The Oanda Order Book
The platform that I teach my Forex Course on is Oanda. I have been using Oanda since 2001. It is a wonderful trading platform with a vast number of currency pairs, plus technical analysis, blogs, forums and what I like the most, proprietary statistical resources.
If you know a little history about Oanda you know that it started as a theoretical currency shop out of Switzerland way back in the 1970s. These guys provided some of the cleanest tick data on forex to the major banks and financial institutions. The founder, Robert Olsen, wrote a few textbooks on Forex that are still used in many universities today.
Savvy statisticians
Because 0f their background as statisticians and mathematicians they have loaded up their trading platform with all kinds of great statistics. One of the things that I like the most is the Oanda Forex Order Book. This "book" tells you what percentage of Oanda's customers are long, short and where buy and sell orders are placed for various pairs.
Like inside information
I mentioned in an earlier post that this information is like knowing a floor broker's "deck," that is, what orders he is going to execute and at what price. In a sense it is like having inside information and that's extremely useful. It’s also like knowing the “hand” of a poker player at a poker game. I call it Market Composition.
By knowing where traders are long or short or, where they are going to be selling or buying, you can literally use their money as added leverage to your own funds. Furthermore, this information allows you to have the most amazing risk management capability without having to use arbitrary stops losses. (Remember, losses are a choice!)
Capitalizing on others' mistakes
Knowing where the orders are and knowing where other traders are positioned gives you unbelievable predictive power. Moreover, as Oanda allows users to see historic changes in these data--on an hour, daily, weekly and monthly time frame--you can see before your eyes the very reason why so many people end up not making money trading the markets. That means you can see, clearly, what behavior to avoid. (See my article on Mental Game.)
It will amaze you how time and time again you will see market participants selling at the bottom and buying at the top. Believe me when I tell you, that is a powerful lesson to all.
Learn the Order Book now!
Get my Forex Course on video and watch as I teach you how to use Oanda's Forex Order book.
