Just starting out, and I've realized, based on the DOM, that if I enter a buy at the bid order with a take profit 1 tick up, the TP order will only enter the book when my bid gets sold, and if my bid is at the end of the line, unless there is buying supporting behind me in line, that the bid/ask is just going to move down. So now I'm thinking I should just submit at the bid and the ask simultaneously as two seperate limit orders when the bids/offers are close to even. Obviously an imbalance can always happen afterwards, but I theorize that this is more likely to succeed than the previous idea, where the take profit only enters the books after the first one is accepted. Does anyone have tips they can offer?
This does not work, cause say you eventually get filled on the bid side and market moves down a then you place another order at bid and so on, won't take long till you are wiped out, takes years of watching the DOM to digest patterns. I have friends who trade right off the DOM and so 300 plus trades a day, but you have to either lease a seat or buy one as you fees too high paying retail. Since you are new trader, gets books on charting and learn and study for couple years, better to lose money on paper than real life, better starting out to do longer term trading on weeks/daily charts and when you have information memorized like breathing then go down to smaller timeframes. Longer term gives you time to study whether you want to take a trade based on extensive back testing plus have full time job to be able to pay housing, food etc. Day trading is paying fees up the wazoo and if you make money, very little in return, longer term you pay much less in fees and can make much much more returns.
Paul Rotter - The flipper - is the one to look for if you want to trade this way. But as Handle said ... Don't do it with retail execution, commissions and poor knowledge of the dynamics, conditions ... Otherwise you'll end up picking pennies in front of a steamroller - Broke. You can't Grind the market ... You must Speculate. Uh ... Once I backtested this kind of strategy -> Buy the open, take profit 1 point higher ... No SL and it ended up a losing strategy. IMHO Markets are unbeatable in average. You got to determine, wait & exploit the right conditions that allow you to get an edge - timing.
http://adamhgrimes.com/blog/one-thing-thing-matters/ Good reminder. Only thing I can suggest is to put a note above your station saying " Don't be an idiot... Follow the plan". What I did lol.
@_@ I never said I was reinventing the wheel. Was just wondering if timing based on DOM information is any better than squeezing my cheeks and hoping.
Information ought to be actionable. If @ the end it still look as random for you, Then it means you get no information but noise. It's possible to extract information from a DOM (I do it). But to exploit it one has to know what & know how to exploit. No one taught me. I believe if someone ain't resourceful... Then maybe trading isn't the right path for him. We can't buy skills & knowledge.. Ain't easy. No shortuct for mastering any craft. Forget about the Cat flipper.
You'd need to find a market stall point, with a lot of orders on both sides or atleast on the bid side, then place your bid, if more bids don't come in behind your bid then pull your bid as it'll likely drop lower. If the Ask side is thin then great cause good odds the bidders will support it long enough to push the price up more than 1pip/pt. Got to be able to think quick and just react like it's a game. I'm scalping 3 - 10pts with DAX with no DOM purely off move/stall/retraces currently.