Corrected...Mod, I am on the topic. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3784851>
May be this version is more logical? <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3784853>
nice to see jack hasn't lost his sense of you more. of course, imo the whole presentation is a jokes on you kinda thing.
you asked how to : 1. Read the DOM 2. read the T and S. These are tools created by inventors. The tools have been given to you. Now you know price is shown on the DOM and T&S. Now you know Price has two derivatives. Now you know money is made using the 2 trends of the price cycle. The tools can be read by your eyes and you use "inference from your long term memory to have PERCEPTION. I To trade you may come to an EXIT. II Later you may Enter. III After you enter you hold. You know this trading regime. I uses the DOM and T&S to perceive the turn of the exit by using price and its two derivatives as PERCEIVED on the DOM and as PERCEIVED on the T&S. The rotating circle shows you the Order Of Events of the first and second derivative in price as OBSERVABLE on the DOM. Price velocity is either increasing or decreasing (See the two symbols, + or -, respectively. So is acceleration. you can see the changes in the symbols in your mind once you have the long term memory there in your mind. you tell us it is NOT there. We beleive you. consider putting this stuff in your mind by reading the DOM as RTH flows through the day. Keep drawing where you are on the circle. Each lap change color of your ball point. Post your drill results for two months. So choose to keep experimenting of choose to invent the use of the DOM tool and the T&S tool. this is your thread. go in your direction. Others have given you input on the topic of the DOM tool and the T&S tool. We all do I, II and III in that order. We use DOM and T&S to carve turns and beginnings and ends of trends. Monitoring and analyzing trends is doing anticipation. Trend following is too late to make mucch money. I do reversal/hold to stay in the market from open to close. III to I quickly and II for the full offer of the market. I use DOM and T&S all the time as tools.
So I notice that the ES barely gets unbalanced (sometimes it will be like 15,000:20,000 for a moment, usually closer to 18,000:20,000). Some other instruments get big, 2:1 or more imbalances, such as gold and CL. Their volume is also much lower. The CL might have 200-600 contracts on each side and gold like 50-150.
I have not read this entire thread, but I used to trade the ES. I was profitable, but not enough to make a living so I gave it up. My take on this is this: this is too big an instrument to really make heads or tails of it from the DOM. Better to trade this sucker off daily charts, or at least 10 or 15 minute interval. Too many big players use this to HEDGE other positions. Say some broker sells a million MSFT shares, so they are now short MSFT. So they buy long ES to be neutral on the trade. IMO, this is not so much a directional instrument as used for hedging. Like I said, better to try and get an understanding of the overall daily direction. Hour to hour, I bet very few people really make any serious money.
Thanks for your input on this topic, Jack. I have a question: how do you measure the first and the second derivative of the price (velocity and acceleration)? I've been using the differences between the exponential moving averages for these purposes. For example: Velocity = EMA(N) - EMA(M), where N < M. Acceleration = EMA(N) - 2 * EMA(M) + EMA(K), where N < M < K. What do you use? Thanks.
I've noticed that gold has been around 1:2 bid:ask for a while yet is continuing to go down. Look at the huge number of orders at 1,732.5. Does that mean anything?