What causes the price to jump +/- >1 point on the DOM when there are offers in btwn?

Quote from IronFist:

Which leads me to one of the following conclusions:

1. There is no edge to be gained through using DOM

2. There is an edge to be gained but my software is hindering me (ie. I am unable to utilize it)

3. People who claim to use DOM as their edge are lying

4. I lack the intellectual capabilities to use DOM as an edge.


My responses:

1. Likely the case. Hopefully if this is true I won't waste too much time.

2. Quite possible.

3. Quite possible.

4. Doubtful, especially since I've heard a lot of floor traders are average IQ at best. They probably just have better resources (ie. give a genius a stick and a moron a machine gun and who is likely to win?).
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the advantage of floor traders, is that they can spot volume surges before the volume is displayed on the charts, when the chatter picks up. The only problem i see is that floor traders have a worser sense of direction, if trading from a chart I thought shouldn't it be easier to see which direction is dominant?

Yeah I mean time and sales, on the dom you will pick up the direction of some time and sales
 
"4. Doubtful, especially since I've heard a lot of floor traders are average IQ at best. They probably just have better resources (ie. give a genius a stick and a moron a machine gun and who is likely to win?)."

If the moron doesn't know how to use the machine gun and the genius knows how to use the stick, the genius wins.
 
Here is one very simple way to use the DOM.

Build an executable market feed for NQ for 50 contracts.

Calculate ask and bid for 50 contracts and use those numbers for your trading calcs. It should filter out a substantial amount of noise.
 
Quote from PocketChange:

Here is one very simple way to use the DOM.

Build an executable market feed for NQ for 50 contracts.

Calculate ask and bid for 50 contracts and use those numbers for your trading calcs. It should filter out a substantial amount of noise.
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what is an executable market feed? could you expand on this idea of yours?
 
Quote from IronFist:

But wouldn't that have traded through those offers rather than skipping them altogether?
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It would trade through, but in an electronic market it might happen so quickly that you wouldn't necessarily see each level taken out individually. I suppose what you actually see as the offers are lifted might have something to do with the exchanges software.
 
Quote from IronFist:

Which leads me to one of the following conclusions:
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Have you considered using a chart with times and sales to gauge momentum? DOM by itself is not enough these days, you know this?
 
Quote from Surdo:

Have you considered using a chart with times and sales to gauge momentum? DOM by itself is not enough these days, you know this?
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I have TaS up next to my chart. But I hear that you can't really tell anything from that chart other than the fact that large orders are being filled, but even if they're on the bid or ask, that doesn't give any clue into market directions (so I'm told).

Please tell me if this is not the case.

Also, how come each line on TaS has a bid size and and AskSize? How do these vary from the Volume, and how come sometimes one is bigger and other times the other is bigger?

Thanks.
 
I am in same situation like you.
In nearly all cases simple I do not see any edge observing time and sales and LII.
However I discovered following:

1. There are some rare situation, some chart patterns where DOM gives edge.
I am obseving there: , spread, cumulative No. bid or ask on all levels or unusually large bid/ask/trade on some level.
Critical is word RARELY.

2. It works better in some other commodities where to me looks DOM giving more often useful information than by indexes.

3. Where I see exploitable advantage are lower volume stocks in situations when they are not blindly following indexes. Here it looks to me that edge situation on DOM repeats far more often so it is possible trade them.

As general, situations giving edge in index futures are that uncommon that is not possible use them like edge by scalping /just sometimes like additional confirmation/ or I simple do not know on what to look.
 
Quote from NY0BScalper:

Yah, the offers should print and then the next offer gets displayed.
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If it prints at 1376.50 without touching 1376.25, it can be a calendar spread being reported. In this case, both offers at .25 and . 5 remains after the print.
 
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