eBook by Tom Leksey
Locked-in Range Analysis: Why most traders must lose money in the futures market (Forex)
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LRA Pre-Second Edition (October 2018) English Download PDF 0.7 MB
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LRA (Second Edition): Read Online
Original Language: English, Russian

Contents

 

Foreword

Chapter 1. Preparing to Analyze

1.1    Why Do We Analyze Futures Instead of Forex?

1.2    An Introductory Guide to Futures

1.3    Role and Capabilities of a Market Maker

1.4    Volume, Open Positions, Delivery

1.5    Why Does Price Change Occur?

1.6    Why Do Instruments Correlate?

1.7    Impact of Fundamental Factors on Price

Chapter 2. Locked-in Range Analysis (LRA)

2.1    Types of Locked-in Ranges

2.2    Take-Profit, Stop-Loss and Break-Even Levels

2.3    Value of Trading Session and Time-Frame

2.4    Determination and Using of LR Imbalance

2.5    Real-World LRA (Trend Preference)

2.6    Real-World LRA (Flat Preference)

Afterword


Foreword

 

It is common for reasonable people to learn from their mistakes or from the mistakes of others, realizing the causes and effects of actions that lead to undesirable results. Knowing the statistics of those who “earn” on market speculation, each is certain that he is not like the others and that everything will turn out for him. And they are not even considering to leave this “way of making money”. While losing more and more money and time to find out “why trading is not for them”, people are being devoured by their failures because to accept a failure for them is equivalent to recognizing themselves an asshole.

Taking the reason for “why most traders must lose money in the futures market”, as a consequence, you truly realize your lack of advantages over the other market participants in the endless “exchange wars”, when one does not mind to yield this “battle” to others.


Chapter 1. Preparing to Analyze

1.1 Why Do We Analyze Futures Instead of Forex?

 

Starting with the Bretton Woods currency system (1944), the US dollar has been the main international reserve currency, so the quotes of other countries’ currencies are expressed through the US dollar.

Types of currency quotes:

- Direct quote (fixed amounts of the foreign currency are expressed as variable amounts of the domestic currency)

Example (US dollar is not the domestic currency): USD/CAD 1.3090 means 1 USD = 1.3090 CAD

- Indirect quote (fixed amounts of the domestic currency are expressed as variable amounts of the foreign currency)

Example (US dollar is not the domestic currency): EUR/USD 1.0680 means 1 EUR = 1.0680 USD

- Cross quote (the ratio between the two currencies, which is determined based on the rates of these currencies relative to a third currency)

Example: EUR/USD 1.0680, GBP/USD 1.2470 means EUR/GBP 0.8565 (1.0680/1.2470)

Based on the location of performing currency transactions, there is exchange market and over-the-counter market.

 

Table 1. Comparison of exchange and over-the-counter market

 

Unlike exchange market, in the over-the-counter market there is no central marketplace (the exchange clearing house), where all information about the transactions, on the prices reached by the parties, is received. In addition, there is nobody that would control and regulate the activities of all participants in the trading process. Therefore, different exchange dealers may have different quotes of the same traded instrument (such as currency). Nevertheless, the prices from exchange trades, on the relevant basic commodities for the nearest most liquid futures contracts, are used for the formation of over-the-counter quotes (WM/Reuters benchmark rates are used as standard rates for determining the OTC exchange rate).

Since Forex market is an over-the-counter market, and the transactions made in it (demand and supply) cannot influence the change in quotes, futures on the relevant currencies should be used for analysis and forecasting.

 

Table 2. The most liquid CME currency futures contracts as of 01.02.2017 and the corresponding Forex currency pairs. Types of Quotes - US dollar is not the domestic currency. Volume data source: cmegroup.com

 

Charts of Forex direct quotes are a mirror image of the relevant CME futures charts. Charts of Forex cross quotes (Examples: AUD/CAD; AUD/JPY; CAD/JPY; EUR/AUD; EUR/CAD; EUR/GBP; EUR/JPY; GBP/AUD; GBP/CAD; GBP/JPY) are the mathematical relationships of direct and indirect quotes, therefore, those who trade cross quotes are Lucky-traders.


1.2 An Introductory Guide to Futures

 

What Are Futures?

Standardized (according to quality, quantity, delivery time and place) contracts for the purchase and sale of financial instruments or physical commodities, for future delivery on a regulated commodity futures exchange.

Who Trades Futures?

Conventionally, traders are divided into two main categories, hedgers and speculators. Hedgers use the futures market to manage (to reduce or limit) price risk associated with an adverse price change. (Examples: airlines hedging fuel costs; jewelry manufacturers hedging the cost of gold and silver; farmers sell futures on the raised crops to hedge against a drop in commodity prices;). Speculators, on the other hand, accept that risk in an attempt to profit from favorable price movement. While futures help hedgers manage their exposure to price risk, the market would not be possible without the participation of speculators. They provide the bulk of market liquidity, which allows the hedger to enter and exit the market in an efficient manner.

Why Trade Futures?

In addition to hedging, futures trading provides the trader (risk-taking investor) with greater flexibility because of luquidity and capital efficiency because of leverage.

Leverage is an amount of money deposited by both the buyer and seller of a futures contract to ensure their performance of the contract terms. The performance bond may represent only a fraction of the total value of the contract, often 2 to 12 %, making futures a highly leveraged trading instrument. Therefore, futures contracts represent a large contract value that can be controlled with a relatively small amount of capital.

What does it mean?

The Euro FX futures contract could have a value of 125,000 EURO, but you would be able to buy or sell this contract by posting a performance bond of about 2,750 USD, which is only 2% of the contract value (EUR/USD 1.1000).

Liquidity

A condition that describes the ability to execute orders of any size quickly and efficiently without a substantial affect on the price.

Liquidity can be described in terms of volume and open interest (abbr. OI). Each unit of volume represents a complete transaction. When one trader buys a contract and another trader sells the same contract, that transaction is recorded as one contract traded. Open interest represents the total number of contracts, either long or short, that have been entered into and not yet offset or fulfilled by delivery. Each open transaction has a buyer and seller, but for calculation of open interest only one side of the contract is counted. Volume and open interest are reported daily and are used by traders to determine the level of activity in a market for a given day or a price movement.

To quickly gauge the liquidity of a market, traders may look at 1) the distance between the best bid and ask prices (bid-ask Spread), 2) the number of limit orders pending in the market at each bid and ask level (Level II) and 3) the frequency with which trades take place (Time & Sales).

Trading in liquid markets, where there is enough volume for you to enter and exit your orders without substantially affecting price, will help to ensure that you can exit a position just as easily as you enter it.

Type of Order

Market Order

The simplest and most common type is the market order. When you place a market order, you agree to either buy or sell at the best available price.

Stop Order

An order that becomes a market order when a particular price level is reached. A sell stop is placed below the market; a buy stop is placed above the market. Sometimes referred to as stop loss order.

Limit Order

An order that allows the buyer to define the maximum price to pay and the seller the minimum price to accept (the limit price). A limit order remains on the book (Level II) until the order is either executed, canceled or expires.

Market Regulation

Futures markets are regulated (Example: CFTC, NFA) to foster open, competitive and efficient futures markets, and to protect market users and the public from any fraud, manipulation or abusive practices.

Сontract Specification

Futures contract specification includes, but is no limited to:

Contract Size

Each futures contract has a standardized size that does not change.

Contract Value

Contract value is calculated by multiplying the size of the contract by the current price.

Product Code

The first two letters of a CME Globex (CME Group’s electronic trading platform, providing users across the globe with virtually 24-hour access to global markets) ticker symbol represent the underlying futures contract. The next letter in the ticker represents the month that the contract expires. The final number is representative of the the year the contract expires. Example: 6EH7 is a Euro FX (6E), March (X) 2017 (7) contract.

Contract Month

The month in which a futures contract expires. Delivery month is indicated by a letter: F – January; G – February; H – March; J – April; K – May; M – June; N – July; Q – August; U – September; V – October; X – November; Z – December;

Contract month contains the last trading day (settlement date) on which a futures contract may trade or be closed before delivery.

Tick Size

The minimum price change in a futures contract is measured in ticks. A tick is the smallest amount that the price of a particular contract can fluctuate.

 

Table 3. Contract specifications of most liquid currency, equity, energy, metals futures. Commodities contract months are the most active months for delivery according to volume and open interests. Specifications for all products traded through CME Group can be found at cmegroup.com

 

Settlement

Cash Settlement

At the end of the contract the holder of the position is simply debited or credited the difference between their entry price and the final settlement. (Example: the purchaser of an E-mini S&P 500 future is unable to take ownership of the index at expiration.)

Physical Delivery

At the end of the contract the holder of the position will either have to deliver the physical commodity (if short) or take delivery (if long). The delivery payment is based on the contract's final settlement price.

The holder of the open long (buy) / short (sell) positions must inform their clearing firm that he intends to make delivery. Clearing firm is required to report to CME Clearing (the exchange clearing house) all open positions that will be delivered. CME Clearing then matches long clearing firm (or firms) to the short clearing firm, begins with long positions entered on the oldest vintage date.


1.3 Role and Capabilities of a Market Maker

 

Who Are Market Makers? (Definition by CME Group)

A market maker (one type of speculator) is an authorized customer permissioned to quote both the buy and sell side in a given market (while all other market participants may open positions only in one direction – unidirectional). The main function of the market maker is to provide liquidity to the marketplace (contractual agreement with CME), usually in exchange for a reduction in trading fees. Market makers often profit from capturing the spread, the small difference between the bid and offer prices over a large number of transactions.

