Short Covering Rally - "P" Profile

jficquette · May 20, 2009

Quote from DocSamson:

Thanks nazzdack,

I would like to understand what "aggressive" means in a quantitative sense, such that it leads to higher prices.

Correct any of the following if it is incorrect:

Since every trade consists of one buyer and one seller, does "aggressive" buying mean that there are MORE POTENTIAL buyers than POTENTIAL sellers?

Would the situation be akin to a housing market in which there are more people wishing to purchase homes (buyers) than people wanting to sell their homes (sellers), in which case the sellers can raise prices?

Thank you all.

DocSamson

There is one contract bought for every contract sold but the number of buyers and sellers are not equal.

tom438 · May 23, 2009

Quote from jficquette:

There is one contract bought for every contract sold but the number of buyers and sellers are not equal.

Very Succinct Jficquette,

According to auction theory, futures Trading is an auction process. If there are more buyers than sellers aggressively entering the market (using market orders) - the market will rise until a level of equilibrium or balance occurs. The converse when the market goes down.

If you have a good, unbundled data feed you can chart exactly how much buying and selling is occurring at each price.

IMO - MarketDelta footprint is the best charting platform for this.

Tom438

jficquette · May 23, 2009

Quote from tom438:

Very Succinct Jficquette,

According to auction theory, futures Trading is an auction process. If there are more buyers than sellers aggressively entering the market (using market orders) - the market will rise until a level of equilibrium or balance occurs. The converse when the market goes down.

If you have a good, unbundled data feed you can chart exactly how much buying and selling is occurring at each price.

IMO - MarketDelta footprint is the best charting platform for this.

Tom438

I trialed MarketDelta and liked it. The guy who runs it is a nice guy was very helpful. I have all my stuff set up in tradestation and am pretty much locked into it.

Actually, I think you can get an indicator to run on tradestation that mimics MarketDelta. Seem like I saw it on in one of the support forums.

John