Lezione 5 – Microstrutture di mercato — Transcript

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1. 0:01Hello everyone, welcome to this new
2. 0:03Bulls Finance video for premium users.
3. 0:05I'm Gabriele and today I'm going to
4. 0:07explain concepts of supply and demand,
5. 0:09order types, and market participants.
6. 0:12So, let's start right away with market
7. 0:13participants. The most important market
8. 0:18participants are commercial banks;
9. 0:21basically, they control most of the
10. 0:24world's money and also determine, let's
11. 0:28say, the direction of the market. They
12. 0:34also interact, however, with central
13. 0:36banks, which are the second most
14. 0:38important group of participants. What
15. 0:41do these central banks do? Quite simply
16. 0:45, they hold a vast reserve of liquidity
17. 0:47in both local and foreign currency.
18. 0:51They control many economic factors,
19. 0:55such as interest rates, and when they
20. 0:59release news, it very often immediately
21. 1:04and heavily impacts the market and its
22. 1:08trend. Then, secondly, we have
23. 1:12international corporations. I'll give
24. 1:16you an example to make you understand
25. 1:18better. So, for example, Coca-Cola,
26. 1:22when they conduct business in
27. 1:24international markets, for instance
28. 1:27selling products in Great Britain, they
29. 1:30trade the pound, for example, with the
30. 1:33dollar. So if Coca-Cola sells in Great
31. 1:38Britain, it will end up shifting the
32. 1:41pound and the dollar. Thus, in large
33. 1:46quantities, and therefore moving the
34. 1:49market in turn. Then there are hedge
35. 1:53funds and also FX brokers, so brokers,
36. 1:56not necessarily just Forex, but brokers
37. 1:59. So what do they do? Let's say they
38. 2:03actively trade in the market and they
39. 2:09go against us, and we are the
40. 2:11participants, the last market
41. 2:14participants, and they influence rates,
42. 2:17spreads, and other things. Then there
43. 2:22is a small slice of participants, such
44. 2:26as business owners who simply trade in
45. 2:29the market with their own money and who
46. 2:32, in any case, have, let's say, a
47. 2:35higher liquidity availability than ours
48. 2:38. Finally, there's us, we are small
49. 2:44independent traders who simply operate
50. 2:49with small-to-medium accounts and are
51. 2:53the ones who, in quotes, suffer losses
52. 2:57from all these participants. So guys,
53. 3:02before I start explaining supply and
54. 3:04demand to you, I want to introduce one
55. 3:06small thing first, and I want to tell
56. 3:09you that we have been operating with
57. 3:11supply and demand concepts since about
58. 3:131979. When, let's say, Nixon introduced
59. 3:18floating exchange rate regimes. So,
60. 3:22having said that, I'll go on to explain
61. 3:25why I made this little chart. Quite
62. 3:28simply, this chart is a representation
63. 3:31of supply and demand. Because we start
64. 3:34right away from the left, so from this
65. 3:36area. This zone, as you can clearly see
66. 3:39, is a consolidation zone, a resting
67. 3:41area for the market. It is also a a
68. 3:44demand zone, excuse me, it is a demand
69. 3:47zone. What happens after having this
70. 3:51spring, okay, by the market, what did
71. 3:53it do? Not having much strength, the
72. 3:58market went to look for a retest in
73. 4:00this zone, you see, at this point here.
74. 4:05Why? Because, precisely, the market
75. 4:08does not move without demand or supply.
76. 4:13Any market, whether it is the Forex
77. 4:15market, the crypto market, or even the
78. 4:17fruit market, okay? The bread market,
79. 4:21without supply and demand, the market
80. 4:24doesn't move. Okay? So, in this case,
81. 4:28for the market to rise, it had to look
82. 4:30for other people who were asking for
83. 4:32that price, meaning they were demanding
84. 4:34it. Once the market captured these
85. 4:39people, okay, at this point and in this
86. 4:42zone, it said, we have many people
87. 4:45demanding, so there is high demand, and
88. 4:48thus the price, rightly having strength
89. 4:51towards the buy side, went up with
90. 4:54another spring. What happened?