Modern futures market cannot function without such a professional participant as a market maker, since 24-hour trades include illiquid periods when there are sharp imbalances in supply and demand, and if the market is allowed to determine prices independently in such periods, then we can observe increased volatility and price manipulation, which can be very significant and would be regarded by market participants as an increased trade risk, equivalent to an illiquid instrument; therefore, the stock exchange, in our case its CME Group, is interested in the presence of market makers, providing them with privileges in exchange for compliance with the established obligations to provide and maintain liquidity.

Responsibilities of Market Makers

During the specified period of the trading session (American, Asian-Pacific, European), the market makers must continuously maintain two-way futures quotes, observing the minimum volume of own orders agreed with the exchange and the spread between bid-ask quotes (widening of spread for periods of increased volatility is possible).

As counterparties to each transaction in terms of pricing, market makers must take the opposite side of your trade. In other words, whenever you sell, they must buy from you, and vice versa.

IMPORTANT. Why do market makers act as counterparties for most orders, but not for all? The rest of the transactions may temporarily be accumulated by other market participants, both with speculators and hedgers; however, over time, all open positions will pass on to market makers, when one of the parties of a transaction, in which the market maker does not participate, decides to close the position.

Capabilities of Market Makers

To understand the capabilities of market makers, one should know the limited market depth available to any participant: 1) Data featuring the nearest (best) placed 10 bid and 10 ask limit orders shows the price and number of contracts (Level 2). 2) Data featuring each transaction made shows the price, time, and number of contracts (Time & Sales).

CME Group market makers use the full market depth available to the exchange, namely:

  1. Data featuring all existing placed limited orders.
  2. Data featuring all existing placed stop orders.
  3. Data featuring all open positions: price, volume, and side of order (buy/sell).

 

Figure 1. Net Positions (buy+sell) Market maker Order Book (Open orders, Open positions)

 

Market makers collectively create a market for each futures contract, centrally managing its common pool of positions to prevent conflicts of interest that would arise when working separately, when instead of earning the spread and self-quoting, market makers would get a large volume of positions that would not have a counterparty to close before the expiration of the futures. (Example: Speculator buys 1 cash settlement contract on the market, and his counterparty is Market Maker #1; then, the same speculator decides to exit the position and sell his contract; this time, his counterparty is Market Maker #2. As a result, the speculator does not have a position, and the market makers have 2 open positions that they can close only with each other; in this case, one of them will suffer losses.)

Position Limits

CFTC monitors compliance with Commission or exchange speculative limits, which help prevent traders from accumulating large positions that could destabilize a market.

 

Table 4. Limits of max number of open positions by one account. Source: cmegroup.com

 

All Month Level / Single Month / Delivery Month will be calculated on a Net positions (the difference between total open long and open short positions in a given asset held by one account).

Reportable Positions

Clearing members, futures commission merchants, and foreign brokers (collectively called reporting firms) file daily reports with the Commission. Those reports show the futures positions of traders that hold positions at or above specific reporting levels set by CFTC regulations. When an individual reportable trader is identified to the Commission, the trader is classified either as «commercial» or «non-commercial».

What is Market-Making? (Definition by Tom Leksey)

Market-making (CME Group) is a centralized automated trading system of placing orders from market participants, which has a common pool of Commercial and Non-commercial accounts, which provides liquidity in the futures market, simultaneously opening new positions (buy/sell) and closing already accumulated positions, so that the shares of profit are distributed between each participant in accordance with the established proportions.

According to the latest definition, market maker means all united participants of market-making on CME Group. In contrast to this, multiple (unrelated) market makers can participate in the same stock on the NASDAQ exchange, since the stock does not have an expiration date and counterparties will always appear to close the positions of a single market maker – it is only a matter of time.


1.4 Volume, Open Positions, Delivery

 

CME Group is the world’s leading (by trading volume) financial and commodity derivatives marketplace.

There are many reasons for opening/closing of transactions (hedging, fundamental factors, patterns and levels of support and resistance of technical analysis, trend following, technical indicators and moving averages, intuition, automated algorithmic trading, arbitrage trading, VSA, market profile, volume analysis, COT reports, options analysis, other non-popularized methods of analysis), but it is important to understand that most of the new positions are opened and closed within one trading day or trading session. Therefore, we can observe the same daily “average” traded volume on liquid instruments and a slight change in the open interest at the end of the trading day.

 

Table 5. Daily data on the volume and open interest of March 2017 futures contracts. Period: 02.2017. Data source: cmegroup.com

 

To open any transaction through CME Globex, a request for a New Order is sent to the exchange, which includes, but is not limited to: Unique account identifier, Unique order identifier assigned by client system (clearing member firm), Order quantity, Order type, Side of order (Buy/Sell), Instrument identifier (Future Example: 6EH7). When a New order is filled CME Globex assigned OrderID (order identifier). The CME Globex order identifier from your initial order entry is what you (your reporting firm) would use when you need to modify or cancel (close) that order.

Since the market maker accumulates all open interest (Chapter 1.3), the use of inside exchange information of OI, based on OrderID, allows to understand when to accumulate new positions and when to close the existing ones, so as not to remain with open positions that have not been closed, due to the absence of counterparties, on the last trading day of the contract. Therefore, if the number of open positions increases at a certain price, the market maker accumulates and saves these positions at this price; if the number of open positions reduces at a certain price, the market maker closes an equal number of its open positions at the relevant price, so that the number of open positions of market participants and market maker’s accumulated positions is equal. (Example: Futures open positions are equal to 50,000 contracts; the market maker acts as the second party on all positions; when the number of open positions decreases to 49,999 the market maker will close 1 available position at the price at which the closing took place, but from the opposite side of the order).

OI daily report is published in Final Daily Bulletin at 10:00 AM Chicago Time and delayed by one trading day.

The Change column in Table 5 does not show a complete change in OI during the day, as the value of open positions (At Close) is constantly updated: open positions close / new positions open, changing opinions about the market and reversal of positions to opposite, position volume reduction / position volume increase, closing of positions at targets (planned price) / closing of positions at stop losses (achievement of maximum loss) / closing of positions on margin call (compulsory closing by a broker when there is not enough funds to maintain the position on the trading account). The value of open interest as a predictive tool consists precisely in the changes in open interest, allowing to determine the degree of interest of market participants. To understand what changes occur with OI during the day, Locked-in Range Analysis (abbr. as LRA) is used.

Futures differ from forwards in that they are not concluded for the purpose of fulfilling the obligation provided for in the contract: as a rule, market participants tend to end their obligations by making a reverse transaction until the occurrence of fulfillment of futures obligations. Therefore, approaching the expiration of a contract, open positions that will not be delivered will be rolled over to the nearest liquid contract, retaining the purposes.

 

Table 6. Changes of OI during roll over to a new contract. Data source: cmegroup.com

 

The number of contracts for physical delivery on liquid futures is always less than the average open interest and makes up only an insignificant part of the total traded volume for the entire contract maturity term.

 

Table 7. The percentage of physical delivery with the maximum open interest and the total contract volume. Date source: cmegroup.com

 

According to the rules of the exchange, any market participant whose open positions remained after the last trading day of the contract, must go out for delivery and fulfill obligations to buy (take delivery of) or sell (make deliveru of) the underlying asset. Therefore, market-making participants always act as counterparties to the delivery of its accumulated open interest and deal with the storage of related assets. Currency and securities are kept in safes, precious metals are stored in exchange warehouses, and crude oil is stored in its own and leased oil depots (tankers).

Using the delivery notice, market makers acquire names from an impersonal definition and reveal the degree of participation in the delivery of futures that interest us. While analyzing data of deliveries for different periods and for different futures, the companies with increased participation stand out, among which there are market makers for which it is most advantageous to increase or decrease the stocks of the corresponding assets among all market makers in this period.

 

Figure 2.1 EURO FX March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.2 EURO FX March 2016 futures delivery report. Data source: DNS Report

 

Figure 2.3 EURO FX March 2015 futures delivery report. Data source: DNS Report

 

Figure 2.4 Japanese Yen March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.5 British Pound March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.6 Australian Dollar March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.7 Canadian Dollar March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.8 Swiss Franc March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.9 Crude Oil March 2017 futures delivery report. Data source: DNS Report

 

Figure 2.10 Crude Oil February 2017 futures delivery report. Data source: DNS Report

 

Figure 2.11 Gold February 2017 futures delivery report. Data source: DNS Report

 

Figure 2.12 Gold December 2016 futures delivery report. Data source: DNS Report

 

Figure 2.13 Gold December 2016 futures delivery report. Data source: DNS Report

 

Figure 2.14 Silver December 2016 futures delivery report. Data source: DNS Report

 

Warehouse & Depository Stocks Reports provide us with a list of warehouses with available stocks in Eligible status (the commodity exists, has been tested in accordance with futures contracts specifications, and is deferred for future delivery) and the prevailing volumes in the warehouses of the market participants already known to us from the delivery reports.

