Why do these insights matter?
Because they allow us to make more informed trades and to optimize the timing of trades. They create a discipline that gives structure to our trading models and reduces risk.
Market participants are different. To anticipate disconnects between buyers and sellers (discontinuities in liquidity and, therefore, pricing), the likely responses of these different players to price changes and other events must be analyzed discretely.
Conventional analysis is too coarse-grained to reveal anything other than large-scale trends that are speculative and unreliable.
Olsen uses signals that appear only in high-resolution analysis but whose effects are known to determine prices.
Every trade leaves a footprint; managing risk is about reading this path.
Pricing flows originate in momentary micro-bursts of volatility that kill liquidity and displace pricing.
The better you can gauge this displacement, the smarter your next positions.
What we know
The trading behavior over time of diverse market participants assumes characteristic patterns.
When analyzed at different time scales, these trading patterns suggest price patterns that are invisible to conventional analysis.
Markets can, at the same time, be apparently efficient but to some extent predictable.