Level II Trading

Quote from Steve Tvardek:

Amen!

I too find his writing style overly complicated. All I took from his post was a direct insult :D.

Until he can actually make an arguement against what I posted (instead of just saying I'm wrong), I'll pay him no mind.
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After watching what he's written over the years, he's seemed like he has a good track record in investing and possibly teaching others, and might have a genuine concern for helping others with his knoweldge, but I just find the tendency to meander without being direct or clear rather unhelpful. And in this instance, I think it's pretty obvious that bids/offers on Level II aren't really that useful in and of themselves.
 
Quote from Dogballoon:

I must admit, I find your writing style impenetrable. I also see no refutation of Steve's statements, with which I agree, just somewhat vague assertions that it is a myth and he is sitting on a branch.

If you could explicitly counter the notion that often firm bids lined up on Level II are meaningless, and that they can even be considered contrary indications, you would be saying something of more substance relevant to the question at hand.

Those of us who trade off of Level II tend to require a full picture of the action, rather than focusing on the bids/offers alone. This includes pulled bids/offers, quick spreads, changing size, how the ECNs behave around the spread, and especially the size and direction of prints, in conjunction with technical analysis: chart patterns, levels, pivot points, etc.
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Lets skip the wait until tomorrow.

You are definitely having difficulty understanding what I said here and in this thread in the few posts that I made.

There is a reason why the market moves the way it does folowing the status that gkadir observes.

For you, it goes against what you are doing in the market.

It is my belief that you are not going to make money if you continue to go against what happens in the market.

Level II does what gkakir observes. You see it and you trade against what happens.

I do not trade as you do; I trade opposite you in this case and I am trading in a profitable setting while you are trading in an unprofitable setting.

When I see an lot of bids sitting there at support, and I am observing the market and I am looking straight at what is causing the bids to get that way, I am also seeing what is going to be happening next by DIRECT observation of the trading situation in terms of market trading activity trade by trade.

You said above: "If you could explicitly counter the notion that often firm bids lined up on Level II are meaningless,...." I cannot counter that statement of yours. Everything that I see and that you see has meaning. When I see firm bids lined up on level II I give them credance and I share gkadir's view that what he observes is coming next is going to happen and I know that at least three people (you, steve, and FS) are there opposite me losing money being opposite me as you said you are.

You think the bids there mean one thing. I think that they mean something else and the market movement subsequently makes money for me and it loses money for you three guys.

You feel there is a question at hand. I feel that the market is "telegraphing" its direction and saying all aboard. The T&S confirms why the bid is getting to where it is and why the market goes opposite of what you think it does.

The market always follows the minority and this is a direct consequence of "market" orders being in control of the trading at the time that this occurs. This paragraph is applicable to both side of gkadir's comments. The minority always controls the market and whatever there is most of will not prevail.

I know I have to explain this to you in a couple of more ways and you will still fail to catch my drift.

I do not trade the way you, Steve and FS do. I am in the markets to front run you, which I do. I speculate and do not bet. You all are betters and you play the odds. I do not do entries and exits and you do. I am different in my orientation than you are and it is inconceivable to you that there is another way than yours. There are many other ways.

At the point that gkadir speaks of there are many people looking at the market. Think slowly and carefully about what a potential owner would be thinking about and considering for the bid situation mentioned. You mentioned the bids so I am coming over to where you are thinking and asking you to consider how a person not owning the instrument is sitting there looking at the situation.

What trading choices does he have? He wants it and the bid side is showing that it is getting deeper. He may look at the offers. He gets to a place where he finds out he is in the majority. He finds out a surprising thing. He can get it cheaper.

You do not believe this at all.

What is a front runner doing? What are you doing? You want to get it because you and Steve think gkadir is wrong and you both believe it. Or you own it and you think it is going to go up as explained by your telling gkadir he is wrong.

So far those who do not control the situation have their views known.

What do the owners, at support think? What do those who have been continually loosing think? What do those prudent people who have stops in think? They think that the bids are there and in a strong majority. Who is at the front of the bid line?

Is there anyone saying anything along the lines of "I don't like the trade I am in". Roughly everyone in the trade that has been in long for a while. What do those owners at the back of the line think?

As time passes who is making money that you are looking at? What side of the market are they on if there are any???? Are there more and more or less and less?

Who are the contrarians in this setting? Owners or potential buyers? lol....

You and Steve feel that gkadir is wrong and that what he says he observes doesn't happen. I observe it and I believe it and I am front running you guys.

Have you ever heard of people trading too soon. Do you see them appearing here in this scenario? What do they want to do to complete a profitable turn? What do those who trade better than them do at this point? Are they showing their plays?

I am asking you to now think about those who have their trades on now and that are short.

This may be getting even more impenetrable for you.

gkadir observes and gets confused because he expects the market to behave to have the preponderant bids make the market go up instead of, as he correctly observes, it goes down and confuses him. You think his observations of what happens are not the norm so you trade against him and what actually happens next.

