Markets perception of events - risk

N

NasiWarrior

The market trades at 10000 and you agree that this is fair value.

Then you see it bid at 10001 and 10002 gets hit on the offer.

It's quickly bid at 10004 and then 10005's trade in size.

The offers at 5 and 6 vanish ...but 5 isn't bid.

I want to sell. I don't want to hit the bid at 4.

I see a large offer at 7.

So my only option is to offer at either 5 or 6.

My Crux:

I feel very naked to offer my small size at 6.

How does the market perceive my offer ?
 
Are you still in high school?

The market doesn't care about you, your trade size, or anything else. It's faceless to you, and you to it.

The market is inorganic - it doesn't have higher-order consciousness and therefore doesn't have the means to "think" or "perceive". It just acts. It just is. Exactly the state you'll learn you'll need to be in if you survive long enough.

The market rapidly goes up, down, or sideways regardless of your participation.

Your aim is to figure out what you are trying to accomplish, and have the market act within the confines of your goal - your entry and your intended exit. If it doesn't, then you wait. Or you adjust. Or you adapt.

So why are you self-conscious about your trade size? You should be more concerned about your trading plan and ability (or lack thereof) to act decisively with well-reasoned intent.
 
blah12345678 has really pointed out the most important issues here.

I am just curious :
- why do you want to sell?
- why you do not want to buy?
- how do you know you should sell instead of buying?

- now why put a size 6, instead of a size 1 for instance?
- if you wanted to make people believe the price would fluctuate down, why not put at 6 and at 5 as well? why only put at 6?
- now what if the offer at 7 disappear after you put your 6 there? :D
- how do you know the offer at 7 might not disappear ? :D :D :D
 
Quote from NasiWarrior:

The market trades at 10000 and you agree that this is fair value.

Then you see it bid at 10001 and 10002 gets hit on the offer.

It's quickly bid at 10004 and then 10005's trade in size.

The offers at 5 and 6 vanish ...but 5 isn't bid.

I want to sell. I don't want to hit the bid at 4.

I see a large offer at 7.

So my only option is to offer at either 5 or 6.

My Crux:

I feel very naked to offer my small size at 6.

How does the market perceive my offer ?
More...
how many trade at that price 60,600,6000, you are seen as a number, 1 of ? contracts
 
Quote from blah12345678:


The market rapidly goes up, down, or sideways regardless of your participation.
More...


I disagree. The market is you, me and every other participant -bidding, offering, or taking liquidity.

Further... In a fast semi-illiquid market as I described in my first post; what happens at key levels define value and thus the levels that we compete at.

Quote from smallStops:



- now why put a size 6, instead of a size 1 for instance?/B]
More...




I mean offered at 10006 in small size.

Still I ask; How does the market view price competition at small size ?

 
The market sees your offer as the wrong price in the wrong direction.

Someone will lift you because statistically traders of your size are wrong.

They will be happy to see your offer.
 
there are vakue areas,at those points going up there are sellers waiting,going down,buyers waiting,when it gets there ,the number of buiyers vs sellers,whichever larger wins and we go thru the value area or reverse,there is a lot of lurching up and back on the way up,this is where the good scalpers make there living and the not so experienced get chopped up and feed the market
 
Quote from ammo:

there are vakue areas,at those points going up there are sellers waiting,going down,buyers waiting,when it gets there ,the number of buiyers vs sellers,whichever larger wins and we go thru the value area or reverse,there is a lot of lurching up and back on the way up,this is where the good scalpers make there living and the not so experienced get chopped up and feed the market
More...

With all due respect; I think that *everyone* who's got more than a hundred hours screen time already knows this.

Sure it's *so easy* to buy low and sell high... but it's not always the correct thing to do.

Personally I went through this:

1. Naive newb with forex account. Buy the high > get stopped out.
2. Buy Low / Sell high in various products > make some coin.
3. Buy Low > get stopped out.
4. Sell high > get stopped out.

5... Ok, So now I know the market more, how about doing the "newbie trade" but with a view of slicing the throats of the scalpers ?

I mean I really know where those scalpers have their stops because i know that trade myself!! haha.

Still it's hard to buy the high so you post on ET to try to consider it from different view points.
 
I posted something similar this in another thread and I think it's relevant to this thread

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Let's say that we can value a security at its last traded price of "v".

No one wants to quote this price but there is a two sided market either side.

Say, a possible next trade occurrence at v+1 has re-priced the market.

Further; that after either a +1 trade; another +1 trade occurs, so that we are now at +2.

Then; we have a two sided market at v+1 bid / v+3 offer.

Now; It seems to me that hitting the v+3 offer is the most aggressive way to trade the market. Selling at +2 (inside market) is wack. Bid at +1 is a good trade but not easy to get filled.

How can you explain an asymmetrical pay-off ratio like this?
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