Intuition Amplifiers 2

[MAESTRO]

Many traders would absolutely love to develop the "book reading skills". Unfortunately, for the most of us an ability to visually “read the book” is not obtainable. The overwhelming majority of us, “non-book readers”, definitely need some sort of an edge or “special glasses” to see what only 0.1% of all the traders in the world can see – Real Time Sentiment of Traders and their Intents imprinted within dynamic Order Books. Like an astronomer needs his powerful telescope to gaze at the darkest corners of our universe, we need something to enable us to see virtually “invisible” patterns of the Order Book. We need some equivalent of “market night goggles” - we need “Intuition Amplifiers”.

 

[MAESTRO]

Quote from frenchfry:

Proof it! And start with me. I can not read the tape.

Alright, I am up for a little experiment. Send me a PM and I will set you up for an experiment. One condition though; I need your commitment for about 3 weeks. And I need you to not say anything until the experiment is over. Then you can share you experiences anyway you like. However, until then I need you to keep it zipped. If it is acceptable then you should be able to use my “night goggles” to see what others can’t.
Cheers,
MAESTRO

 

[Xspurt]

Quote from MAESTRO:

SENTIMENT READING AND INTUITION AMPLIFICATION

Sentiment is a state of mind of an individual or a group of people that is a result of their perceptions, feelings and emotions. It directly influences our attitude toward something and promotes our opinions, actions and intents. Sentiment is responsible for the formation of our BIAS and it also underpins our Decision Making process. Sentiment manifests itself through the optimism or pessimism in financial markets, politics and our social lives. An ability to quantify, assess or measure sentiment enables us to anticipate or even predict future actions and intent thus helping us to make decisions and guide our own actions accordingly.

There have been many attempts to quantify the sentiment of traders. A ratio between the open interests of Puts and Calls is just one example of using quantitative data to measure traders’ sentiment. Another is the “Commitments of Traders” report issued by the CFTC (Commodities Trading Commission) which shows a breakdown of each Tuesday’s open interest in markets where at least 20 traders hold open positions equal to or above the commission’s specific reporting levels it has established. Of course creating a unit to objectively measure the sentiment and building the sentiment measuring scale are not easy tasks. As many subjects studied in Mathematical Psychology, sentiment is a multidimensional phenomenon that is extremely difficult to model. However, if we narrow down the scope of actions that we are trying to anticipate it creates the opportunity of quantifying the sentiment through those actions. This approach allows us to build indirect measurement scales to quantify the sentiment through the use of measuring units related only to those chosen actions. For example, if we only focus on buying and selling activities of traders their sentiment could be described as “bullish” or “bearish” thus creating the opportunity of quantifying it through the intensity of those actions. Overall, measuring the dynamics of the Order Book has been my approach to quantify traders’ sentiment. In turn, a quantified level of registered “Bullish” or “Bearish” sentiment is one of the most powerful tools for developing a reliable anticipation of upcoming price moves.

I think picking up on sentiment is one of the most important techniques in trading. Volume, CoT, Vix, Put Call Ratios etc. can be very useful but can require a lot of time to build up the required skill to master them. But as far as taking sentiment reading into the DOM in this high speed era is concerned, it's something I always wanted to do but never knew how to do it or where to start.

It was great in the "old days" of Lev II until the Ax caught on how traders were using him and he started to game the traders and then things got messy. I had fun when it was simple and learned a few tricks myself so I could game the Ax with size but now with HFT it's a game more for algo traders. I think it has evolved to the extent it is too complex and too fast.

Alex seems to be leading the fight back for the visual trader - very interesting indeed. Anyone here who considers themselves strong on modern tape reading like to comment?

 

[marketsurfer]

Quote from Xspurt:

I think picking up on sentiment is one of the most important techniques in trading. Volume, CoT, Vix, Put Call Ratios etc. can be very useful but can require a lot of time to build up the required skill to master them. But as far as taking sentiment reading into the DOM in this high speed era is concerned, it's something I always wanted to do but never knew how to do it or where to start.

It was great in the "old days" of Lev II until the Ax caught on how traders were using him and he started to game the traders and then things got messy. I had fun when it was simple and learned a few tricks myself so I could game the Ax with size but now with HFT it's a game more for algo traders. I think it has evolved to the extent it is too complex and too fast.

