Registered: Nov 2011
12-27-11 07:17 AM
Quote from jack hershey:
To get back on topic.
Level 2 and two T&S's will just about do it as a display for taking the full offer of the market segment by segment.
Set up one T&S to show all info no matter how small.
Set up the other T&S to show 50 and above (no chicken feed) only.
In reading markets, one quickly comes to understand that there is more add/delete on limit orders than there is actual T&S. This gamesmanship is most popular in two places: on round numbers and on the limits close to the BBid and BAsk (the offer).
The sum of the five places centered and on each side of BBid and BAsk is necessary. So is the ratio of the two sums.
A trader has to know a few things as well.
One thing is that most limit order traders are not very successful. Those who face them are inclined to be more successful.
Also it is important to know that successful traders cannot and do not use stops.
You must know these things and you must know why these things are true.
On the DOM you continually see a pair being traded and you know which side of the pair is in the trade as a limit order. This color visual is very important to regard. Also there are two other considerations: the numbers and the "other pair".
Money is made from price movement. Profits are taken at the ends of price movement.
Thus, you have to be in the market all the time and you have to always be on the correct side of the market.
Fortunately, all of this "reading" does boil down considerably to only a few things.
The most important single thing is "whether or not the market's velocity can exceed the obstacle showing on the DOM".
There are only two possible outcomes of this quoted concern.
The DOM is set up to continually inform you of the obstacle and to indirectly inform you of the market's velocity.
The obstacle on the Bid is highlighted as is the obstacle on the offer (ask).
I named them "WALLS".
You can look at the T&S and the listed limit orders and watch the velocity that results.
I trade with market orders so I am first in line for my trades.
If a limit order value is hit, then the limit order is switched to a market order.
Since you know this, you know how the price will move regarding its "room between walls to travel" and you know if a wall is hit all the limit orders there become part of the "between" space.
You can watch the price go to and fro from one wall to another. And you just "frontrun" this oscillation or "gyration" as the ignorant call it.
Oscillations last only one or two five minute bars.
If you choose to trade for more profits per trade (and fewer trades per day), you use a "treatment" called "trend trading" where you "count" the trend parts as a dominant, a non-dominant and a last dominant.
To do this you use the sums to know dominant from non-dominant. almost all ET posters have this essential understanding ass backwards. Since I do not wish to provoke discussion or questions, I will pass on explaining this counter-intuitive notion.
At any rate, each trend consumes three moves and they all are in the form of dominant to non-dominant to dominant. What has to be understood in this thinking is that trends following trends show dominant to dominant as the adjacent trends end then begin.
Logging helps keep the "reading" clear, crisp and concise. (See E. B White's "Elements of Style").
The very neat thing about "reading" the markets is that the beliefs of CW defeat this process. That means it is easier than expected to be able to "read" the fear, anxiety and anger added by CW type traders.
One of the most delightful "effects" of the CW herd mentality is called cascading.
cascading occurs on the DOM when chickenfeed accounts are being closed one after another as accounts are closed by brokers as they go "upside down" when ignorant traders have just emptied their accounts.
At these times, those doing what I mentioned above, just ride along having their position make more and more unrealized profits.
At the end, a person just has to "read" the odd harmonic nature of the dominant on the DOM.
So you either can read what I wrote or it is the proverbial gibberish. I do not really expect this thread to stay on topic and get doiwn to the nitty gritty. There are too many people lurking who need to out smart themselves and not learn from someone else.
I have traded longer than the DOM has existed.
You have made it too easy. It is like cheating without the guilt.
I am embedding your post in case OP complains to the moderator.
Happy New Year!