Grob, scientist: the point is that there may be a size seller with a 1000 contract hidden order that is only showing 200 at at time. what don't you get about this fact?
Friend Scientist, Why are you doing this ?? Now the secret is out. The Holy Grail is found. So, please tell me , How can we still trying to trade without wasting our time and burning our trading capital with all those fancy oscillators and TA indicators ? Why are you taking away all the mystery, the rocket science, the engineering and the IQ requirements to understand how we can ( NOT) make money with all those sexy indicators and mechanical systems ? I'm blaming you in the same way I've blamed myself when I realized all the time and money I've spent trying to get positive results in trading, goofing around with TA. Thx for sharing a great valuable knowledge , that make me feel that I'm not alone in my approach, since I did quit wasting my nights roasting my brain with TA some time ago, to learn that everything is in the tape observation and interpretation. Best.
...thank you for the unintended compliment, but this human's brain is NOT "by far superior to anything a computer could ever do." Testing of stupid ideas (my best kind) often leads to nonintuitive (UNintuitive?) trades. I am developing my mechanical systems so that when I am so old that I've had to transplant a ball up there to do any thinking at all I can still punch the orders from my computer's "green light buy, red light sell", as the futures infomercial here in LA says.
This is really quite irrelevant. There may be a size seller. There may be a size buyer. There may be thousands of traders capable of making a trade watching and getting ready at any particular instant, traders who can trade more than 1000 contracts. Frankly, the idea of using the quote and size alone as a determinant of future market direction is not going to work. So whether the quote is 200 X 200, or 200 X 1200, is not going to matter 30 seconds from now. The ingredients of supply and demand can change quickly from minute to minute depending on everything else that's happening. That's why information like T&S and market depth should be viewed within a particular context. I think that context is defined by the underlying stock market. Watching the tape within a framework is quite helpful. I do it every day. Watching the tape as we make a new high or new low can give you a good feel at that time. Quotes and size of trades make take on a different meaning at that time than somewhere in the middle of the range. But remember, there is no holy grail, to include quote and size. They are simply tools. The tape may not show that 1000 contracts. But the way it acts around the level, along with other matters of underlying context, is all you really need to know. OldTrader
It's important for everyone all the time no matter what market view anyone has. your comments are off the mark.
Do me a favor, two of those paragraphs are right on. I am on TWS w/Market Depth. Not withstanding all the comments here that are whatever, if you use a slower fractal (pick the one I trade on for example) within three days you will see the offset and how it ripples. think about what is important to see next that you CAN'T see. Pretend you are long, What can't you see on the bid side? When do you first see it? How big is it? Figure out how to time everything to a T from that. I had a series of posts lined up but the thread was killed: I do not want to see this one killed because of me. I'out of here. Tri pact is checking out other stuff. Do a short position too and see what is missing on the ask side. Reinvent Market Depth so it works in correspondence with your trade on both sides not just one side with the unimportant stuff. You have the start with the your paragrph values.
You mean to tell me with all the arbs, mechanical, discretionary, program, fundies, institutions, quants, hedgers, backyard system builders, neo-nazi, and voodoo traders...from all over the world... all taking a swing, all at the same time sometimes, at a piece of the ES pie, that YOU are able to determine which way to go based on some flashing numbers that may or may not be executed?? Scientist, you're full of shit.
We fully understand this fact. Read again we've been writing about this, and carefully. In this case, the point isn't what is not shown, the point is what is shown, and it is often or more than often to mislead the crowd. The fact that orders may be hidden, no matter what size, actually reinforces this. Think: Big pro's want to show as little of their true intentions as possible, and try to mislead the crowd as to that intention as much as possible. They post as much as they can on the opposite side (generally under a cover of a 1T+ buffer, for that matter, in order not to get called too easily), while they try to post as little as possible on the side they really intend to go. The principle, however, not only stays exactly the same but improves with this. Now the pro's can load the opposite side and at the same time hide their genuine orders by showing only partials. Question answered. Compliments, Scientist
Hi Hawker, You might like to hear that I've been on a very similar kind of quest, in fact most traders did. They try indicators, trading systems, ra ra ra and maybe one day figure out it's all a waste of time, in comparison to what they can do by just observing raw price action, chart patterns, price, volume and order flow. You wasted whole nights roasting your brain with TA? Don't worry Hawker - I wasted whole years with it! In fact the "discovery" was very recent and very unexpected. One of my best trading friends, a long-time veteran trader and ex-pit-trader who I respect the highest of all, literally forced me to "Delete all my Spaghetti Bolognaise from my charts" and only use price and volume. I was terrified for a day or two. I felt completely naked. After a few days, I still was a little inconfident. A week later, I got to see all the things that I couldn't see before through all the pasta. I could focus on the patterns (which are much more powerful - fuck TA, try patterns), as well as just price, volume, tape and depth. I was transformed, and absolutely amazed. All my time reading the best of MA's, CCI and DMI/ADX were wasted. I moved on. Now all the time that was wasted with TA everyday could be spent of focusing on depth & tape. Within about a month, my average daily profits almost doubled, no nonsense. It was the most amazing trading breakthrough I ever had I from what I recall - And it came very late. Pit traders know this from the very beginning, since they're never subjected to all the vendor-hype and snakeoil society. However, few people have to privilege to start off as a pit trader. Either way, if you read Douglas' "Trading in the Zone", you will see that (particularly in the beginning of the book) he repeatedly stresses that the fancier your approach, the worse, since if you have more variables to process, you have more possible combinations to make up to make excuses for your mistakes! Douglas mainly speaks about how psychology and "being in the zone" is the most important aspect of all and how the trader with the simplest system and most disciplined and self-critical mindset will consistently outperform the undisciplined trader with the best tools, highest intelligence and lack of discipline and self-criticism. He examples this with saying how the very beginning, TA-illiterate and unexperienced traders often have considerable winning streaks. As we find out, "beginners luck" has less to do with luck, but more with the yet untouched confidence of virgin traders. Only as the first losers come into the game, the trader's psychology starts to rear its ugly head and have an adverse effect on confidence. The next step in the trader's development is to try to compensate for this by doing more and more analysis and evaluating more and more factors to try to predict the market and basically "be right". One step further in that evolution comes the final step, where the trader realizes that all this is superfluous, that we need to throw the fancy stuff away, stop trying to work on the markets and start working on ourselves. Look at this quote: Nothing more truthful could have been ever said. I admire Douglas - Although I have no idea if the guy really trades, but what he writes about is fundamentally true and insightful nevertheless. I would stress any serious trader, but even non-traders, to study his writings. It is full of insights. Best in your trading, brother Hawker! Warmest Regards, Scientist