Hello They,
Thank you for sharing the chart.. Many people will hide what they are doing.
Frictionless scenario. Great term and Explanation of movement out of the POC.
I will save this chart and study your concept.
Regards
Greg
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Trading based on bid/ask (image)
- Thread starter 1a2b3cppp
- Start date
Hello They,
Thank you for sharing the chart.. Many people will hide what they are doing.
Frictionless scenario. Great term and Explanation of movement out of the POC.
I will save this chart and study your concept.
Regards
Greg
Impulse moves from the POC will almost always show themselves via micro range expansion caused by one side or the other pulling their bids/offers. An increase in velocity of volume will also be there as a tell.
I didn't put volume velocity on this chart but you can see clearly that after the IB the first time volume had, what I like to call, a frictionless scenario, the market never returned to that price level. The previous small range bar was also the slowest volume of the day up to that time which is generally the precursor to a tradeable move.
View attachment 189334
Can you discuss volume velocity concept?
It is what it is....
Trade Volume has a speed in which it transacts. You can observe it easily using constant volume bars. From your observations some questions might form in your mind possibly bringing yourself to a hypothesis. Because the volume bar's speed and range is measurable you can test your hypothesis and come to a conclusion if it is tradeable for you or not.
...increasing velocity of volume, decreasing velocity of volume, velocity of volume above or below a certain threshold at market defined levels (Yesterday's HLC & POC, Todays OHL, POC & VA) are some ideas if you are interested.
Trade Volume has a speed in which it transacts. You can observe it easily using constant volume bars. From your observations some questions might form in your mind possibly bringing yourself to a hypothesis. Because the volume bar's speed and range is measurable you can test your hypothesis and come to a conclusion if it is tradeable for you or not.
...increasing velocity of volume, decreasing velocity of volume, velocity of volume above or below a certain threshold at market defined levels (Yesterday's HLC & POC, Todays OHL, POC & VA) are some ideas if you are interested.
I'm not sure I agree with your premise that large orders attract price. More likely, (as I believe Mark hinted), they are used to do the opposite. In any case, how would you trade it? Let's say you see large order on the bids, would you short by hitting the bid and wait for the price to move down to that order? How many ticks away does that order need to be from the ask(actually I was not clear if you are only checking top bid/ask sizes or multiple levels of depth)? What if that order goes away, do you immediately cover at the ask? I think this kind of strategy was used long time ago pre-hft and pre-anti-spoof rules.
I usually don't comment, but to sum up what you are hypothetically asking about what to do if a large order comes down and how many ticks is pretty much asking how to trade or at least trade that style and what strategy and plan to have w/ X number of ticks etc...
If all of sudden its "1,1,2,3,1,500,1" on the es thats a very simple scalp and obvious one, then another easy example of why large orders matter is b/c it and or the trader is a market maker and in general orders are what moves the market, then when your buying highs on daily highs and shorting the lows the bigger the orders as it shoots up and up when an instrument busts through its daily high the more "big" orders or we can just call it volume even though if people are placing big orders it is confirming the momentum on the trade. Large orders matter a lot, or at least they are a big sign and the order is large for a reason and even if its a fluke large order it can still start a rally, write an algo where when a an order x % larger then the daly avg order comes through and you buy it if its a long order and short if large sell and in the algo have an OSO up 5 ticks, you will do just fine. That is one of the 1st I wrote for the hedge fund i own and I still use a version of it. Now doesn't mean you have to trade it as it is more stressful trading. that is 1 reason why companies are coming out with special DOM only platforms that are basically super doms like jigsaw, bookmap- it takes a long time of trading well- but to be able to only look at a dom and trade is the most secure accurate trading i've ever done in my career, problem is it took so long to be able to do that which part of it is knowing the instrument so well and how it moves b/c you've traded 1000 rounds/day for 14 years in it.
Large orders means big money and people make large order big money trades not for no reason, so large orders I would keep my I on them.
When the markets tumble you see large orders
You see large orders only when something is going on.
Watch out for the spoofing though
JIgsaw is by no means useless, there is a reason only the best traders even know how to read it, theres no dom out there in the same boat especially for several thousand dollars. Jigsaw takes a lot to understand it, but if you can day trade and trade fast it is the big boy tool that gives you an easy upperhand over the other trades in the market. Reading any DOM has same effect on nq and es, jigsaw is ahead of the game. and you do see what is hidden if you learn jigsaw which is why it is so great, you can read the spoofs, icebergs etc.... People display large orders for lots of reasons, if you knew anything about jigsaw you would know your the one that needs it, and you can read a lot of that w just tt or cqg. there is much easier ways in todays world to send a signal then a large order in todays markets.Well, because it doesn't represent imbalance really. You don't see what is hidden. You don't know if there is algo splicing big orders. The only reason anyone would display large order and seat there like a duck is to signal something to the others, imho. This signal should be interpreted differently depending on the context. I will venture a guess that the reason jigsaw doesn't answer you is because your thorough analysis will eventually lead you to believe that their tool is close to useless in today's markets (well at least for instruments like nq and es). Much easier to sell to people who don't bother asking too many questions.