The markets are counterintuitive and a lot goes on as time passes. One thing that is helpful is to be able to see what is going on. This has two parts: Displaying the market on screens and doing a routine that sensibly examines what is there to be seen. Making money mostly invloves holding during profit segments to take the markets offer from one end of the segment to another. The last chart displayed shows an exceptional trade underway. Any one can choose to watch to any extent they desire. I feel it is reasonable to pay attention to two things: The continuation of a profit segment and each end of a profit segment. Using the DOM for this purpose involves examining the ends of trends (the respective "bid" and ask" walls). What happens in between the two walls is how price "continues from one end to the other. In the last chart, the entry is now upside down and the exit is on the Wall. So whatt will happen is the trader will not exit and price will return to his entry (a "wash" trading point). Then it will put the trader in a loss position if he does not go to the right side of the market at that time. He has already done this sequence once in this trade. There are several types of games. Lets divide them into two types: "wall games" and "trend segment games". you commented about smart money and if it shows. A 1000 contract "showing" ordet is not going to be posted by just anyone. The OP won't and neither will the 1 nor will the moderator. The reason is that the market rules do not permit these types of traders to place 1000 lot orders. The first thing to get straight is that guys who post 1000 lot orders are NOT BS'ers. Who are the BS'ers? These are people who trade few lots and do not show up on the DOM, T&S or anywhere else. People who play the games on the DOM are significantly capitalized traders and they have been trading for quite a while. These people also have several accounts running at one time and the accounts are not necessarily in the same shop. We can subdivide the two categories as well. that will put four games on the table for starters and none of the games are playered by people who are BS'ers and they all have the account sizes required to play the games. So under end effects games lets add the "partial fillers" and under the "trend segment gamers" lets add the "scalers" (two sizes: in and out). I have been in professional rooms where the guys cannot "tape read". Nor can they "see" the games played nor do they play the games. To be a trader and be good at it, the trader has to know how markets work and how to time them. This means that those who play games know these things and the games make for more effectiveness and efficiency on their parts. Now that we have the kinds of games and their purposes on the table, we can look at some of the FAV times for ripping new ones for less skilled BS'ers. My all time FAv is, as you suggest, cascading. I did narrate the 27FEB "show" and we camtasia'ed the event as shown using the layout in my posted pic. What is nice about this level of record keeping is the debriefing aspect. you can pick out ech kind of game as a file for demo purposes. The 1 noted the end effect game where the market was furthered in trending past a wall that was pulled by several people acting together. You can see this game clearly by the combo of the OTR volume, the T&S and the DOM. It is not a good idea to conclude that people with a lot of money who work together are BS. The alternative is to watch them operate and front run them at their game. Here we see the divergence of opinions. A person can read all of them and then come to understand what path he wishes to follow. My choice is to cull my past postings into an appendix that will articulate the above games that are played and to further explain how to front run them when they are understood and seen on a display. How can a person who recognises a trend use the DOM to "push" The trend to counter act his scale in's? You see this at two times. By watching the wall move away from the BBid/BAsk and you see it by "successive "pulls" rippling ahead of the trend direction at least 2 or 3 ticks out. Usually, you also get to see how a group is cooperating while doing it. Lastly, you have to spend an equal amount of time looking at a filtered T&S. In trading, only half of the traders "show" in a trade. I, for one, do not show ever. As history, these kinds of people show after their moves. They "show" two things: their sentiment and their strength of commitment. To diquise either or both is important. Partial fills help. I always use the same partial value, and I always operate at the same rate (punctuation). But I only show after the fact. All the game players who show (and pull) not not have the slightest concern about showing because they know the attitudes of most people watching them pull off their very advantageous tricks of the trade. On the last posted chart you got to see the duration of the "railroad tracking" going on. there are terms like "exhaustion" and "congestion and "convergence". This is "phenomena" and it relates to a behavior called "reaction", i. e., the market "feeback loop". The OP is an example of "freezing" as market cycling is occurring. This leads a lot of people into habitual whipsawing. While whipsawing is not a game, it is an observable group behavior in trading. One way to see the games is looking at the dynamic of the relative values of the stalagmites (or tites). The ripple of pulling ahead of the trend is the first one you will see. The second will most likely be the "groups" moving the wall ahead of a trend to extendit. both of these games lead to the mediocre trader lament: "I got out of that trade too early".
