So during the trading session today , I saw about 5400 contracts bid for ES at 1894 even. I was wondering how relevant these large contract bid/ask are? Personally if I was a big trader, I would try to stealth my position. I wouldn't just leave it out for others to see, especially in a slow market. So do you think these obvious huge positions are legit orders or do they just put out huge size and then pull the order? I mean my target for the ES was 1891, but when I see such huge size on the bid, I get a little intimidated since I don't think the market can push through that...especially when I am only trading 1 contract haha.
I wouldn't pay too much attention to the DOM levels. If you want to get a feel for actual transactions, put up a time and sales window.
It seemed legit. Saw a few 100+ bids (market sells) landing on t&s when it reached 1894 the first time down.
What's sure is that limit orders don't move markets. They influence it's behavior. But a big order layin' either on the buy or sell side, doesn't mean market takers are either bullish or bearish. It depends where the order lies relative to the daily range. It can be a great entry price, I mean to be backed by that order (Support). But from my experience, I wouldn't rely only on that. It may indicate either a support or resistance. Or nothing at all. Sometimes big order just get rapidly consumed because there are lots of activity on the opposite side. So they know their big order will be filled at that precise price. I've read in an academic paper that market taker and market makers tend to offset each other. If there is a an positive imbalance in order flow, then market maker will bid more than offer. But it's not always true. And we can't make money from such an view...