Trading dont match with reality

I only posted this because my past self would have liked to hear this(i translated it with google).

I know you’re all emotionally involved in this, and telling the truth may not help when you didn’t even bother to read Trading and Exchanges (Larry Harris), let alone Algorithmic Trading & DMA (Barry Johnson) or Inside the Black Box (Rishi Narang). In the end, a simple explanation that you understand will end up serving as a ‘refutation,’ and I’ll be the one having to argue against everyone. I don’t know if I’ll feel like doing that. Didn’t any of this spark your interest? How about stopping the study of ready-made setups and actually reading about how the market really works?(Its a good ideia read wyckoff too, and not, wyckoff is not modern price action)

Price moves by execution, not by opinion. What you see on the chart can be:

Hedge: A bank selling now just to protect a billion-dollar purchase made in another country. They accept “losing” on the trade in order to gain on the hedge.

Arbitrage: Machines correcting cent-level distortions between assets in milliseconds (forex, for example).

Rebalancing: A fund selling because its mandate forces it to reduce risk, even if the scenario is bullish.

Algorithms: Robots slicing gigantic orders into tiny pieces to hide the footprint (so that no one can take advantage and try to automate thousands of robots to profit from the movements). (No one cares about the chart; either value comes in or they are forced to do certain things.)

Conclusion: You try to find an “up/down logic” in movements that are just financial bureaucracy and order cleanup. Any real “trading” opportunity (the market was not made for this) would be automated, and there would be no room left for the retail trader without structure (which represents about 15% of the market and is therefore irrelevant on the chart).

● Price action: Charts have no emotion because there are no people caring about them or actively trading behind them, and when there is, it is a liquidity-providing fund so that giant orders can be fragmented and masked, preventing the price from exploding against them and preventing anyone from exploiting it with any strategy (candles are just footprints).

● Tape reading: They want to follow the big players but do not know what they want or who is behind it, and they will not follow them because HFTs mask flow with fake orders precisely so they cannot be followed. Otherwise, this would be automated by other HFTs and impossible for a human to trade (it is these people’s job to program them, study the market… in a zero-sum game you must always stay ahead).

● SMC / ICT: They do not read anything; it is all post-fact narrative with vague concepts that fit anything (besides the fact that stops only become liquidity because they happened to be in the way). If it worked, it would not be sold in courses, because it would stop working the moment many people tried to trade it (even if you and your group are irrelevant, institutions would have to make it stop working so that those with structure would not automate it).

● Technical analysis + indicators: The same thing as trying to drive a car looking only at the rear-view mirror. The market does not respect chart patterns it does not care about; it only wants to execute specific orders. And give up on “objective” technical analysis, because just because a coin landed heads nine times does not mean the chance of heads is higher than tails. They searched and searched for a pattern until they found one that only formed by randomness (zero guarantee it would keep happening). What worked yesterday changes because someone noticed it. The only ones who were actually traders in the financial market were the dealers.

“But why do brokers run trading tournaments and interview supposed traders?”

Because they live off brokerage fees; they want you trading. I do not think it is necessary to talk about specific types of trades because they already fall under what I said above. It is easy to believe in this kind of thing because, to not fall for it, you would need to study market microstructure to understand how the continuous auction works and why prices move because for every buy there must be a sell (price does not go up because there are more buyers than sellers, nor go down for the opposite reason).

Who profits from traders are brokers and course sellers. Those who study market microstructure (how orders are matched, how the continuous auction works, why price moves, the role and origin of liquidity) do not become traders. Wealth is not churned, it is accumulated, and money comes from your work or from those who work for you.

What I used to do in the past was more or less this: What I seek is to trade when the execution is still alive: large orders still being fragmented, partial urgency, unresolved imbalance, and price moving because there is not enough counterparty at that moment. I enter in the middle of the process, not at the end, accepting that continuity can die at any moment and that my role is to react, not predict, leaving quickly when the flow loses strength. My edge comes from agility, acceptance of uncertainty, and risk control, not from patterns or narratives. For this, it makes sense to work mainly in medium timeframes, approximately between 10 minutes and 1 hour, which still capture active execution; very short timeframes (seconds up to 1–2 minutes) should be avoided because they force anticipation and algorithmic competition; very long timeframes (4 hours or more) are conceptually still valid, but already show the aggregated result of the execution and go beyond the strategy I want to follow.

There was no setup, there was no target (imagine me regressing to find that candles represent something or operate a setup)… of course, before that I thought about trading like an institutional / guessing, but you cannot know who is behind it nor what they want in life (whether it is arbitrage, hedge, rotation, directional or neutral order, whether it has already started or is ending).

What I paid attention to was: Price moves with little volume therefore: liquidity vacuum Price does not move despite high volume therefore: absorption Breaks and continues without pullback therefore: execution urgency Breaks and quickly returns therefore: liquidity collected, flow died And all of this is just effects of execution, not intentions. I had felt so smart, it was an approach that did not depend on: economic regime trend or range interest rate cycle “good or bad market” behavior of the retail trader The strategy relied on something invariant: Large orders need to be executed and large execution leaves a trace. As long as there exists: continuous auction order fragmentation market impact size asymmetry the phenomenon exists (regardless of the retail trader I cared so much about in the past). But because of HFTs it would not work, if it did it would be by pure chance of fate, work of more than one institution behind it and not a specific one that made a mistake.