Market orders prevail and in a way that drives the market down. The T &S is where you see it happen. Smart shorters are eaking out more bucks and a guy who wants to own long can get a better deal by waiting (not bidding when he sees a long list before his decision). Front runners are along way from reversing as well.

So people (owners) begin to cut and run as stops are approached or some pull them and set them looser.

A lot of people read Level II for formations. You don't.

This is the bad ending for a non- dominant traverse (left to right traverse) of a long trend where the price comes into the Trendline as a flat bottomed pennant. The pennant breaks out down on the trendline instead of reversing.

When you are trading short in a long trend (contrarian) this is a hold (do not buy back) longer part of being contrarian.

Anyone who is an edge trader will not be takng this trade on if they trade BO off trendlines. Why? They can't get in the trade.

You will be taking on the trade as a long and it will go against you even though you thought you got in cheaper than expected. Smart Shorts were leaving on dumb Longs stop out losses.

I won't do the offer side of the gkadir's observation; it is symmetric, in reasoning.
 
Quote from Dogballoon:

After watching what he's written over the years, he's seemed like he has a good track record in investing and possibly teaching others, and might have a genuine concern for helping others with his knoweldge, but I just find the tendency to meander without being direct or clear rather unhelpful. And in this instance, I think it's pretty obvious that bids/offers on Level II aren't really that useful in and of themselves.
More...

I tried to get five questions on the table for the thread originator as he was being faced with the wrong commentary. That was my approach.

Being direct and clear could possibly be found in a didactic approach. This could be true especially if a person is inclined to be methodical as was the thread originator.

Should I have just said: "You are describing a formation (pennant) that occurs on extremes of range where there is an impending range breakout." Followed by a list of leading indicators and their defaults. I conclude from what you say that I should have. Fine. That is a great solution. And it precludes the hunt part of learning.

You can tag me as a peculiar kind of lurker. I particularly like threads where the originator is contributuing by making a specific concern of his known and where he is seeking to build on a personal success (even though he, in this case, stated confusion). His success was seeing the nature of a sequence of events and he saw them in both long and short settings.

I gather that Steve does not want me to say he is wrong. I can avoid that with everyone. It is easily done. Staying on topic with something that is on the mark, by implication and inference, is also a way of assuring to readers when something else is wrong especially when it is an opposite conclusion.

I called the stuff presented by some as myth. Myths are not good to continue and, naturally, there is little that can be conveyed to deal with anyone stricken with one. This one was contagious and gkadir caught it too.

The inpenetrablness of my writing is not uncommon. It goes from inpenetrable to "unbelievable" to this guy is really hateful for 28 reasons to very very confusing to not being direct and clear to "maybe there is something there" to it takes five rereads to there is some dry humor to understanding it on the level where the reader resides to being marginally helpful to worth considering to trying out if I have nothing else to do to making the first dollar to getting that their are 8 doublings as a dim possibility to seeing others using it successfully to many many steps of further thinking about it to actually making software that verifies all the manual stuff to using the pieces as a whole to actually donnating some money to a cause.

So from this I concluded I better make a complete set of videos, put them in a model with accompanying drills and make it available to everyone free. I have to add documents of the transcriptions and illustrations. I need web sites and moderators and coders and information architects. It is amazing people can see the humor right off in the videos. So I am using a University part of this summer. lol..... It will be clear and direct pretty soon.

Get a spoon and wait a little.

What it doesn't turn out to be is incorrect or untried or unproven.

How to make something transferable and get as many people out there to be rich is the goal as I see it. I happen to know how to do that for a limited number and kind of people.

Making people rich is very important to me. Rich people fix things that are busted and need fixing. Rich people can tell and help others how to be rich.

Money is terrifically useful. There is an unlimited supply. Why be on the wrong side of the market through being "right" instead of being rich. "right" in quotes describes being wrong and not knowing it.
 
Good lord, quite the narrative.

Allow me to just clarify a few things.

There are times when a large bid is indicative of buying pressure. There are times when it is not, and is:

1. posted to encourage short term buying pressure to fill the dominant institution/specialist/trader who is selling, or
2. posted to be taken out by an institution whose order the specialist has been working on the long side for a previous move and wants to clean up the order in a final print, or
3. is a stale limit that has been sitting at a certain price for a long time, which is simply revealed by a declining market, or
4. is a fake limit order put in by annoying short term traders who want to push the stock up for whatever reason

I am using NYSE stocks in this case, because listed stocks are mainly what I trade. Your time frame for trading is likely longer than the original poster's or mine, thus you're not as concerned about the fluxuations appearing on Level II. I'm sure you have your own specific methodology for trading and that it is profitable and satisfying. We're simply referring to short term mechanics that appear on the T&S and Level II that are deceptive to the beginner, who usually gravitates toward scalping.
 
Good post, this is precisely the kind of stuff I was trying to convey as well.

Quote from Dogballoon:

Good lord, quite the narrative.

Allow me to just clarify a few things.