 

Figure 3.1 Warehouse stock of Comex exchange for gold in Eligible status. Data: 12.04.2017. Data source: Gold Stocks

 

Figure 3.2 Warehouse stock of Comex exchange for gold in Eligible status. Data: 12.04.2017. Data source: Gold Stocks


1.5 Why Does Price Change Occur?

 

Instead of creating liquidity, by definition of CME Group, a market maker earns the spread (Chapter 1.3), but earning the bid-ask spread is only possible with the same volume of ask and bid transactions at a constant price; the limitation of the specified length of futures trading time adds the condition that half of the transactions at ask/bid price should be the opening of new positions and the other half should be the closing of the previously opened positions. Continuously providing liquidity, the market maker cannot achieve such a ratio. Therefore, market maker scales the principle of earning the spread from a constant price to a trading range, and guided by open positions, their potential take-profits and stop-losses, the market maker accumulates open positions at the same price range, and locks the prevailing open positions (by shifting the price in the direction opposite to the range and quoting the price within market maker’ break-even zone) when there is an imbalance or loss of interest of market participants in current prices, thus insuring against losses in the event of simultaneous closing of open positions.

This principle of price change is the basis for futures with a market maker. LRA allows to determine the locked-in ranges and the future price changes that are profitable and permissible for the market maker.

Price manipulation that leads to market participants’ closing positions at stop-losses and not reaching their take-profits represents a conflict of interest, but market makers are forced to quote prices against most open positions to profit, and the losses of most are only their survival tool.

The market maker always has a planned price trend, based on the current imbalance, but just like other participants, market makers constantly find themselves in a situation of uncertainty in the market; they do not know where will the price go in a minute, hour, day, week, month, or year, as it is decided here and now and depends on the volume of new open positions and the closing of existing ones.

You will never know when and where a trend in the market will appear, even using the most objective information about the current situation. Open interest, the levels of stop-losses and take-profits are nothing compared to such factor as market sentiment (the mood of market participants regarding future price changes expressed through open positions), since none of this creates a trend, but only a single movement/wave from accumulation up to the point of distribution and nothing more.

Whereas the trend is created only by the market sentiment, as it can only occur in two ways: either the weak side (prevailing open positions) will maintain the original unprofitable positions for as long as possible (even up to a total collapse or margin call), or the weak side will take small losses each time, but the same direction as before will re-enter new positions.

If the weak side execute stop-losses and reverse positions in the right direction (of the trend), or ceases to believe in the continuation of the movement and remains outside the market observing the development of the situation, the trend will not be continued.

In such a way, the market (price) goes up because most are in shorts (sell). And the price will keep going up or be above the “sell” locked-in range until the market participants close “sell” and open “buy” positions. After that, the price will go down because the majority holds longs (buy). The price will decrease until the imbalance of open positions changes again.

When there is no continuous imbalance on the market, there is neither a trend; the market is in a state of one price range (flat), in which market participants define their intentions.

The market with a market maker presented in graphic form is an inversion of market participants’ expectations, expressed in the form of the prevailing volume of open positions.

When market makers have all the possibilities and motives for price manipulation, the question arises, “where are the allegations against market makers related to price manipulation?rdquo;

Example:

(Source: Case 1:11-md-02213-RPP, telegraph.co.uk)

Allegations of manipulations

The October 2010 lawsuit named JP Morgan and HSBC in connection with an alleged conspiracy and manipulation of the market for silver futures contracts traded on the Comex exchange.

The Court's decision

The charges against banks were dropped. There are no any facts showing that JPMorgan conspired with HSBC. The CFTC has twice initiated investigations into the alleged manipulation of the COMEX silver futures market and twice found that no such manipulation occurred (Market banking activity was known and permitted by the CFTC).

Interpretation

In theory, banks can manipulate the price of silver, but we cannot prove that such manipulations do occur.

Commentary by HSBC's global head of precious metals

“HSBC is an important source of market liquidity without which the spread, between the price at which the current contract is liquidated and a new contract is entered into, could widen dramatically, to the detriment of all participants.”


1.6 Why Do Instruments Correlate?

 

Market correlation is a statistical measure that determines how assets move in relation to each other (positive correlation – same direction; negative correlation – opposite direction).

Correlation is not permanent and is due to the fact that market participants make decisions on entering a separate trading instrument based on the value of others (they buy index futures forecasting the growth of other indices; they sell currency futures forecasting the strengthening of the dollar against other currencies), or open positions simultaneously on several instruments in the same direction.

Chart is the main market analysis tool for decision-making both on new and open positions, so the correlation in the trend period for different instruments shows the intervention of market sentiment, that is the prevailing open positions for each instrument, which show the opinion of market participants on how the instruments should correlate.

Example:

Market participants form the prevailing opinion about the strengthening/growth of the US dollar and confirm their view with the prevailing volumes of open positions based on the growth of the US dollar relative to other currencies.

 

Table 8. Constant correlation of directions of market participants and market maker’s prevailing open positions

 

This market sentiment creates an uptrend correlation (in the direction of market maker’s open positions) between currency futures prices, which will continue until the prevailing market sentiment is lost (sell = buy) or is changed for the opposite one.

Open interest with long-term goals (> one liquid futures contract trading period) influences the formation of long-term trends; OI with short-term goals (< one liquid futures contract trading period) forms prices every day.


1.7 Impact of Fundamental Factors on Price

 

Fundamental factors influence the price by the fact that new positions are opened on their basis, based on which “news” movements occur (Chapter 1.5).

Classification of fundamental factors in terms of their expectations:

1. Planned and expected factors are news on economic (macroeconomic indicators) or less often of political nature.

During the release of news with known release dates and times, the market maker has a “justified” opportunity for sharp price changes for distribution of the current and/or previously accumulated imbalance, as these movements will not attract the attention of the CFTC.

2. Random and unexpected factors are political phenomena and events (wars, terrorist attacks) and events of natural origin (cataclysms, natural disasters).

With a long factor life cycle (from several weeks to several years), the market maker can change the ratio of limit orders to maintain liquidity (Chapter 1.3) so as not to incur financial losses.

Example: Hostilities have begun in the country ‘X’, and market participants are actively selling national currency futures. It is also not profitable for the market maker to own (after expiration) this currency at the current price, therefore, he will continue to accumulate Buy orders in full, but to accumulate less Sell orders volume than (or equal to) his available accumulated Buy orders.

 

Why Does the Current Market Price Tend to Meet the Fundamental Factors?

1) Investigation by CFTC.

With a strong divergence between the price and the real market factors affecting the asset, CFTC will launch an investigation into the suspicion of asset manipulation.

Since it is impossible to express a fair market price in a certain value and the media sources are good at “justifying” the reasons for any price changes, the market-making system often does not come to the regulator’s attention. Nevertheless, this factor acts a deterrent for market makers against excessive price manipulation in their own interests.

2) Warehouse stocks of market makers.

The market maker goes to physical delivery (Chapter 1.4), and it is in his interest for the current market price to correspond to the fundamental factors as the market maker owns this asset in the form of warehouse stocks, and stocks need to be sold by future deliveries under derivative instruments or in the over-the-counter (spot) market.


Chapter 2. Locked-in Range Analysis (LRA)

(The analysis is used in the futures markets where liquidity is provided by market-making participants)

2.1 Types of Locked-in Ranges

 

Locked-in Range (abbr. LR) is the trading range in which the volume of open positions accumulates, making the price change to the side where the prevailing volume of open positions will be locked at a loss, because the price will no longer allow to close in profits or break-even.

 

Figure 4.1 Averaged graphical representation of the locked-in range positions

 

Resistance LR is the locked-in range in which the volume of open buy positions prevails, and it is profitable for the market maker to quote prices below the range.

 

Figure 4.2 Averaged graphical representation of the resistance range

 

Support LR is the locked-in range in which the volume of open sell positions prevails, and it is profitable for the market maker to quote prices above the range.

 

Figure 4.3 Averaged graphical representation of the support range

 

Gravitation LR (abbr. GLR) is the trading range in which the volume of open “buy & sell” positions accumulates with no significant imbalance, and it is profitable for the market maker to return the price back to the range after the range breakout if there are not enough prevailing loss-making positions to continue price movement in the same direction.

 

Figure 4.4 Averaged graphical representation of the gravitation range

 

An increase in open interest during the movement of a price within the same trading range leads to an increase in the potential for the subsequent movement of prices after the range breakout: at a strong imbalance – a breakout and movement in the direction opposite to the prevailing open positions; at a slight imbalance / no imbalance – a breakout in one direction and then in another direction, for triggering stop-losses on both sides of the range (range extension).

With an increase of a futures liquidity, a probability of strong imbalances in the locked-in ranges decreases, while a probability of an appearance of the gravitation ranges increases. In the future, the gravitation ranges either “lose” open positions and “are canceled”, or turn into the locked-in ranges.

The market has a trend structure when the unidirectional locked-in ranges prevail, and vice versa, the market has a flat structure when the gravitation ranges prevail.

IMPORTANT. The imbalance of the locked-in range is a support or resistance zone only as long as loss-making open positions remain, against the prevailing volume of which, it is profitable for the market maker to quote prices. Subsequently, the locked-in ranges lose the initial imbalance and turn into gravitation ranges (with remaining profitable positions moved to breakeven), to which the price will “gravitate”, in the absence of obvious sentiment in the market.

There is no sense in trying to forecast the prevailing open positions in the locked-in range; it is necessary to analyze the price and volume changes after the range breakout and in proximity to the TPSL levels (Chapter 2.2), which will allow to join the further profitable price changes for the market maker.

