Good question but I will give you a bad answer. Sorry about that. I have been observing T&S window and market depth from IB data for last 7-9 months or so. I roughly observe these windows for 3 hrs a day - an hour in the morning, an hour before market close and whenever price is close to important price levels. It is hard for me to explain it in words, but once or twice in a week, looking at those numbers - my brain tells me that price is going to either go up or go down - and more often than not my 'feeling' is correct. I cannot explain what pattern matching algorithm my brain has created! However, I can explain the ingredients that go into creating this feel. Mostly, it is a combination of following things: 1) how fast T&S is printing orders 2) mostly what color orders T&S is printing 3) what kind of size is moving through T&S 4) what is the time of the day 5) are we close to any important level 6) how lop-sided is market depth 7) how has been intra-day price action so far 8) where price is in a 2-3 day range (imp. for overnights and swing trades) 9) how is ES doing vis-a-vis NQ Not sure if any of it is helpful. My core trading setups are however different that the "feel setup" that I described above.
Its apparent that the pattern I saw today did not work. Doing a post analysis - I think I overlooked ammo's charts. Otherwise, I would have cut my short position around 86. Updating orders Bidding at 83, 84, 85 and 86.