There are several ways. The 1 was probably referring to the ES or the YM. There are several types of "big traders" too. The extremes would include individuals who lease seats or employees who trade OPM on behalf of a financial entity. It can't be done on simulated accounts, however. Margin is used to trade and big traders use government notes to post their margin. The notes are held to make money as well. An established level of margin is what dictates how many contracts can be put on the book and show on the Depth of Market. Any account shows how much margin is being used and how much is still available as time passes. If a person is on the right side of the market, unrealized profits add to his account size as time passes. In your case, you were showing declining value in your account since you continued on the wrong side of the market. Imagine your account as large and filled with T notes. You type in a 1 then three zeros. As you do this the software backing your account at your IB notes the worth of the contracts and how your margin supports the number of contracts. Look at your business plan for three years out and see what the account margins available will be for various trading accounts. Here is an account that has less than the margin for 1000 ES contracts in it. It is using a 500 dollar per contract margin rquirement. Part of the margin is being used in this trade. 20,000 dollars of margin. If more contracts were used, say 1,000, then one half million dollars would be involved as the margin. You can see that at the close of the trade shown, the trader now has enough more margin to trade an additional 93 contracts. Suppose he did and repeated the process a few times. It would be possible to add almost 400 on the next repetition and then, after that, he could trade 1,000 contracts any time he wished. Since the example only took two hours plus, the trader could move to over a 1,000 contracts in a couple of days. By now you have figured out that this trader could trade any # of contracts at any time he wished. Traders like this are the ones who play on the DOM. They have the margin to type in the limit orders to fill the book any time they want. They also, usually are the traders who "pull" the orders to turn other traders upside down and begin a cascade. There are other causes of cascading as well. A cascade is where insufficient margin causes an account to be traded by the IB to get the capital needed to keep the IB from being upside down on behalf of the trader. Traders who go through cascading (remember the FIFO arrangement) are learning how stops do NOT work. Many traders learn about slippage by being screwed by big traders playing on the DOM. The way to become a big trader is to always be on the "right" side of the market and to compound the number of contracts using profits. At some point the trader learns whether "showing" or not is useful. It is most useful to cause cascading. To not show is most useful for making money by front running. My first posted pic showed "tape reading' using the DOM, etc. This pic shows a trade that made 93 contracts profit on 20,000 margin by carving the turn. I also commented on the "games' played on the DOM. There are no quick questions nor quick answers; get yourself a mentor whom you can sit face to face with.
Don't get too wrapped up with Jack; he is the notorious Guru Wannabe, who wraps ET newbies up in hundreds of pages and lengthy posts of absolute nonsense. Seriously...
And here is traderzones first post on ET in 2006. "Does Technical Analysis work? I think the best way to answer this is evidence. Opinions & beliefs are irrelevant. For many tech analysis indicators (for futures/commodities) i have been tracking this site for several years: Indicator and Overall Opinion Performance Summary Indicator Total Number of Trades Average Days per Trade Total Profit from Trades Trend Spotter (TM) 7 Trades 24 Days/Trade -3987.50 7 Day Average Directional Indicator 45 Trades 10 Days/Trade -5900.00 10 - 8 Day Moving Average Hilo Channel 57 Trades 6 Days/Trade -4650.00 20 Day Moving Average vs Price 33 Trades 12 Days/Trade -5512.50 20 - 50 Day MACD Oscillator 11 Trades 34 Days/Trade -1512.50 20 Day Bollinger Bands 20 Trades 2 Days/Trade -625.00 40 Day Commodity Channel Index 24 Trades 7 Days/Trade -150.00 50 Day Moving Average vs Price 29 Trades 13 Days/Trade -8550.00 20 - 100 Day MACD Oscillator 10 Trades 30 Days/Trade -4725.00 50 Day Parabolic Time/Price 32 Trades 14 Days/Trade -10937.50 60 Day Commodity Channel Index 17 Trades 9 Days/Trade -175.00 100 Day Moving Average vs Price 21 Trades 14 Days/Trade -6900.00 50 - 100 Day MACD Oscillator 6 Trades 49 Days/Trade 337.50 Average Number of Trades Average Days per Trade Average Profit per Signal Overall Performance Summary 24 Trades 12 Days/Trade -4099.05 Overall? None of these popular indicators, when tested across ALL commodities shows evidence of profitability. Yes - I have tested this Support/resistance & trendlines are not part of this site. Arguing to the opposite without clear, testable evidence is basically a waste of time. But some still believe they are different" End of post I am speaking of learning to make money just answering your specific Q's and he has proved to himself that money cannot be made so he has to protect people starting out. As I suggested, look around locally for a sucessful trader that can mentor you face to face.
Thanks for the providing insights into these finer level techniques and observations. I have read here and there you make mention of the "players" and "games" and so I will search the archives for further reading. Thanks again.