 

Figure 5. The logic of price changes in the futures markets, where liquidity is provided by market makers


2.2 Take-Profit, Stop-Loss and Break-Even Levels

 

The market maker maintains accumulated open positions of market participants until those who opened the positions close them (Chapter 1.4). Having data on pending orders (Chapter 1.3), the market maker sees price levels (Figure 1) at which market participants will begin to close their positions by take-profits or stop-losses. As for earning the spread (Chapter 1.3), the market maker is interested in increasing the number of open positions, the levels of take-profit or stop-loss are an obvious reason for the market participants to close open positions and a provocation to open new positions; therefore, the market maker quotes the price (Chapter 1.5) to accelerate the achievement of these levels by the principle against the prevailing volumes (Chapter 1.5).

The market maker is not solely guided by pending orders, as due to market participants’ unwillingness to show take-profits and stop-losses, a part of the market participants prefers to close by market orders at the achievement of predetermined prices; therefore, the information on the number and the direction of his open positions is primary for the market maker.

However, if the market maker does not know at what prices, when and how many new open positions will appear (Chapter 1.5), he does know at what prices the available open positions will begin to close by stop-losses, because the different market participants use approximately the same levels when using a chart as a forecasting tool (using similar rules of technical analysis).

Example:

If the market participants predict a price increase, they wait for the price to renew a nearest previous swing high; if they forecast a price decrease, they wait for the price to renew a nearest previous swing low. When the prediction for a price increase turns out to be wrong (the nearest previous swing low are renewed), the market participants exit the unprofitable positions, and vice versa.

Take Profit Stop Loss level (abbr. TPSL level) is the price level at which sellers and buyers will exit the market, closing their open positions by take-profits and stop-losses.

If the TPSL level is a signal to exit loss-making positions, then for a part of profitable positions, that will not be closed at it, the level is a signal to make the positions to a break-even (to move a stop loss order to breakeven) as their forecast of the range breakout turned up to be correct and they are waiting for the price to continue moving in the same direction.

TPSL 1 is determined principally on the basis of:

  1. The nearest previous Swing High/Low before the current range (Reason: Technical analysis)
  2. High/Low prices of the current range (Reason: Technical analysis)
  3. Addition X points to High/Low prices of the current range, where X is equal to the height of the current range in points (Reason: Psychology)

 

Figure 6.1 Graphical representation of TPSL 1 levels

 

TPSL 2 is determined principally on the basis of:

  1. Behind the nearest previous Swing High/Swing Low before the current range (Reason: Technical analysis)
  2. Price levels with highest open interest in option strikes (Reason: Hedging futures positions)

CALL options – for Sell positions

PUT options – for Buy positions

 

Figure 6.2 Graphical representation of TPSL 1 & TPSL 2 levels

 

TPSL3, TPSL4, TPSL5 and next are the price levels at which the volume of open positions of the locked-in range ceases to be the cause of further price changes, since the volume of open positions entered the market after the range breakout becomes higher than the volume of the remaining open positions in the range.

Note. When the TPSL levels are close, the next far TPSL levels will have an effect on the price formation.

The market maker sees the pending orders (Figure 1) and is guided by Net positions (sell+buy) at all price levels and TPSL levels for accumulation and saving the imbalance of open positions, against the prevailing volumes of which the further price change will take place (Chapter 1.5).

Example:

We have a LR with prevailing open buy positions. If the volume of pending limit sell orders (mainly take-profits) is equal to or greater than the volume of pending buy stop orders (mainly stop-losses) at TPSL 1 High level, it is not profitable for the market maker to reach this level in order to execute stop-losses, because there will be more buyers than sellers at this level, or there will be new open sell positions which will reduce the imbalance of the “buy” locked-in range. And vice versa.

That is why market participants face situations when the price unfolds “point-to-point” immediately after the execution of their pre-set stop-loss, or the price unfolds before reaching their pre-set take-profit 1 tick.

Open positions, their take-profits, stop-losses and break-even levels are the only true source of information for making decisions on speculative entry into the futures market with the market maker, therefore, those who do not base their trading decisions on it are Lucky-traders.


2.3 Value of Trading Session and Time-Frame

 

Trading on the CME Globex platform is generally available Sunday through Friday (Chicago Time), except special holiday trading hours. Exact trading hours vary by product.

 

Table 9. Globex trading hours (Sunday - Friday) with a 60-minute break each day. Source: cmegroup.com

 

Trading Session

Trading session means the most active (due to the time difference, or time zone) trading time in a particular region of the world. This is the period when macroeconomic indicators are released and dignitaries of the countries make official statements.  

 

Table 10. CME Globex most active trading sessions hours. Time Zone: GMT

 

Note. Trading sessions, most active trading time, largest regional exchanges in terms of trading volume:

- Asian-Pacific Session (22:00-09:00 GMT): New Zealand Exchange (NZX),  Australian Securities Exchange (ASX), Japan Exchange Group (JPX), Singapore Exchange (SGX), Hong Kong Exchange (HKEX), Shanghai Stock Exchange (SSE), National Stock Exchange of India (NSE).

- European Session (07:00-15:00 GMT): London Stock Exchange (LSE), Swiss Exchange (SIX), Frankfurt Stock Exchange (FWB), Euronext, Moscow Exchange (MOEX), Johannesburg Stock Exchange (JSE).

- American Session (13:00-21:00 GMT): New York Stock Exchange (NYSE), NASDAQ, Chicago Mercantile Exchange Group (CME Group), Intercontinental Commodity Exchange (ICE), Chicago Board Options Exchange (CBOE), Toronto Stock Exchange (TSX), Chicago Stock Exchange (CHX), Mexican Stock Exchange (BMV), BM&FBOVESPA.

 

Figure 7.1 Euro FX March 2017 Futures – hour distribution of daily volume. Period: February 2017 Time Zone: GMT

 

Figure 7.2 E-mini S&P 500 March 2017 Futures – hour distribution of daily volume. Period: February 2017 Time Zone: GMT

 

Figure 7.3 Crude Oil February 2017 Futures – hour distribution of daily volume. Period: January 19 – February 14 2017 Time Zone: GMT

 

Table 11. Influence of trading session on the price formation of CME Group futures.  

 

The price varies between the locked open buy and sell positions (Chapter 1.5), where the volume and direction of open positions are crucial. As a rule, the main source of new open positions during the trading day are trading sessions descending from high to low traded volume (Table 11). Significant price movements (going beyond the TPSL levels) at sessions with low influence on the formation of prices occur based on or taking into account and not contradicting the prevailing open positions during sessions with higher influence.

 

Table 12. Advantages of sessions with low influence on price formation

 

Focusing on price behavior during a session with low influence (Table 12) and correctly estimating the imbalance of the locked-in range, you can join the most profitable price movement scenario for the market maker.

Note. To increase the probability of trades profitability, based on LRA, it is recommended not to enter the market in sessions with increased influence on price formation, since the large volume of the new opening positions can change the imbalance of the market maker previous sessions and days to the opposite.

Time-Frame

Time-frame is the time interval used to group price changes for chart creating (Bars, Candles, and Line). The LRA time-frame selected for the construction of charts should include the current TPSL levels and the previous trading days at the same time, with a likely significant volume of locked/break-even open positions that influence the formation of prices by the market maker (Example: 1 Hour).


2.4 Determination and Using of LR Imbalance

 

Speculative futures trading is a zero-sum game when one player gains only at the expense of another player. The full control of the market maker over the participants of this game (knowledge of open positions and pending orders of each market participant) and over the holding of the game (price formation) gives an indisputable advantage to victory. By determining the locked-in ranges, we can join the next actions of the market maker by opening positions based on the causes of price changes.

 

Table 13. Properties of the locked-in range depending on the thinkable open interest (TOI)

 

Note 1. The number of open positions (direct dependence of influence on price change) depends on the traded volume and the time in one LR.

Note 2. Without knowing the exact number of open positions in the LR and the number of positions closed after the breakout of TPSL level, it is possible to focus exclusively on the average scenario of volume’s appearance.

 

Figure 8. Average scenario for determining the volume’s appearance

 

Depending on the goals and time of holding the position, trend and flat preferences for trading are available to market participants.

Trend Preference - the probability of price reversal from the locked-in range upon return based on the availability of locked-in open positions, against the prevailing volume of which it is profitable for the market maker to quote or maintain the price (Chapter 1.5).

Flat Preference - the probability of price returning back to the locked-in range after going beyond TPSL levels based on the absence / loss (triggering of stop-losses) of a significant imbalance of open positions, against the prevailing volume of which it is profitable for the market maker to quote or maintain the price (Chapter 1.5).

Signs of weak imbalance TOI:

  1. Return to the break-even zone1
  2. TPSL level breakout and price return to LR.

    Reason: Not enough imbalance to continue movement. (Accumulation continues)

  3. Quick movement beyond the range2
  4. TPSL level breakout and fast movement from LR.

    Reason: Encouraging the market participants to prematurely close their loss-making positions (Psychology)

Signs of strong imbalance TOI:

  1. Close approximation of price (with an already formed LR) to one TPSL level, but penetration of opposite TPSL level
  2. The approximation is only implemented if the Net positions are added to the prevailing volume side.

    Reason: Additional accumulation of positions; execution of profitable positions break-even

  3. Slow trend in the direction of TPSL level breakout
  4. Reason: With a slow price movement beyond LR without rollbacks (market correction), stop-losses will retract (Psychology); opening of counter-trend positions (in the direction of the locked-in range prevailing positions)

  5. Previous LR breakout
  6. Reason: The remaining volume of open positions in the previous LR cannot influence the current imbalance

  7. Increase in OI values relative to the previous trading day (data is available with a 24-hour delay)
  8. Reason: Increase in the number of open positions and the probability of market maker changing prices against the prevailing volumes (Chapter 1.5)

1Return to Break-Even Zone

Based on the logic of price movement (Figure 5), as a rule, “buy” positons are mainly concentrated in the upper half of the LR, and “sell” in the lower half. Therefore, the average allowable return to the range is 30-70% of the range height in points where the break-even orders will be executed (entered against the prevailing volume) in the profitable price direction for the market maker, the volume of which can restore or increase the imbalance remaining after the breakout of TPSL level and the closing of loss-making positions.