There are times when a large bid is indicative of buying pressure. There are times when it is not, and is:

1. posted to encourage short term buying pressure to fill the dominant institution/specialist/trader who is selling, or
2. posted to be taken out by an institution whose order the specialist has been working on the long side for a previous move and wants to clean up the order in a final print, or
3. is a stale limit that has been sitting at a certain price for a long time, which is simply revealed by a declining market, or
4. is a fake limit order put in by annoying short term traders who want to push the stock up for whatever reason

I am using NYSE stocks in this case, because listed stocks are mainly what I trade. Your time frame for trading is likely longer than the original poster's or mine, thus you're not as concerned about the fluxuations appearing on Level II. I'm sure you have your own specific methodology for trading and that it is profitable and satisfying. We're simply referring to short term mechanics that appear on the T&S and Level II that are deceptive to the beginner, who usually gravitates toward scalping.
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Quote from Steve Tvardek:

Amen!

I too find his writing style overly complicated. All I took from his post was the direct insult :D.

Until he can actually make an arguement against what I posted (instead of just saying I'm wrong), I'll pay him no mind.
More...

His holier than though bullshit may very well be the most annoying thing ive had to look at in my life, I have a headache just from trying to read this bullshit. And he thinks that he is creating some kind of prolific masterpiece when he writes, joke is on him cause by the time i get halfway through one of the posts I can no longer handle the annoying drivel, and have to move on.


Don't take it to heart Steve as I believe you have contributed a lot more valuable shit then he ever will, also I trade L2 exactly how you stated and I make tons of money doing it so I don't give a shit if its wrong cause it pays me well.
 
Quote from Dogballoon:

Good lord, quite the narrative.

Allow me to just clarify a few things.

There are times when a large bid is indicative of buying pressure. There are times when it is not, and is:

1. posted to encourage short term buying pressure to fill the dominant institution/specialist/trader who is selling, or
2. posted to be taken out by an institution whose order the specialist has been working on the long side for a previous move and wants to clean up the order in a final print, or
3. is a stale limit that has been sitting at a certain price for a long time, which is simply revealed by a declining market, or
4. is a fake limit order put in by annoying short term traders who want to push the stock up for whatever reason

I am using NYSE stocks in this case, because listed stocks are mainly what I trade. Your time frame for trading is likely longer than the original poster's or mine, thus you're not as concerned about the fluxuations appearing on Level II. I'm sure you have your own specific methodology for trading and that it is profitable and satisfying. We're simply referring to short term mechanics that appear on the T&S and Level II that are deceptive to the beginner, who usually gravitates toward scalping.
More...

What is nice about some techniques is that they have application over a range of considerations.

My comments relate to position trading real time market data for high Beta (3 or more) stocks that make 4 to 7 % per day during the hold periods. They also apply to intraday trading of futures commodities indexes where leading and lagging indexes are always being compared. Here the trading fractal is usually a 5 min chart and the leading indicator of the traded index is shown on a 2 minute chart.

The level II, T&S and DOM on five levels are not tied to any fractal.

With regard to level II, and T&S, I feel that there are several more levels of consideration than the four you mention. You have just provided four examples of situations rather than ways to examine, continually, the data stream and how to utilize what the stream means.

None of these four examples (except possibly 3) you gave will precipitate the gkadir observations and your examples are biased (3 of 4 for continuing the bid example further) and, necessarily, not comprehensive.

The quest that gkadir was dealing with was important because it occurred at support and resistance symmetrically. Further. its focus turns out to be a range breakout phenomena.

I better and better understand that ET is not the place to get into aspects of trading that are on topics that are engagements on refing performance through gaining effectiveness or additional efficiency.

It turns out gkadir's data is a powerful set at a trading location where home runs are hit. He was noting the run up to a range breakout and that is a common place where those who can hit home runs, hit them. Were a person noting his stuff and your examples wre there as well, they would be showing in much the same way as a person would see some haze when viewing the blue ridge mountains. Haze is important to know about and it enhances the view, but the money making part comes from other than the haze and acting upon it (I know you all don't). You act the opposite of gkadir and I go with his observations on the run up to range breakouts.
 
Quote from dwl603:

His holier than though bullshit may very well be the most annoying thing ive had to look at in my life, I have a headache just from trying to read this bullshit. And he thinks that he is creating some kind of prolific masterpiece when he writes, joke is on him cause by the time i get halfway through one of the posts I can no longer handle the annoying drivel, and have to move on.


Don't take it to heart Steve as I believe you have contributed a lot more valuable shit then he ever will, also I trade L2 exactly how you stated and I make tons of money doing it so I don't give a shit if its wrong cause it pays me well.
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I'm sorry if my posting offended you , Steve That was not my intention.

I have a strong view of a person being on the wrong side of range breakouts, particularly ahead of the BO. I know that you definitely and strongly protect yourself when you are on the wrong side of any trade if it ever comes to that. I do likewise.

I am always glued to the DOM as my fine control. These days it is nearly always true that there are games of many sorts being played on it concurrently. Most can be pieced out as separate identifiable interwoven sequences and assessed for what they are.
 
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