91. 4:58Subsequently, the market went to rest
92. 5:00because we know that the market uh is
93. 5:03not always impulsive, so it has an
94. 5:06impulse, it rests, and then another
95. 5:08impulse. Now, after this impulse, the
96. 5:12market decided to rest. Okay? So, what
97. 5:16zone was created? A supply zone was
98. 5:19created, okay? A supply zone. Why a
99. 5:23supply zone? Because there was this
100. 5:26spring to the downside, so this
101. 5:28breakout. And so, what did the market
102. 5:33do? It had to look for other people,
103. 5:37other participants who were actually
104. 5:40offering that price, who were selling,
105. 5:43okay? So the price went back up to this
106. 5:47zone, okay? It took the acceptance,
107. 5:50meaning it took all the people who were
108. 5:52selling, and it went down again. Same
109. 5:56thing here. So we have another
110. 5:58consolidation and rest zone for the
111. 6:00market. What does it do? Spring,
112. 6:05breakout, retest in this zone, and then
113. 6:07it continues its trend towards the
114. 6:09short. Uh, quite simply, this is supply
115. 6:14and demand. It is obvious that you need
116. 6:18to master it, you need to uh backtest
117. 6:20it many, many more times. Uh, it
118. 6:24certainly doesn't take days to learn uh
119. 6:26to trade supply and demand, but it
120. 6:28takes time. But with time and patience,
121. 6:32you can really do anything. So, we have
122. 6:35a long chart, okay? We have some zones
123. 6:38called B and A, therefore a high and a
124. 6:41low. I called this high B, I called
125. 6:43this low A. What do we see? that at the
126. 6:46end of a retracement I have those
127. 6:49buyers present at this low, therefore A
128. 6:51, are the architects of the breakout of
129. 6:54high B. Why this? Because at this point
130. 6:58, okay, all the buyers, uh, entered,
131. 7:01okay, and caused this breakout,
132. 7:04therefore a new high that we call,
133. 7:07let's call it C. These buyers A created
134. 7:11a new high which would be C. Why does
135. 7:14this happen? Because they unbalance the
136. 7:18demand versus the supply with
137. 7:19absorption, so demand is created. Okay,
138. 7:23guys, as the last topic, which is order
139. 7:26types, I grabbed this image easily from
140. 7:29Google, uh, where I will explain well
141. 7:31what you are seeing. So, here you are
142. 7:35seeing the various types of orders, so
143. 7:37both buy and sell. I am going to
144. 7:40explain how to use them. Let's take the
145. 7:42first example, which is a buy limit. A
146. 7:46buy limit is a buy order that must be
147. 7:49placed below the market price. Now I
148. 7:53will explain how. Let's assume we have
149. 7:57a chart like this, okay? A long chart.
150. 8:03I now want to enter in this zone here,
151. 8:06okay? So at 1.29880. If I am not at the
152. 8:13chart or cannot be at the chart, uh, I
153. 8:15will place a buy limit. The buy limit
154. 8:20must indeed be placed below the market
155. 8:23price. So, if the price at this moment
156. 8:26is here, so 1.30, I cannot place it up
157. 8:28here, but I must necessarily place it
158. 8:30below. So, after having done my various
159. 8:33analyses, I decide to set it down here.
160. 8:36How does the price open? How does the
161. 8:39trade open? Very simply, the price must
162. 8:42go and touch this zone, okay? The trade
163. 8:46opens and then, uh, we can see it,
164. 8:49let's say, live, so go and see and
165. 8:52manage the trade. Uh, so let's repeat
166. 8:57that the buy limit cannot be placed
167. 9:00above the market price, but must be
168. 9:02placed below the market price and, uh,
169. 9:05we can, let's say, also, uh, leave it
170. 9:08there without, uh, necessarily opening
171. 9:11it, uh, automatically. Okay? Then we
172. 9:14move on to the buy stop. A buy stop
173. 9:18instead is also a buy order that must
174. 9:21be placed above the market price. So
175. 9:25another example, let's take a long
176. 9:27chart again, okay? We are in this
177. 9:32situation and I want to place a buy
178. 9:35stop, so also according to my analysis,
179. 9:38uh, I want my trade to open at this
180. 9:41point, so 1.30. So, what does the price
181. 9:45have to do to open the trade? It must
182. 9:47touch this price, so 1.30 and then,
183. 9:51indeed, the trade will open
184. 9:52automatically. Honestly, this is an
185. 9:58order I advise against, just like the
186. 10:01sell stop, because quite simply, the
187. 10:04trade could easily go against you, as
188. 10:07you are opening a position at that
189. 10:10moment in an overextended market. So,
190. 10:15when the market acts like this, it is
191. 10:16in overextension. We must try to make
192. 10:19as much profit as possible. Personally,
193. 10:24I use the buy limit, but I won't deny
194. 10:26that there have been times when I've
195. 10:29used the buy stop as well. The sell
196. 10:32limit. So, a sell limit must be placed
197. 10:38above the market price. So, in what
198. 10:42sense? Well, very simply, always
199. 10:46following my analysis, I want the price
200. 10:49, um, to open here, okay? I mean,
201. 10:52excuse me, the trade opens here, in
202. 10:54sell, so I go to place my sell limit at
203. 10:56, for example, 1.29. What will the
204. 11:00price do? It must touch this, uh, this
205. 11:04price—excuse the pun—and then the
206. 11:07trade will open automatically. To
207. 11:11profit, obviously, the price must go
208. 11:13down if we open a sell limit or a buy
209. 11:15limit. Then we have the sell stop. The
210. 11:20sell stop, quite simply, is the
211. 11:23opposite of a buy stop, so while we
212. 11:26place a buy stop above the market price
213. 11:29, we must instead place a sell stop
214. 11:32below the market price. So in this way,
215. 11:36we'll draw another chart; the price is
216. 11:40here. For example, we want the trade to
217. 11:44open here, upon the breakout of this
218. 11:47low, so the price will move like this
219. 11:50and the trade opens. So guys, these
220. 11:55were the concepts. I hope everything
221. 11:58was clear.