Only the market maker knows the exact level of Net positions (sell stop>buy limit / buy stop>sell limit) at the return to the LR, but given the fact that part of the market participants prefers to close by market orders (Chapter 2.2), the market maker is forced to “test” the prices, at which many open positions of the “trend followers” are placed (in the profitable price direction for the market maker), for their closing in a break-even by market orders or change the opinion about the market and reverse their positions.

2Quick movement beyond the LR

Sharp price movement is the price movement accelerated compared to average changes in the futures instrument price.

Sharp movement beyond the TPSL level is a sign of a weak imbalance, but a large volume of open positions.

In addition to quick locking of LR imbalance by the market maker, sharp movement is a provocation for the opening of new positions.

If market participants enter the sharp movement side, the breakout of the opposite TPSL level will be.

If market participants enter the side opposite to the sharp movement, the continuation of movement will be.

Rollback to LR

After price movement (breakout of TPSL level) beyond the LR, all positions are already locked, therefore, price return to the nearest border of the range is permissible to accumulate more open positions (strong imbalance) or price return to the LR for the execution of a breakeven of profitable positions.

Example:

If the price goes down by 100% of the range heigh in points from TPSL 1 level breakthrough, it will mean “buy” positions prevailed in the LR, and if they still remain there, then the price will go down with the probability of rollback to the low LR border (in case of strong imbalance) or to the break-even zone (in case of weak imbalance).

LR Cancellation

Price return after the breakout of TPSL 1 level by 30-70% of the height of the considered gravitation locked-in range in points and by >70% of the height of the considered resistance / support locked-in range in points.

Reasons: Resistance / Support LR: The market sentiment’s weak capacity to keep loss-making positions (Chapter 1.5). Gravitation LR: Closing the remaining profitable open positions at break-even levels (Chapter 2.1).

Reason: The market sentiment’s weak capacity to keep loss-making positions (Chapter 1.5)

Example:

If all shortists are out of the locked-in range, but open longists remain they will become the majority and the price will go against them. And vice versa.

Accumulating Positions in LR

Note.

Market participants prefer to enter the graphically formed price ranges, since they are able to set protective stop-losses beyond the TPSL levels.

An accumulation of open positions for high-volume sessions occurs with the renewal of the TPSL High-Low levels of locked-in range (The renewal of the TPSL High-Low levels of LR is much more effective in provoking the opening of new positions than the price intra-range quotation. Therefore, the market maker may renew the LR high/low prices in the interest of spread and under the accumulation of open positions any number of times until an obvious imbalance is formed).

The accumulation of open positions for low-volume sessions occurs within the TPSL levels guided by the open intra-range Net positons.

Mostly open “buy” positions are accumulated in the locked-in range, but TPSL 1 High has a strong imbalance in the placed Net positions when “buy stop” > “sell limit”. The market-making system will change the price to these positions and after they are executed, the automated system will quickly return the price quoting to the LR in which most open “buy” positions will be at a loss again. And vice versa.

Ignoring First Volumes

In assessing the traded volume, first candles/bars of the locked-in range should not be taken into account (renewal of the TPSL High-Low levels), as there are mostly accumulated stop-losses in them.

Advantage of the Last LR

Out of two visible LRs, the latter is stronger, as there are more open positions in it.

Tracking the rollover of OI

To correctly assess an accumulated and “outgoing” volume, it is necessary to track the rollover of open interest to the next contract of the traded instrument.

Note.

Using LRA on instruments with a high constant simultaneous open interest of more than 1 contract is less effective.

 

Using of LRA

The price of futures is never too high to start buying or too low to start selling, as everything is decided by the market sentiment, expressed in the number of open positions at this price zone (Chapter 1.5). Neither the market maker nor the crowd knows where they will change their opinion on the market. For speculative trading in similar conditions, an advantage in the market is the search or waiting for signs of an accumulation of open positions (Example: LR) and according to your preferences to make transactions based on the causes of future price changes.

Trend Preference

Opening Position

Entering the market in the direction opposite to LR (or at the moment of a price approximation to the range) which it is profitable for the market maker to maintain the price or which the prevailing volume of LR positions is at a loss and exiting at the moment of new significant volumes’ appearance (which may change the imbalance of the original LR) or at the moment of reaching TPSL 1 & TPSL 2 levels, is the Trend-method of speculative trading based on the causes of price changes.

Determination of Take-Profit and Stop-Loss Levels

your Take-Profit — stop-losses of locked-in participants in the LR (TPSL 1 & TPSL 2).
your Stop-Loss — the LR acts both as a reason and protection of your positions, therefore, your stop-loss is a violation of the scenario and is set beyond the LR.

Flat Preference

Opening Position

The current price is always in the break-even zone for all market maker’s open positions, but it is not always in the most profitable value for the market maker. Entering the market at the moment of price deviation from the LR (between the TPSL levels and/or after their breakout) and exiting at the moment of returning the price to LR or an approximation / breaking through the opposite TPSL level, is the Flat-method of speculative trading based on the causes of price changes.

Determination of Take-Profit and Stop-Loss Levels

your Take-Profit — a price return to LR or a breakthrough the opposite TPSL level.
your Stop-Loss — the likely levels of an execution of market participants’ take-profits (TPSL 2 & TPSL 3) of the considered LR, whose current open positions are profitable at the moment.

Note.

When the open interest of the LR disappears, your advantage to enter the market also disappears, and holding the position for longer, it relies on luck.


2.5 Real-World LRA (Trend Preference)

 

This Chapter is only published in PDF eBook.

Download

2.6 Real-World LRA (Flat Preference)

 

This Chapter is only published in PDF eBook.

Download

Afterword

 

Understanding the principle of market organization and the process of the current price changes in the market does not guarantee the possibility of making a profit, since the market is made by market participants here and now, when an advantageous open position may turn out to be “Locked-in” at any time.

Each person can have his own approach to trading; there can be an unlimited number of for entry and exit price, but LRA should be the basis for weighted speculative decision-making that allow to multiply the available funds, because trades that are not based on any cause-effect relationships are intuition-based and making such trades it is impossible to achieve stable profitable results in the long term.

Everyone can analyze the market using LRA method, these rules are the same for all. Daily LRA report is a convenient tool for understanding the current market sentiment and working independently with own investments. Use my reports to master the LRA method and compare your analysis with mine. Everything seems “clear” in the market until you open a position and only an unbiased LRA will protect you from the erroneous subjective assessment of the market, arising from existing positions or beliefs which prevent you from objectively assessing the situation.

Tom's Note

New LRA Reports will be available soon.

Don't have a "Lucky" Trading Day!

