalance we have to take action.

There are 3 different statuses on the market.

1. Quotation exceeds demand = price falls
2. Demand exceeds supply = price rises
3. The balance between supply and demand occurs based on the seller's quote (short position), while the buyer represents the demand (long position).

1. Quotation = seller (short position)
2. Request = Buyer (Long)

The quantity available in the market represents supply, and demand is the quantity that buyers want to buy.
If you were shopping at the weekly market, would you rather buy 4 pounds of tomatoes for $6 or $4? Of course, it's only $4. So, assuming the product is of the same quality, you will buy it from the dealer, who only charges $4 for the tomatoes. Therefore, the demand from cheaper dealers will be greater than the demand from more expensive dealers.
So what does a merchant selling tomatoes for $6/lb do? Currently, he only needs to sell 66% of his competitors to make the same money. Or he waits until his competitors have no more tomatoes, then sells his tomatoes for $6/lb, earning 50% extra revenue. In the worst case scenario, he would have to lower the price. These competitive factors (supply and demand) feed each other and regulate prices in all markets.
In a stock market environment, prices strive to find what is known as equilibrium. At that moment, buyers and sellers are equally satisfied until the imbalance rebalances in favor of supply or demand. Then the price rises or falls again.
But even if you could accurately identify supply and demand, you wouldn't continue. What is decisive is the area where supply exceeds demand or demand exceeds supply.
It is called a resistance level or a support level.
It is important to realize that volume usually increases at these reversal points.
There are many ways to use resistance and support lines, I myself only use horizontal lines because I have the best experience.

Option A: Confirm Resistance or Support Levels If you have resistance and support lines drawn on your chart, look at what the price is doing there. Entering later can often save you from significant losses, but you'll move in a less favorable direction and minimize your potential profits. Important: The highest possible risk-reward ratio.

Option B: Enter without confirmation You determine how the route will behave at your specified resistance or support line and it will be boarded immediately without waiting for confirmation. If your expectations are successful, you are cheap, thereby increasing the opportunity-to-risk ratio. If a trade goes against you, you need to exit early to protect yourself from significant losses.

balanced recognition

A big problem with candles in charts is the period during which they form. Of course you know about candlestick patterns like hammer, doji, engulfing etc. Sometimes it works for you, but often it doesn't. This is due to the time composition of the candle. Therefore, candle patterns on a specific time frame are simply a random product of time, brokers, and traders. If you change the time frame in which the candle is formed, the candle and its pattern will also change. The Doji is now an ordinary candle with no signs of change.

Therefore, one should use different units of time to determine possible balances. Many turning points can be identified through equilibrium, but not all. Prices on charts are always random, and no one can 100% predict turning points on charts. Nor is it necessary for strategic money management. The decisive factors are returns and expectations.

You can often see these turning points ahead of time and use them to your advantage. You have to look past the chart because the imprints left in the snow by the big traders (the elephants) are easier to identify than the tracks of the smaller traders (the hares).
Another advantage is that you don't have to load unnecessary indicators on your screen. While I use a dashboard I created which mainly tells me the instantaneous strength of each currency pair, such as the US Dollar Index, I am interested in this before entering or exiting.
My main chart consists almost entirely of my own resistance and support lines. The candle strength indicator usually helps me identify effective candle thickness, but given the points above, this is not always easy.

The best indicators are the price chart and the order book. But the price chart is a tracking indicator because only when the candle is completed can I get meaningful information about the price level. But it's often too late.

In my initial analysis, I start with the daily or 4-hour charts to determine the general direction.
The 1-hour chart shows medium-term deviations, and the 15-minute/5-minute charts show short-term turning points in the market.
A very important tool for me is the 15 second bar chart. During phases of higher volatility, you can identify structures faster.
EURUSD is a striking equilibrium example. After the price rose from the 1.03249 triple top on December 26, 2016 to 1.20921 on September 8, 2017 and slowly entered a correction phase, many traders wondered how far this correction would go.

Interestingly, the price of 1.15529 on the monthly chart is already reflected in the 2003 equilibrium.



If you look at the monthly chart from 1994 to 2018, you can derive some trading possibilities from the equilibrium. This usually works every time unit.



Equilibrium example on the 15-minute chart for the period October 11-13, 2017

Now you'll be wondering if this always works. The answer is no!
Then all traders will become millionaires. If one person wins $100, the other person loses $100. This is the system.
If you lose $100, you shouldn't be sad. The money doesn't disappear, it just becomes another one. And he will definitely be happy.
Determination of the relevant balance is difficult and only possible through many years of experience. But as you can see, this trading option is well worth it. It is interesting for swing traders, day traders and scalpers and can be used on all time frames.
To better determine the balance, one should zoom out from higher time units to smaller time units. This can filter out inaccurate content.

By the way, removing shading in a chart often helps better identify equilibrium.



Equilibrium in 15-minute chart with and without shading

You can work well in this trading system using buy limit and sell limit orders, but they are less recommended when scalping.
Even equilibrium professionals reach their limits because trading has changed dramatically in recent years. Prices are unpredictable and remain random. Even if you use an order book, you usually have to realize that there are many fake orders that are removed shortly before the target. Oderflow, Footprint and Cumulative Delta are still great help, but unfortunately they can't look into the future.

Trading and making music have something in common. You can learn to play both ways, but ultimately it's the right feel and talent that make the difference between success and failure.

I wish you great gifts and feel great success.