Market Depth patterns

stfreak,

Thanks for making your comments; especially the comparison by way of poker that you do.

People are different in their sensory preferences to be sure.


When I look at the scene in the way that I do, I see it as a continuous process. The poker seems to be more of a series of hands to me. Sort of like batch after batch of happenings.

I could never visualize that as a way to visualize it.

I guess the major difference is whether or not a person trades by hold/ reverse or entry/exit. The entry/exit is more attuned to edge trading and the hold/reverse relates more to staying on the right side of the market.

For me having pictures of market better shows me which side is the right side and that is not a gamble for me. I also depend on signals that more or less flow, continually, ahead of price. I think of signals as being there or not there and I do not think of signals as being just blips although their advent does happen as they switch on. I do have names for the advent of some things.

In poker, the folding and waiting for another hand is something I consider as important. It is a loss of time during the RTH's. I cannot find a way to justify being on the sidelines during price change. Sidelining cuts back on my effectiveness and efficiency.

From what you say, it may be possible that you scale in and then just take the chips at some point. I observe the flow of trading all the time and I am not observing this phenomena as a distict one. Do you observe it? And to you see your self sitting in a particular position around the table relative to the other poker players?

Anyway, both of us use market depth to great advantage it appears.

TIA
 
Vulnerability has entered the picture. Is this a time bound consideration?

Menaing is it something that ebbs and flows as time passes for a trader who is in the market?

I just do not look at being in the market over time as having a vulnerability factor. I know ability is part of the word, but I am not getting through figuring out how to put myself in the shoes of someone who is experiencing or observing vulnerability.

TIA.
 
hi jack,

observing vulnerability is not as difficult as one might think.

Just think of yourself being in a position, that doesn´t work the way you intended: what do you feel?
If you have an edge, of course you feel nothing. you trade out and go ahead.

If you don´t have an edge, emotions kick in and you feel your pulse accelerating.

So when you can spot people entering positions, because the situation is so obvious (breakout of a narrow range), you know how they feel, when their trades don´t work.

by knowing your own feelings, you know the emotions of others and...may be that sounds not nice...you can put some salt directly into their wounds.

practically, just watch someone entering a position being just too large for the current market liquidity and check, how others react upon this.

I know, I always talk about setups and situations, that cannot be quantified, but I by analyzing my own emotions, I learned alot about the feelings of others and how the herd reacts to certain feelings. All I need now, is a catalyst that brings myself into the emotional status of the herd. the thinking is like: how would I feel, if I had a long position here. I go short, when I see something, that usually would scare me out of this position.

It´s very weird to trade like this, because it´s not like watching the market but like observing myself how I watch the market.
 
Quote from stfreak:

hi jack,

observing vulnerability is not as difficult as one might think.

Just think of yourself being in a position, that doesn´t work the way you intended: what do you feel?
If you have an edge, of course you feel nothing. you trade out and go ahead.

If you don´t have an edge, emotions kick in and you feel your pulse accelerating.

So when you can spot people entering positions, because the situation is so obvious (breakout of a narrow range), you know how they feel, when their trades don´t work.

by knowing your own feelings, you know the emotions of others and...may be that sounds not nice...you can put some salt directly into their wounds.

practically, just watch someone entering a position being just too large for the current market liquidity and check, how others react upon this.

I know, I always talk about setups and situations, that cannot be quantified, but I by analyzing my own emotions, I learned alot about the feelings of others and how the herd reacts to certain feelings. All I need now, is a catalyst that brings myself into the emotional status of the herd. the thinking is like: how would I feel, if I had a long position here. I go short, when I see something, that usually would scare me out of this position.

It´s very weird to trade like this, because it´s not like watching the market but like observing myself how I watch the market.
More...

Thank you for responding.

You make several points. by giving examples of market direction and market capacity, it affords all of us a sense of how you see it is in terms of vulnerability.

You associate it with decions made, then time passing and finally a realization coming into the mind of the trader. THen at that point he "feels" vulnerability.

It turns out that because we have different trading orientations, and I see that, that it is probably up to me to take on your orientation and "see" how it would feel.

I am looking ahead on some materials I am providing. As those that I work with go down a path, they add more to their quiver and it is always an issue as performance (effectiveness and efficiency) grows for them to retain their initial perspective. and add to it rather than drop the initial perspective and just add a partial new one focussed on the scene that is new to them.

It has always been important to me to not introduce a lot of the "fear creating" types of trading while going from a novice to another level.

I keep the "eye on the ball" first understood and slip more money making in between the beginning and end of their initial segments.

The first additional stage of this is to get the anti-whipsaw into the picture. I hate to use the word whipsaw with a negative modifier but this is just a comment here.

It seems that when a person has the fist basic level of making money down, stuffing more opportunities in between is the natural alternative for having vulnerability occur.

You do not get to vulnerability when you are doing actions that are preconceived on a basis where the correction (antiwhipsaw), if any, is profitable.

I think the two moduses, yours and mine, being different that it just may be inherent in skill development that vulnerability doesn't get on the table in some cases.

I have more work to do to get this factor in a better perspective. Thank you for your comments.
 
Jack

Thanks again for your wonderful posts (by the way your writing is a lot more concise than it used to be).

Regarding anti-whipsaw - one would only take profits if they were right in their estimation of direction, and then that direction changed.

If, however, one's leading indicators of price indicated a turn of price upwards, and one went long, then some news item or large order caused a sudden decline, then to correct and adjust one's position to the short side would involve taking a loss at that time. Right?
 
Lets not let this thread die for another 2 years.

Heres a interesting shot from todays market depth, dang my order could not get filled on the lows. :D
 

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hi everyone

i found it very useful for all the comments each of you post. I learn a lot from it and i will stop my flattering...

my question is, is there any commerical software out there who can capture the DOM, deposit and cancelling of orders, and T&S so that i can record them and playback later for studies, without my to do the coding myself?

Thanks in advance

clayton
 
ok, we are 4 years later since the beginning of this thread. Meanwhile we had a real estate crisis, credit crisis, a number of bailouts, and many big players pushed out of the mkts.

How the market depth patterns changed during the last year?
 
I've spent a few months using the DOM on X_Trader, while I think that the years I've spent researching technical analysis and inter-market relationships was great it seems that learning to read and understand the tape and book has been more rewarding. Sure you notice where buying and selling takes place...at the offer...at the bid....etc. You start seeing things with the book and THEN YOU GET A PHONE CALL from a trader buddy who tells you that you should quit looking at the dom and start looking at Market Delta because the Bid & Offer information are already there... After reading this thread it's apparent to me that there are some real traders in here making their living from the markets. So I ask you... have you looked at market delta vs trading with the dom and do you use it or both? Is market delta just another "TOY"?
 
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