Showing 1-80 of 80 items.
  • QUESTION: first i would like to thank you for your work . the best book i have ever read . my question is when market makers take the price at the TPSL point and participants' orders absorb all market liquidity. What would be the best strategy of market makers? Thanks
  • ANSWER: the task of the market-making system is to provide liquidity, the situation when liquidity is absorbed is excluded :)
  • QUESTION: Здравствуйте! Я перепробовал все в трейдинге. У меня ничего не получается. Но я не хочу сдаваться и продолжаю проигрывать. Как вы стали зарабатывающим трейдером? К каким выводам вы пришли после долгих проигрышей?
  • ANSWER: Долгие "проигрыши" означают, что действия совершаются "не те". Найдите трейдера, который зарабатывает и обучитесь у него (так делал я, основу всех знаний описал в книге LRA).
  • QUESTION: Не понимаю как определять SLTP уровни, где есть хаи и лои там более менее понятно, там где их нет, не понимаю как, смотря на ваши репорты старые.
  • ANSWER: Где нет Hi-Lo никому не понятно куда стопы ставить, поэтому зависит от волатильности инструмента (на валютах до 40-70 тиков), можно смотреть на выход объемов или на опционные ближайшие сильные уровни
  • QUESTION: Приветствую Том. Интересно по какой причине ты в отчете по валюте за 3.12 не выделил диапазон 1.13050-1.13600 как ЛР по 6Е?
  • ANSWER: Высокая волатильность, вероятность на скопление объема в данном LR открытых позиций низкая.
  • QUESTION: Приветствую, почему вы в своих последних отчетах по валюте, все еще рассматриваете ЛР сформированный по новозеландцу уже очень давно? Судя по логике даже если там и были открытые позиции, то исходя из прошедшего времени они с большей вероятность уже зафиксировали свои прибыли?
  • ANSWER: Верно, LR данный уже не имеет достаточно открытых позиций, чтобы влиять на будущее изменение цены. Тем не менее, в отчетах LRA диапазоны отображаются активными максимально долго, чтобы не казалось, что LRA Reports "подстраиваются" под исторические данные.
  • QUESTION: Добрый день, Том. Как определить, если LR исчерпал свою значимость? Спасибо.
  • ANSWER: 1) После выхода цены из LR вышли высокие объемы 2) Если прошло много времени после формирования (от 3 дней)
  • QUESTION: If Bitcoin doesn't have traditional market makers like legacy futures markets do, because now it's all based on "matching engines" matching retail against retail, not buying and selling to an actual Market Maker, then how can LRA be used on Bitcoin? Thanks.
  • ANSWER: LRA uses for CME futures trading. LRA using in other markets at your own risk ;)
  • QUESTION: Hello Tom. I am a little confused and have no idea about what is the difference between Range extension and LR cancellation. If a GLR tends to transform itself to Support LR or Resistance LR with a bounch of Range extensions added, why we have an unexpected LR cancellation and a new LR formed just near by in some particular situations? Is that because market sentiment is changed due to some fundamental factors and market participants have to seek a new value area? Or some other reasons? Your ebook is amazing and informative. Thank you for sharing such precious knowledge for us.
  • ANSWER: We have no unexpected "LR cancellation". The only way to cancel GLR if a price updates Hi/Lo (> medium trading volume) and then return to LR. Use my article "How to Determine and Use Locked-in Ranges. Step by Step" for more info: https://lratrading.com/site/article?id=10
  • QUESTION: Добрый день. Планируется ли вторая часть книги? Спасибо.
  • ANSWER: Второе издание появилось в октябре 2018. Не хватает лишь главы "2.6 Примеры LRA (Флет предпочтение)". Примеры можно видеть в статьях на сайте Gravitation Locked-in Ranges of the Month. Постараюсь до 2030 года добавить главу:) Stay tuned)
  • QUESTION: Is it reasonable to apply LRA on Futures markets other than U.S. ? For example the Hong Kong exchange, Sao Paulo Brazil exchange. I wonder if the volume on those are relevant. Thanks.
  • ANSWER: If exchanges have the one market-making system you can use LRA.
  • QUESTION: Do you use any sort of data providers?
  • ANSWER: CQG Datafeed only.
  • QUESTION: Hello Tom. I hope you're well. I want to ask which chart/website/software do you use for reading open interesnt and prevailing positions on CME futures and other futures on FX. Do you use something similair to TRDR for crypto?
  • ANSWER: We have no CME data of OI and prevailing positions like TRDR & Binance PREP Futures. Using VOLUME & OPEN INTEREST by CME Group -> https://www.cmegroup.com/markets/fx/g10/euro-fx.volume.options.html#optionProductId=58 we have no real-time data, only the day-over-day change in open interest.
  • QUESTION: Does this work on cryptocurrencies with major market cap like Bitcoin??
  • ANSWER: Bitcoin futures market is now heavily influenced by the Binance market-maker, so LRA is becoming quite relevant to use.
  • QUESTION: Hi Tom, I don't understand Russian, and google translate often does not do the best job in translating so the interpretation is abit different. Are there any forums in English that discuss LRA?
  • ANSWER: Yeah, Google it
  • QUESTION: Can we use shorter time frames like 5-15 mins charts for day trade scalping using Locked-in Range Analysis.
  • ANSWER: Mid-term open positions (LR) are better visible on the hourly and higher timeframes
  • QUESTION: 1) More than one Market Makers participate in Market Making ( JP Morgan, Goldman Sachs etc) There is a possibility that one bank got more "Buy" open position and other got more "Sell" open position. How this scenario is going to influence the market move. Is that an example of no imbalance? 2) As market participants we can't get the information about open buy/sell positions details in a short time frame during intraday trading. From FootPrint Charts we can get the information about aggressive/passive contracts details from DELTA. More Positive Delta, i.e. more aggressive buyers within a certain price range indicate more buying positions becos mostly market makers are in the passive side of the market providing liquidity. Is that the correct assumption?
  • ANSWER: 1) Market-making (CME Group) is a centralized automated trading system of placing orders from market participants, which has a common pool of Commercial and Non-commercial accounts, which provides liquidity in the futures market, simultaneously opening new positions (buy/sell) and closing already accumulated positions, so that the shares of profit are distributed between each participant in accordance with the established proportions. According to the latest definition, market maker means all united participants of market-making on CME Group. 2) We can't know what Open Positions from Delta & FootPrint are open and what are closed. So this information has no weight for trading CME futures.
  • QUESTION: Доброй ночи. Перечитал еще раз книгу. В разделе примеры на станице 51 и 53 приведены два противоположных примера по выходу объемов высоких и низких при пробитии LR а по итиогу результат выводов одинаковый. Как так? Я понимаю что если объем мальникий то позиции остались открытые а если при пробитии диапазоны вышел большой объем то позиции закрыли если нет, прошу пояснить. Спасибо
  • ANSWER: "по итогу результат выводов одинаковый". Результаты выводов действительно одинаковые, однако разная вероятность успешного исхода. Трейдинг - работа с вероятностями.
  • QUESTION: Hi! do you think there is any possibility in automating this trading strategy ? thanks
  • ANSWER: There is high possibility :)
  • QUESTION: Том. Добрый день/вечер. Из-за сложностей перевода появился вопрос: при выходе средних/больших объемов после выхода из ЛР, он является отмененным (cancellation) синонимично - аннулированным (... that is LR cancellation)?
  • ANSWER: "При выходе средних/больших объемов после выхода из ЛР" данный LR теряет силу дисбаланса, минимальная всегда будет 1/3, так как всегда будут оставаться открытые позиции в малом уже количестве, когда их наличие не влияет/не значительно влияет на цену. Отмена LR происходит при возврате цены обратно в диапазон.
  • QUESTION: Добрый день! Хотел спросить, при входе в сделку вы обращаете внимание на время? И какое значение для вас имеет тайминг в целом?
  • ANSWER: Азиатская и европейская сессии имеют меньшее влияние, чем американская, по причине меньшего проторгованного объема, что обычно напрямую влияет на открытый интерес по фьючерсу. Как следствие, торговля в эти временные периоды будет иметь повышенную вероятность для изменения цены относительно имеющегося LR.
  • QUESTION: в какое время публикуются репорты?
  • ANSWER: Срез LRA происходит в течение Европейской-Американских сессий. На email сразу после публикации репортов приходит уведомление.
  • QUESTION: вы минусовые сделки не выкладываете почему? или их нету?
  • ANSWER: LRA является анализом, сделки не выкладываются нигде. В Articles публикуются итоги месяца, где показывается как отрабатывались LR, которые ежедневно публикуются. И да, за ноябрь, декабрь больше 90% GLR отработались :)
  • QUESTION: How do I know for sure if I have properly identified a range?
  • ANSWER: Use my reports to master the LRA method and compare your analysis with mine.
  • QUESTION: Don't have a question, just wanted to post a few great GLRA examples on NQ's from this past week. https://www.tradingview.com/x/4t26qtJ9/
  • ANSWER: Good work)
  • QUESTION: Здравствуйте! Когда будут стримы?
  • ANSWER: Новые видео будут в январе 2021 :)
  • QUESTION: Том, LRA это лучшее, что можно использовать в трейдинге!!! СПАСИБО ЗА LRA!!!
  • ANSWER: Спасибо)
