Question for Intraday ES Traders

C

clearinghouse

I don't trade the ES, I just read blogs of ES traders and paper trade it for fun.

I've been observing the "personality" of ES and noticing how it changes on some days vs. other days, and I noticed that sometimes (on the tape) there'll be a large trade (or set of trades) one way, followed by a sudden reversal the other way with even more (2x) volume, and that these reversals happen more frequently on some days than others. And if I were to venture a guess on when it happens most, it's on days where the market trends more.

Again, I don't trade the ES, but I watch it. However, my data quality isn't so great. Can someone who looks more closely at ES tell me what exactly is happening? Is it likely just two different players battling it out, or someone trying to sucker small traders into a trap and then punch them all in the face?

Are my observations just illusions from having a crappy data program, or is this real?
 
Small bursts of activity like this happen for various reasons, and there are many possibilities:

-HFT sees the book evaporating and tries to push it
-A large institution buys medium numbers of basket stocks pushing their prices up/around easily and thus the index gets a little confused/bumpy.
-Number of different participants disagree on which way the market is trending and both exhibit a tough push in their own directions. This happens mostly with algos - some are seeing a trend breakout, some a resistance/support confirmation based on their parameters.
-A small push in one direction triggers lots of stops. HFT sees them as stops and reverses the move to re-establish a trend channel.
-Random chance: this is an important one

Why would you be concerned about such moves? They're just part of the markets, and you need to observe them like you would an animal in the wild.
 
You'd see that most on choppy days. Apart from strongly trending days, rangebound days can be choppy at times.

Whatever time frame chart you use, look at the ATR. If the number is higher than usual and the market is not trending strongly, it simply means you are getting more movement within each bar.

Today's price action after the down move from 1249.75 to 1234.50 has been pretty choppy. Still, it is really peaceful compared to early August.
 
Quote from braincell:

Small bursts of activity like this happen for various reasons, and there are many possibilities:

-HFT sees the book evaporating and tries to push it
-A large institution buys medium numbers of basket stocks pushing their prices up/around easily and thus the index gets a little confused/bumpy.
-Number of different participants disagree on which way the market is trending and both exhibit a tough push in their own directions. This happens mostly with algos - some are seeing a trend breakout, some a resistance/support confirmation based on their parameters.
-Random chance: this is an important one

Why would you be concerned about such moves? They're just part of the markets, and you need to observe them like you would an animal in the wild.
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The first reason is that I guess I'm curious as to why so many disagreements would happen on some days vs. others. Some days it's like everyone agrees, and other days, there are rather violent clashes from difference of opinion, and I don't understand why there'd be so much dissent clustered so closely on some days vs. others.

The second reason is that it could just be chance, but I'm led to believe that in a lot of cases, it's deliberate and related to some "big picture" activity I'm not conscious of in my limited analysis.
 
Quote from clearinghouse:

Some days it's like everyone agrees, and other days, there are rather violent clashes from difference of opinion, and I don't understand why there'd be so much dissent clustered so closely on some days vs. others.
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Markets have been headline driven lately. Some announcement about Greece or the Eurozone can send global markets hurtling in one direction.
 
Quote from clearinghouse:



Is it likely just two different players battling it out, or someone trying to sucker small traders into a trap and then punch them all in the face?

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we are the small game,the idea is to trap us and take our money,it's a jungle out there since the beginning of time,like a rabbit,the idea is to survive and avoid predators
 
mkt is nuttier and faster moving than ever. impossible to get an edge vs the co located bots. easy $ non existent.

if you think other wise, prove it.
 
I'm developing my own bot for a while and I can tell you, I see those things happen mostly when it's hard to tell if a trend is being broken out or confirmed. Sometimes my own system gets confused around those points. It's primarily driven by computer analysis. It's quite simple really: there is a small difference in how each of the bots operate or rather how they detect and identify trends (support/resistance). That small difference decides on what the tipping point is at periods of uncertainty (price cannot be figured out what it's doing quite so easily). Then, it's a battle of the bots more than anything else. However keep this in mind, most of those are created by drawing out Trend Channels and trend lines that a human would draw, so sometimes, human interaction by discretionary traders contributes also. Some firms use semi-automation where the signals are plotted and explained on screen, and then traders filter them out a bit. So it's a bit of both, humans and computers and everything in between battling it out.
 
Quote from stock777:

mkt is nuttier and faster moving than ever. impossible to get an edge vs the co located bots. easy $ non existent.

if you think other wise, prove it.
More...

I don't think I have an edge against the bots, that's why I paper trade ES. It's too efficient for me to gain a foothold in as a retail trader.
 
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