Would This Information Help You In Trading

[tradingjournals]

One unique aspect of trading is that one does not see the other side of his trade (unlike in real world where one could generally see the person one trades with). If one were to know whether the other side is a long closing a winning, flat or a losing trade (3 cases here), and in the case of shorts opening a new trade would this information help in building an edge? If yes, how and why?

Example: what if one were to buy only from one type of opposite trader (see 4 cases above)?

 

[1245]

Quote from tradingjournals:

One unique aspect of trading is that one does not see the other side of his trade. If you were to know whether the other side is a long closing a winning, flat or a losing trade, and in the case of shorts opening a new trade, would this information help you? If yes, how and why?

No, it's not important . You do your thing at the time and price that follows your strategy and ignore why the other side has provided you liquidity.

 

[Rorschach_test]

op,your topic is Philosophy,not trading!

 

[tradingjournals]

Quote from 1245:

No, it's not important . You do your thing at the time and price that follows your strategy and ignore why the other side has provided you liquidity.

Thanks. Note that I am not looking for why he did provide liquidity, but what was his situation before the trade.

 

[billyjoerob]

ptj agrees:

http://chinese-school.netfirms.com/Paul-Tudor-Jones-interview.html

Q: What's your competitive advantage as a trader?

Paul Tudor Jones: The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge. Because I think there are certain situations where you can absolutely understand what motivates every buyer and seller and have a pretty good picture of what's going to happen.

 

[DR.BOUYE]

Quote from 1245:

No, it's not important . You do your thing at the time and price that follows your strategy and ignore why the other side has provided you liquidity.

Buying off sellers closing out as opposed to buying off sellers opening new positions.

You say the difference is not important??

 

[Martinghoul]

Quote from tradingjournals:
One unique aspect of trading is that one does not see the other side of his trade (unlike in real world where one could generally see the person one trades with). If one were to know whether the other side is a long closing a winning, flat or a losing trade (3 cases here), and in the case of shorts opening a new trade would this information help in building an edge? If yes, how and why?

Example: what if one were to buy only from one type of opposite trader (see 4 cases above)?

It depends...

This information, on an aggregate level, could be useful in certain situations (generally, it's more useful in less liquid and more concentrated mkts). Most of the time, such info is neither here nor there.

 

[trade_canada]

Quote from tradingjournals:

One unique aspect of trading is that one does not see the other side of his trade (unlike in real world where one could generally see the person one trades with). If one were to know whether the other side is a long closing a winning, flat or a losing trade (3 cases here), and in the case of shorts opening a new trade would this information help in building an edge? If yes, how and why?

Example: what if one were to buy only from one type of opposite trader (see 4 cases above)?

In my opinion you can only get an edge from that if you know who you're trading with, but the problem is if they're that informed why would they make their motives that obvious?

You can come up with a system for assuming the motivation (e.g. the market is has rallied on light data, what do traders have to do to remove risk in anticipation of a correction? What time of day is this more likely to occur?).

 

[nazzdack]

Quote from tradingjournals:
----does not see the other side of his trade....
----If one were to know....
----would this information help in building an edge?
----If yes, how and why?
----what if one were to buy only from one type of

1) No benefit to that.
2) Different categories of traders have different perceptions about what constitutes a "good" price.
3) There could be benefit if you knew you were consistently trading with traders who are consistently profitable or consistently losing money, (before they close out their accounts). :eek:

 

[NoDoji]

Quote from tradingjournals:

If one were to know whether the other side is...would this information help in building an edge?

As a pure price action day trader, this information would be of no use to me whatsoever.