  • QUESTION: Привет Том! Тебе это имя больше нравиться я так понял. Первое- спасибо за книгу. Определенные намеки на такую работу маркетмейкеров я услышал в лекциях Михаила Лемаха, он коучер Волфикс.Система обьемного анализа сложная и поэтому не популярна в массах. Но тогда я не сделал такие выводы, как сделаны в вашей книге. Это ценно что я ее прочел. Еще раз спасибо. После наверное 6-7 раз прочтения, есть вопросы- если возможно получить пояснения будет супер. 1- если маркетмейкер создает ликвидность путем наполнения стакана, то как он двигает цену? через сторонних лиц? 2- информация по ои транслируется с биржи и такие терминалы как атас, волфикс, сбпро показывают ее, или это не достоверная информация пока не закрылась торговая сессия? 3-Может ли дельта показывать потонциальный выход из диапазона? Если дельта бай то выход будет шорт и наоборот? 4- значит ли сокрощение ои после выхода из баланса, что будет возврат в диапазон? И принято считать что прорыв баланса сопровождаемый выходом обьема считается истинным, или в данном случае важно время развития и если после прорыва не следует быстрого продолжения то нет значимого дисбаланса и вероятно будет возврат. 5- какой временной отрезок лучше анализировать после выхода и например цена достигла tpsl для продолжения или возврата? 6-если я правильно понял вашу рекомендацию то лучше торговать на европейской и азиатской сессии, анализируя предыдущую американскую сессию. 7- не совсем понятно где выставлять стоп в случае работы при флэт предпочтении- открываем сделку на уровне tpsl тейк нижняя граница диапазона или tpsl противоположняя а стоп ставим на уровне tpsl 2? соотношение 1 к 1? а если уровент tpsl 2 очень далеко не входим в сделку так? Еще есть вопросы по картинкам но не знаю как их прикрепить. Еще раз спасибо.
  • ANSWER: Данный формат Ask Tom подразумевает вопросы, на которые можно быстро ответить да/нет. Продублируйте вопросы в обсуждениях группы здесь -> https://vk.com/lratrading . Рекомендую предварительно ознакомиться с уже существующими вопрос-ответ связками, возможно на ваш вопрос уже был дан ответ. Если нет - то постараемся закрыть такой. Спасибо.
  • QUESTION: Hi Tom, I did not understand yet the system. It is difficult to understand the book. For example I don't know when to use flat or trend preference and I don't know in which direction is the gravitational mouvement.
  • ANSWER: Trading is hard. Read my Article -> "What you always wanted to know about Locked-in Range Analysis"
  • QUESTION: Здравствуйте, почему вы решили выкладывать статистику только по GLR ?
  • ANSWER: Экономия времени
  • QUESTION: Том, доброго времени суток вашему часовому поясу. Мне стала с недавних пор, очень интересна ваша методология/ Но порой, наибольшей проблемой является определение самого LR, а именно, каким принципам должен соответствовать LR? У вас в некоторых скринах, они обозначены прямоугольником-сеткой, где то просто прямоугольником. Мне кажется что этот фундамент и является некой, не побоюсь аксиомой, правда невероятно сложной, (vsa в разы легче воспринял, но безуспешно :) ). Спасибо за внимание
  • ANSWER: Определение самого LR -> 2.4 Распознавание и применение дисбаланса LR (глава книги), также рекомендую ознакомиться с вопросами, которые уже были заданы в ВК группе https://vk.com/topic-160532491_39301005 , ведь вопросы часто повторяются. В отчетах используются разные цвета: Синий - Диапазон притяжения (Gravitation LR), Зеленый - Диапазон сопротивления (Resistance LR), Красный - Диапазон поддержки (Support LR)
  • QUESTION: Будет ли статья с результатами месяца август/сентябрь?
  • ANSWER: И за октябрь тоже должны быть :) Скоро сделаются
  • QUESTION: Other than your book, do you have any other reading material you can recommend? Maybe books on crowd psychology or market manipulation
  • ANSWER: crowd psychology? market manipulation? Why? LRA answers all questions about CME futures trading :)
  • QUESTION: Hi, How can I access to open interest in tradingview for forex?
  • ANSWER: It's impossible
  • QUESTION: Здравствуйте Том . Я с удовольствием прочитал первую часть вашей книги . Скажите как вы считаете имеет ли значения Тайм - Фрейм для анализа зон LRA
  • ANSWER: Имеет. Для LRA используется 1 Hour
  • QUESTION: Thank you for LRA!
  • ANSWER: My pleasure
  • QUESTION: do you believe we can use this in the fx spot even not having access to real volume?
  • ANSWER: LRA needs real volume of the FX futures. You can use 'tradingview' for this
  • QUESTION: Man you're awesome. Until now I have been drawing fibonaccis all over the place, looking at patterns, MACD, RSI and whatnot and nothing worked until I read your book like 60 times. I'm finally making good money. By the way, LRA does work on cryptocurrency but on shorter time frames like 5 min or even 1 min. I have managed to get perfect entries many times.
  • ANSWER: My pleasure. If LRA works on cryptocurrency it means the presence of a market maker. there is a possibility of this
  • QUESTION: Здравствуйте, Том. Еще один вопрос - используете ли вы какие-то дополнительные иснтрументы(фильтры) для подтверждения анализа? Например анализ стоимости коррелирующих инструментов или индексы? Возможно учет ситуации на разных таймфреймах?
  • ANSWER: Анализ не может быть подтвержден, анализ идет отдельно от стратегии, а стратегии могут быть совершенно разными и любыми и у каждого своя, LRA фильтрует именно входы по стратегиям
  • QUESTION: Посмотрел видео на youtube с вашей торговлей(Скальпинг ES). Все эти сделки залючались в соответсвии с LRA анализом?
  • ANSWER: LRA анализ имеет много производных, в скальпинге применял именно производные от LRA.
  • QUESTION: Приветствую, Том! Прочел Вашу книгу несколько раз, чтобы окончательно вникнуть и появились вопросы. Буду благодарен за ответы. Насколько я понял, существует обратная корреляция между проторгованным объемом и выходом объемов из диапазона, верно? То есть, анализируя определеннй диапазон с объемами, можно предсказать, какой будет объем на выходе из диапазона? Но по скринам в конце книги у меня не получается соотнести эти данные, т.к. гистограмма объема в диапазоне не всегда бывает большой, а LR при этом может быть 3/3. И наоборот. Или я неправильно пытаюсь определить силу LR?
  • ANSWER: LR 3/3 отличается от LR 1/3 тем, что в первом случае вероятность того, что открытые позиции из видимого проторгованного объема сохранились в большем количестве гораздо выше чем, в случае с LR 1/3
  • QUESTION: Здравствуйте Том. Разъясните пожалуйста про ежемесячные отчёты по GR?Стрелками показаны цены открытия позиций и места их закрытия. Это понятно. Не понятно одно, когда их открывать? Ведь не каждая GR может отработать хотя бы потому что она станет LR.
  • ANSWER: Ответ на Ваш вопрос в статье - What you always wanted to know about Locked-in Range Analysis. На русском языке статью можете найти в группе Вконтакте - https://vk.com/lratrading
  • QUESTION: based on what price movement shall i open my orders or positions? I have reviewed all reports and the article for a several months, and it seems that the reports are inconsistent with the article, I mean that the positions you said that you took are not similar to what the reports showed! what is the technique or price action to use to open positions?
  • ANSWER: that is why you don't understand what LRA is
  • QUESTION: Hey tom, There is something confusing in the reports, help me understand, there are several reports where you said to short at level 1 for example in the Flat Preference, and at the same time you said long at the same level in the Trend Preference. how is this possible? or we can choose one of the two options?
  • ANSWER: Hey, the answer to your question is in the LRA book, and also in the articles on the site: "How to Choose: Trend Preference or Flat Preference", "What you always wanted to know about Locked-in Range Analysis"
  • QUESTION: Let me put it another way; "Thinkable OI" is not an English expression, and thus makes no sense in English.
  • ANSWER: it was originally called Potential OI
  • QUESTION: Hi Tom. Thanks for your hard work, and for sharing your findings. I have some suggestions for the English version. I was confused by the term "Thinkable Open Interest" for a while, as it doesn't translate well to English. Could I suggest you change this to, "Open Interest Confidence", and, in Chapter 2.4 Table 13, to change the 1/3, 2/3 3/3 grades to percentages, 33%, 66%, 99%? Also, the logic would be better if you moved that title row to the bottom of the table, as they are the result of assessing the Number of Open Positions and the Volume Appearance, not the other way around.
  • ANSWER: We have no "Confidence" ever, that is why we use a term "Thinkable". Thank you for your suggestions.
  • QUESTION: Hello Mr Leksey, is LRA appliable to the futures cryptocurrency market?
  • ANSWER: No. BTC has no cause-effect circumstances for the analysis to work.
  • QUESTION: Tom are you planning to add btc to your Reports
  • ANSWER: No. BTC has no cause-effect circumstances for the analysis to work.
  • QUESTION: Hey Tom, supposably we have the Spot market Open Internet for multiple large brokers, wouldn't the LRA strategy work as well?
  • ANSWER: I do not understand the question
  • QUESTION: I still don't understand the Figure 1. Maybe you can give a concrete example like: "On the OPEN ORDER graph at 1.1000 we can see there are X... and Y ..." and same for OPEN POSITIONS? Thanks for your help
  • ANSWER: Figure 1 is a virtual sample. That information is unavailabe to all regular market participants
  • QUESTION: Most academic papers or serious books provide sources on which their work is based. It doesn't mean at all that they merely copied the sources, but they necessarily had to collect informations before they could process it and create their own work. Anyway I perfectly understand if you don't want to disclose anything further or if your work is only the fruit of your experience or various reading and you can't provide specific sources, I was just asking because I am working on market making and I need to find other sources about this subject. I really do like your book, Thanks for your work !
  • ANSWER: Use CME Group sources for more information. My pleasure
