and when i say reverse, i dont mean the trend necessarily changes but a pullback or squeeze may occur. To a longer time framed trader this may not matter much but to a person whose window is 5 minutes or less it matters a great deal.
I was there in a trading room in the late nineties through the change to decimalization, etc. Used watcher platform which does not highlight time and sales, and saw many traders make huge money trading off of nothing but level 2. Over several years these same traders gradually were not able to make a dime. I think the conclusion was that the bids and offers became less and less credible as market makers were seeking to regain/increase their edge. They became more and more deceptive in their practices. Just ..my...opinion.
this is true...you just need to know which market this is true in.. while it may not be true where you trade it is certainly true where ive been saying for quite some time...peace
I think I'll wait a day or so. In ET there is rarely a thread that has a start like this one did. There may be some people who made the same observations and want to stay on their exploratory track by following through on the four questions that I raised. Also there are some killer myths out there and this is one to avoid. If a person hasn't fallen into it and is at inquiry, then it is a good idea to just bypass the myth by working all the way around it. My answer to you will be in the orientation of gkadir and not an "all over the lot" application of a myth. It is a fundamental requirement to understand how market trading works. What I mean is, is that there are some very deep and profound comprehensive expositions on how the markets are scoped and bounded and a person has to have their content down cold. From a page 3 of one of them: "This book is about trading, the people who tradesecurities and contracts, the marketplaces where they trade, and the rules governing trading........Market micro structure is the branch of financial economics that investigates trading and the organization of markets......You will learn how prices come to reflect information about fundamental values, who makes markets liquid, and why some traders consistently profit from trading while others lose. You will be able to predict how various trading rules affect price efficiency, liquidity and trading profits." Making money is all about three things: investing, speculating and gambling. Investing is about moving money to the right place at the right time; speculating is using information for better returns; and gambling is focusing on favorable outcomes compared to unfavorable outcomes. Investors speculate without thinking....speculators gamble without considering , etc.. All people do all three simply because of how they have equipped themselves. gkadir may become an "informed" trader someday. That is he will have avoided the myths of the market. So this thread is about being informed. "Markets provide many valuable opportunities. To take advantage of them , you must first recognize them." From Chapter 8 of the same treatise*. This market condition that gkadir correctly recognizes can be buttressed by looking concurrently at a place that demos what is behind the level II observations. The informed trader is a subgroup of speculators. Getting right down to where the rubber meets the road, the thread subject is anticipation and front running the unfolding opportunity. This is not your bag as a consequence of your orientation and beliefs. But it may be for gkadir if he gets informed by monitoring further and keeping his reasoning very cool. I am forwarding that opportunity for him at this point. He is arriving on the scene and you are sitting on a mythical branch below the opportunity. *See Trading and Exchanges by Larry Harris.
I must admit, I find your writing style impenetrable. I also see no refutation of Steve's statements, with which I agree, just somewhat vague assertions that it is a myth and he is sitting on a branch. If you could explicitly counter the notion that often firm bids lined up on Level II are meaningless, and that they can even be considered contrary indications, you would be saying something of more substance relevant to the question at hand. Those of us who trade off of Level II tend to require a full picture of the action, rather than focusing on the bids/offers alone. This includes pulled bids/offers, quick spreads, changing size, how the ECNs behave around the spread, and especially the size and direction of prints, in conjunction with technical analysis: chart patterns, levels, pivot points, etc.
Amen! I too find his writing style overly complicated. All I took from his post was the direct insult . Until he can actually make an arguement against what I posted (instead of just saying I'm wrong), I'll pay him no mind.