Active DOM traders

[MrMuppet]

And I don't want my comments to become a pissing contest and a dick-to-dick match, as it is common on ET. That is why I gave up on my one and only Thread on ET! Maybe I should not have taken the bait when I saw "Active DOM traders"! I have been doing this long enough to get a paycheck from the market every single Friday (yes, profitable every single week, and yes, outgoing wire every single Friday!). Beats the hell out of years and years of "incoming wires", and having a day job to pay for it all! We all have been there ....

Congrats to your success, I know it's been a long way till you made it, your thread is from 2011...

So of course it can be done, since algos are 90% relative value bots that trade one asset against another. It became more difficult to spot the natural buyers in these markets, but once you get the hang out of it, it's easier to trade against bots than to trade against humans.

 

[Fonz]

Yes it can be done. And it can be taught!
https://www.krechendo-trading.fr/ (It will be easier if you speak French)
They actually teach different methods and also DOM trading. These guys used to post on YouTube, until they opened a Hedge Fund in Luxembourg.
I think they are in London, also.

This is very impressive to me and.. so far from what I do. There are so few different way to make money short term and so many to lose.

Thank you ScalperTrader, you gave me the opportunity to read your thread.
Good trades!

 

[MichalTr]

Hello @ScalperTrader ,

How in your opinion the markets changed during last years, when it comes to dom reading ? And does it influenced your trading ? I have my own observations, especially when it comes to yield outright and spreads, but I'm interested in other's point of view.

And another question - I know your thread and I remember that there was the topic of your position sizes inside of this thread. So, do you still trade small positions and you are happy with it, or you increased it since that time ? I't been a long time.

 

[ScalperTrader]

As the saying goes, Size Matters! No pun intended, but to me, it's still about trading a small account, trading small size, and making sure that the profits come out of the account consistently every Friday! Hey, whatever you want to call it, that's part of my edge combined with how I trade off the DOM! I have buddies who we've been trading for over 15 years who open ES positions with 50 lots and have tried to help me psychologically to size up, but I still refuse to do it and to throw off the ultimate balance I have achieved in my trading! With ranges and volatility these days, a scalp is perhaps defined as 20 to 40 ticks! Another thing that has changed for me is that I used to think all the talk about co-locations, latency, etc. matters - heck, I paid $750 for my X_Trader license every month for 9 years - what a crock of shit that was! I am now using a free platform with no chart fees or anything - yet I am more profitable than I have ever been! Let's not get side-tracked and off topic, and I certainly do not want to intrude on someone else's Thread. Believe me, I am probably the dumbest trader (and probably much older than you all think) to have taken me the loooooooongest time than anyone out there to learn this stuff - but you have no idea how much joy it gives me to be profitable every week, and to let everyone and their mother and aunt who talks markets these days know that, yeah, you can make 4% to 10% on your account every day - Priceless!

 

[MichalTr]

As the saying goes, Size Matters! No pun intended, but to me, it's still about trading a small account, trading small size, and making sure that the profits come out of the account consistently every Friday! Hey, whatever you want to call it, that's part of my edge combined with how I trade off the DOM! I have buddies who we've been trading for over 15 years who open ES positions with 50 lots and have tried to help me psychologically to size up, but I still refuse to do it and to throw off the ultimate balance I have achieved in my trading! With ranges and volatility these days, a scalp is perhaps defined as 20 to 40 ticks! Another thing that has changed for me is that I used to think all the talk about co-locations, latency, etc. matters - heck, I paid $750 for my X_Trader license every month for 9 years - what a crock of shit that was! I am now using a free platform with no chart fees or anything - yet I am more profitable than I have ever been! Let's not get side-tracked and off topic, and I certainly do not want to intrude on someone else's Thread. Believe me, I am probably the dumbest trader (and probably much older than you all think) to have taken me the loooooooongest time than anyone out there to learn this stuff - but you have no idea how much joy it gives me to be profitable every week, and to let everyone and their mother and aunt who talks markets these days know that, yeah, you can make 4% to 10% on your account every day - Priceless!

So changes in liquidity or volatility don't affect you at all ? I'm asking because I know guys (typical dom traders), who lost their edge, or were forced to change to other instruments etc. And that's because of different markets behavior over time, different influence of intermarket algos etc.

I think that kind of discussion is very related to the topic of this thread, and can be valuable for OP also.

 

[ScalperTrader]

Nothing has changed much, especially with liquid markets like ES, 6E, etc. Listen, it's all the same! I don't know the difference between soybeans and kidney beans, but yet I trade ZS once in a while on crop report days, and the same exact shenanigans go on the DOM as any other instrument! Same with CL inventory and NG storage reports on Wed. and Thurs., respectively, which I trade those instruments - same thing! What do I know anything crude and natural gas? Nothing! But you put 'em on a DOM, now we are talking! I don't want people to think this is easy, but it's like learning to speak a new language - once you are fluent, you can dream in that language! Once you learn the DOM/size/algo language, you never look at trading the same way again.

 

[Space Alchemist]

Which brokers / order routing would you recommend for minimal slippage?

you’re oblivious to the fact that your discount broker requires at least two additional exchange ECN messages per trade. Even when they advertise “collocated servers” {that’s the Direct Clearing Member your discount broker uses BTW}. {{To translate: your orders are getting routed to two different geographical locations before they get routed to the exchange}}. [if you’re using a discount broker, your order is getting two credit checks before it reaches the exchange server]

So you save 50 cents per RT but the super high speed direct clearing ECN Algos drain you for $12.50 in slippage. Moral victory?

 

[Sekiyo]

I don't think you will find an edge in trading the DOM if your target is to make 10-20 points on a trade.

All information out there that i have read about trading the DOM is about scalping for ticks.

I agree.
Tape reading is short term trading.
Depends on the volatility and the interactions,
But currently on the ES you can go for a couples of ticks.

Someting like 1 or 2 points is doable.
The price can spike up 20+ points but usually ...
You get out when you see adversity and skip the battle.

You might use the DOM to perfect your entries,
But it's still a skill to master. Needs lot of practice.
(Re)Watching playbacks, looking for patterns and practicing.

 

[Sekiyo]

So changes in liquidity or volatility don't affect you at all ? I'm asking because I know guys (typical dom traders), who lost their edge, or were forced to change to other instruments etc. And that's because of different markets behavior over time, different influence of intermarket algos etc.

I think that kind of discussion is very related to the topic of this thread, and can be valuable for OP also.

The basics stay the same.
It's just another variation of the same principles.
Might be tougher to follow an illiquid (volatile) market,
But the technology has made it possible to follow the interactions.

Usually flow trader follow financials only.
They trade differently but ... They also trade the same.
And with the technology there's no excuse to not trade more volatile products.

Currently I trade ZN, ZB, CL, GC and ES
Might add RTY for ES correlation.

You can highlight or even get an alert for XYZ event nowadays.
You can see the historical prints, the historical depth.

They Whys and the Hows of market dynamics stay the same. Let it be liquid or not.

 

[birdman]

I don't want people to think this is easy, but it's like learning to speak a new language - once you are fluent, you can dream in that language! Once you learn the DOM/size/algo language, you never look at trading the same way again.

Hey ScalperTrader ... fascinating insight you have shared ... my hat's off to ya!

Let me ask ... what do you think of (as at least some suggest) that a person should delete the ask offers /bid offers columns and only focus on "Time Price Size".

Would that approach be limiting or beneficial, to your process? What am i giving up if i go that streamlined route?