  • QUESTION: Hi Tom, I've discovered your book today by searching informations about market making on futures at CME. What a great book ! Very clear, concise and well explained. Exactly the informations I was looking for for so long, and a system to trade it in bonus :) Thanks so much for your work. I have two questions: 1) I apologize in advance if the question is stupid, but the Figure 1 page 11 is unclear to me. As I understand it for now the OPEN ORDERS histograms (left) are representing: - Top left: the limit sell orders sitting in the order book, aka the ASK. - Bottom right: the limit buy orders sitting in the order book, aka the BID. - Top right: the buy stop orders that are sitting in the order book - Bottom left: the sell stop orders (invisible to normal participants) The OPEN POSITIONS (right) histograms are representing: - Top right: for each price above the current trading price, the number of long positions which has been opened previously and not yet closed (invisible to normal participants) - Bottom left: for each price below the current trading price, the number of long positions which has been opened previously and not yet closed (invisible to normal participants) So how come the OPEN POSITIONS graph doesn't show any short positions previously opened above the current price and also no long positions previously opened below? I may be completely wrong about my reading of the histograms but I can't understand why... 2) I am searching for more informations and references about the market makers on futures market. Do you have some reference material to share? Thank you !
  • ANSWER: 1) OPEN ORDERS histogram represents Net Positions (buy+sell). No the type of order. Why? All of that is invisible to all participants (not only bottom left) OPEN POSITIONS histogram is also invisible for you. 2) More than LRA? What do you think my goal of writing book was? Copy the reference material?)
  • QUESTION: Обращаюсь к пользователю, который 2 сделки за неделю закрыл в "+". Вопрос, если LRA не дает направление, то как ты искал сами точки входа? Благодарю)
  • ANSWER: Предлагайте свои варианты "как ищите", когда просите других объяснить)
  • QUESTION: Здравствуйте Том! Могу ли я пополнить свой кошелек на сайте другим способом? В моей стране нет PayPal и невозможно в нем зарегистрироваться)
  • ANSWER: Да, ответил на email.
  • QUESTION: Том, спасибо за отчеты! И за LRA ! по SI и NG взял профит! всего 2 сделки за неделю и обе прибыльные, благодаря тебе! спасибо!!
  • ANSWER: Да, LRA отлично позволяет зарабатывать)
  • QUESTION: Том, здравствуйте. При покупке IC Reports идет инструкция как их и спользовать? Ещё интересует, входы ведь не внутридневный, а среднесрочные, верно? Благодарю и извините за столь глупые вопросы
  • ANSWER: Инструкция - LRA. Открытые позиции в рассматриваемых LR находятся среднесрочные да, но входы могут быть и внутридневные, например, когда на следующий день уже отменяется GLR.
  • QUESTION: На ММВб ОИ в свободном доступе. Вопрос в том зачем они его дают в свободный доступ? Может то, что все видят ОИ, это минус? Кстати доступна ли подписка на ОИ Американского рынка?
  • ANSWER: Доступ к ОИ в реальном времени очень нужная информация. На CME такого нет. ММВБ делает рынки более открытыми и дает еще срез каждый день по направлению позиций физ и юр лиц. На америке о таком можно только мечатать;)
  • QUESTION: Создается впечатление что с помощью ЛРА гораздо успешнее можно торговать на ММВБ. Хотя вы этого не делаете, в чем причина?
  • ANSWER: Поясните причины Вашего "создаваемого впечатления".
  • QUESTION: Трудно понять разницу между LR и GLR на практике. Что подразумевается под возвратом цены? Ложный пробой границы диапазона? Или уход цены до TPSL? Или уход цены до TPSL и его пробой? В теории на картинках все ясно. Когда смотришь Ваши отчеты, то разницы между LR и GLR не видно вообще.
  • ANSWER: Определить LR / GLR можно только на истории. LRA использует сам факт наличия "диапазона заблокированных позиций" для принятия торговых решений. "Флет предпочтение" - LR для определения причинно-следственного тейк-профита. "Тренд предпочтение" - LR для определения причинно-следственного стоп-лосса.
  • QUESTION: Доброго времени суток. Возможно ли добавить в отчеты анализ биткоина?
  • ANSWER: LRA не работает на спот-рынке. Нужны фьючерсы. Фьючерсы на биткоин на CME не являются определяющими для цен, в отличие от рынков форекс, индексов, металлов, сырья
  • QUESTION: Добрый день, Артемий. По каким критериям определять начало возврата в диапазон, который в будущем станет GLR?
  • ANSWER: GLR изначально формируется, а не на истории, после возврата цены. Как определять полностью описано в LRA книге.
  • QUESTION: Добрый день в платной подписке во сколько публикуются отчеты допустим за 11 мая? Укажите часовой пояс в который выходит отчет, также возможно ли получать отчет сразу после появления диапозона?
  • ANSWER: LRA Reports представляют собой срез LRA в первой половине европейской сессии, представлены в удобном к ознакомлению виде, структурированы и сверстаны в PDF документ. Каждый день Вы получаете на почту уведомление о выходе новых отчетов сразу после их публикации. Ответ на вторую часть вопроса - Нет. Срез делается 1 раз в день.
  • QUESTION: Артемий, добрый день. В отчетах сегодня гравитационные диапазоны по британцу, австралийцу и новозеландцу Вы выделили красным цветом. Что это означает? Несколько дней слежу за австралийским долларом - никак не вернётся в диапазон притяжения... Спасибо.
  • ANSWER: GLR с течением времени теряет свои открытые позиции и становится уже направленным LR. Красный цветом обозначается Support LR. Вид диапазона в отчетах указывается как Sentiment (Toi). Вам нужно менять представление о рынке, если Вы считаете что 6A должен вернуться в GLR. LRA это работа с вероятностями.
  • QUESTION: Здравствуй. Как скоро выйдет второе издание книги?
  • ANSWER: Второе издание появилось в октябре 2018. Не хватает лишь главы "2.6 Примеры LRA (Флет предпочтение)". Примеры можно видеть в статьях на сайте Gravitation Locked-in Ranges of the Month. Постараюсь до 2030 года добавить главу:) Stay tuned)
  • QUESTION: Здравствуй Том. Где можно посмотреть последние доступные отчеты? У меня с 29-03-2019 числа не показывает.
  • ANSWER: Привет, у Вас верно отображается. Отчеты были прекращены 29-30-2019 после 16 месяцев их ежедневной публикации, все неиспользованные оплаты были возвращены их владельцам. Отчеты возобновлены с 1 мая 2020 и появляются в свободном для ознакомления доступе спустя 7 дней после их публикации. Например, LRA Report за 1 мая будет доступен для скачивания 8 мая.
  • QUESTION: Вчера взял рекордную дневную прибыль на форексе благодаря LRA !! СПАСИБО ТОМ!!!
  • ANSWER: Спасибо за отзыв :)
  • QUESTION: Благодарствую, что запустил отчеты, очень хорошая новость, подскажи пожалуйста, будут ли включены так же уровни TP SL?
  • ANSWER: TPSL уровни не будут включены, частично информация о TPLS используется в отчетах в Preference в виде определенной цены. Вы можете самостоятельно выделять TPSL и скидывать сюда ссылки на скрины, где у Вас возникают сомнения.
  • QUESTION: Great book!!!Congratulations!!! And I want to ask about second release.When? :)
  • ANSWER: Thank you. Second release is available since October 2018 :)
  • QUESTION: Добрый день! Скажите, что такое L/R 1/3, L/R 2/3 и L/R 3/3? И в каком случае 1/3 переходит в 2/3 и в 3/3 ?
  • ANSWER: Глава книги 2.4 Распознавание и применение дисбаланса LR. TOI – Thinkable Open Interest. Предполагаемый открытый интерес в LR. Меняется только в сторону уменьшения.
  • QUESTION: Том, благодарю за Ваш труд. Только начал изучать Ваш анализ, есть вопросы. Подскажите по скрину. http://prntscr.com/na7p3y
  • ANSWER: Нет, Вы не правы по поводу GLR. В выделенном диапазоне первые бары с объемами являются преимущественно стоп-лоссами, а далее диапазон не имеет объемов, что видно по гистограмме снизу.
  • QUESTION: "Данный диапазон являлся GLR и исходя из Flat Preference" каким же тогда образом определить GLR или LR? При выходе из ренжа объемы были небольшие. В какой момент можно сделать вывод, что реализуется Flat Preference а не Trend Preference?
  • ANSWER: "Flat Preference а не Trend Preference" это и есть дилемма, которую Вы как трейдер решаете сами для себя. каждый по своему.
  • QUESTION: Исходя из анализа от 22-03-2019 CL, был диапазон заблокированных позиций бай, но при подходе к нему никакой реакции не последовало,а последующее движение отменило LR. Я правильно понимаю, что при подходе к LR нужно было входить в шорт? а при отмене LR нужно зафиксировать убыток? https://yadi.sk/i/dPgtq03gHop-_w
  • ANSWER: Данный диапазон являлся GLR и исходя из Flat Preference можно ждать возврата в него, соответственно когда LR отменился прибыль от позиции buy фиксируется, так как держать позицию дальше будет "на удачу". Прикладываю скрин с максимальным потенциальным профитом на 1 контракт, при выборе удачной точки входа -> https://prnt.sc/n5076m
  • QUESTION: Thank you for the book!
  • ANSWER: My pleasure
  • QUESTION: *****!! Удвоился за два дня на евре и австрале с риском 20%!!! +2700$! СПАСИБО!!!! Начал понимать рынок благодаря LRA
  • ANSWER: Аккуратнее с риском)
  • QUESTION: Здравствуйте! Как-раз закончил "изучать теорию" и завтра буду пробовать работать с графиками. С точки зрения обоснования метода - вроде все понятно, а практическое применение - вопросов по нюансам много, все не напишешь. Может после работы с графиками будет прояснение и "вырисуются" важные вопросы. А пока жду обещанный вебинар. Спасибо, с уважением
  • ANSWER: Пишите Ваши вопросы по нюансам по отдельности. Будем разбирать
  • QUESTION: Приветствую, вопрос такой по ES за 18 число последние дисбаланс был GLR а 19-го стал LRA из ходя каких данных он изменился?
  • ANSWER: Диапазон из GLR изменился на SLR (Support LR). LRA - анализ . По поведению цены за последние дни не было видно, чтобы по возможности (например ночная сессия) цена стремилась к нему. Значит скорей всего дисбаланс рассматриваемого LR не является ценоформирующим на данный момент.
  • QUESTION: Не понятно как использовать ваши LRA сигналы которые вы публикуете, пытался проверить на истории - так например файл 11 марта - а сигнал нарисован - на 15 дней назад, где найти инструкцию как пользоваться вашими сводками - тк я хочу проверить вашу подписку которая 25 долларов в месяц стоит
  • ANSWER: LRA или LRA Reports не являются торговыми сигналами. LRA - анализ для понимания дисбаланса открытого интереса, что позволяет торговать, основываясь на причинах и следствиях движения цены.
  • QUESTION: Какие книги помогли вам прийти до уровня профессионала? посоветуйте и мне пожалуйста
  • ANSWER: Не встречал книг полезных. Поэтому написал свою. LRA достаточно для прибыльной торговли. Остается только найти собственный метод торговли
  • QUESTION: Книга супер спасибо
  • ANSWER: Спасибо
  • QUESTION: Can I buy CL now?
  • ANSWER: No. There is no Locked-in Ranges. Undefined sentiment
  • QUESTION: thanks for you book. it is the best analysis I've ever used!
  • ANSWER: Thank you