Alex seems to be leading the fight back for the visual trader - very interesting indeed. Anyone here who considers themselves strong on modern tape reading like to comment?

THere is no longer any need to learn how "read the tape"-- several commercially available programs will do this for you. Visual trading was finished in 2009/10--- surprised to see a few hold outs remaining.

 

[marketsurfer]

Quote from MAESTRO:

Many traders would absolutely love to develop the "book reading skills". Unfortunately, for the most of us an ability to visually “read the book” is not obtainable. The overwhelming majority of us, “non-book readers”, definitely need some sort of an edge or “special glasses” to see what only 0.1% of all the traders in the world can see – Real Time Sentiment of Traders and their Intents imprinted within dynamic Order Books. Like an astronomer needs his powerful telescope to gaze at the darkest corners of our universe, we need something to enable us to see virtually “invisible” patterns of the Order Book. We need some equivalent of “market night goggles” - we need “Intuition Amplifiers”.

www.jigjawtrading.com is just one example of an auto tape reader for the retail level--- tymorra pro had these back in 2005--- this is nothing new. Why mix in the human element in day trading?

surf

 

[MAESTRO]

I have been following Dr. Colin Camerer’s research for quite some time now. I have developed many of my ideas for the Intuition Amplifiers following his footsteps. I was thrilled to see that he was invited to the TEDs talks and presented one of his most fascinating findings. I urge you to watch this short video to understand better where I am coming from in terms of my IA development.

Cheers,

MAESTRO

http://www.ted.com/talks/colin_came...tm_medium=email&utm_content=image__2013-03-28

 

[MAESTRO]

Quote from marketsurfer:

THere is no longer any need to learn how "read the tape"-- several commercially available programs will do this for you. Visual trading was finished in 2009/10--- surprised to see a few hold outs remaining.

I respectfully disagree. The automated tape readers were designed using very limited rule base. Human brain is much more powerful. I have posted the video that speaks to it.

 

[MAESTRO]

Quote from marketsurfer:

www.jigjawtrading.com is just one example of an auto tape reader for the retail level--- tymorra pro had these back in 2005--- this is nothing new. Why mix in the human element in day trading?

surf

I had the best tape reader - Simon Posen - (one of the largest independent oil traders in the world) to test the power of one of my IA based systems and he admits that it enhances his tape reading ability quite significantly.

 

[ammo]

Quote from Xspurt:

I think picking up on sentiment is one of the most important techniques in trading. Volume, CoT, Vix, Put Call Ratios etc. can be very useful but can require a lot of time to build up the required skill to master them. But as far as taking sentiment reading into the DOM in this high speed era is concerned, it's something I always wanted to do but never knew how to do it or where to start.

It was great in the "old days" of Lev II until the Ax caught on how traders were using him and he started to game the traders and then things got messy. I had fun when it was simple and learned a few tricks myself so I could game the Ax with size but now with HFT it's a game more for algo traders. I think it has evolved to the extent it is too complex and too fast.

Alex seems to be leading the fight back for the visual trader - very interesting indeed. Anyone here who considers themselves strong on modern tape reading like to comment?

spectre posts here and is one of the best i have witnessed, he put a video on here a few years ago of the dom and his orders up and down the buy/ sell sides and worked a position long and short getting in and out ,then re adding on both sides.don't know where that is ,but i did see it here on ET,handle 123 is also great at reading the dom

 

[Xspurt]

Thanks surf and Ammo, I'll follow up on those over the w/e.

I had a look at a few videos of Jigsaw but my charts are more advanced than what I have seen so far but it's too early to draw any conclusions. I designed my own volume charts and what I saw of Jigsaw (so far) was much the same as what good Lev II traders did 10 years back. You can alarm T&S for big trades and do all kinds of displays for chart volume but what I want to do is crack the HFT guys screwing up the order book. That is way too fast for what I saw on Jigsaw.

One important point is that looking at that Jigsaw Dom would turn me into a zombie after a few hrs. I think I saw a beautiful girl in a red dress.. or was that the Matrix?

Anyone using Jigsaw?