I'm assuming you already know that there are brokers or charting programs specifically setup for DOM traders in that they have special DOM reading tools or DOM indicators for DOM traders. Thus, make sure your data (charting program) and broker (trade execution program) are suitable for DOM traders and I'm not talking about the ones that are bundled with a signal calling trade alert service, online mentoring (no in person mentoring) or prop firm. Best to start at it and begin on a simulator with those that offer such in their DOM platform and the broker trade execution platform. DOM trading is not one of those topics that are explained in a few paragraphs, without screenshots and without videos. Its something you want to see screenshots with video recordings...similar to what the DOM traders are posting on Youtube. If they are talking about specific trades via the DOM...you want to see screeshots or videos of timestamp trade fills in broker trade execution platform that correlate with what they were talking about in that specific price area of the DOM. I mention Youtube only because I notice you quickly started talking about screenshots while not posting any yourself while talking about inside levels, pressures and so on. By the way, some of those brokers and charting programs that are specializing in DOM trading (market depth reading, order flow reading)...they are starting to have their own discussion forums...probably the best way to get your head around this stuff as you stated you're trying to do. Its been a trend since the 2008 global financial collapse...charting programs, brokers and social media sites have become much more competitive in starting their own discussion forums on a specific topic. wrbtrader
the traditional DOM doesn't shows where the buyers and sellers were, so it's hard to tell if the current price or the price that the auction goes for is a good resistance. for that there are good software, I recommend on Bokkmap. it gives a clearer view
Hi Cornerstone. I already have a platform that plots order flow from the T+S on the chart if that is what you were referring to. Keep in mind, I'm not trading off the DOM purely as most education is weighted heavily on this, neither do I intend to stare at the DOM for ages purely and make entries off it, which is also subject of a lot of the education that is shown. I'm wanting to know if I can use the DOM to validate day trades on the 10s Chart with a quick look at what the DOM is doing in the short time I have while price hovers at my area of interest. Simple as having the ES or CL rally to a resistance level anticipating a short entry. In the 30 seconds to couple or few minutes I may have to get an entry, I'm wanting to know what I can ascertain from the DOM.
SWING TRADES ?? ie 2 - 5 day holds ??? Or Daytrades, 1min to 60mins+ ?? DOM more suited to 10second holds generally, maybe daytrade.
It sounds to me like you have more knowledge/experience of using the DOM than most *active* participants on this chat, so I am not sure what kind of input you are looking for. Everything you said about it, I agree with in general but I don't think you can trade purely off the DOM anymore (with the exception of some instruments perhaps). 5th level? Well, if there is big size on the 5th level and it becomes the second level, let's see what happens next, right?
The best bid and best offer gets spoofed all the time as well. And trades get crossed. The DOM is full of illusion. And bid versus offer imbalances are pure smoke and mirrors as well. If anything, resting volume invites trade. One of the first things I learned while on the floor was NOT to fade size.
I gave you the answer...its up to you if you want to follow the advice even if you want to use the DOM just to validate your day trades. DOM trading is not a "give me a little knowledge"...you either use it to validate your trades or you don't use it at all. If you decided to use it even just a little confirmation of whatever you see in your charts or trading...you should do it the right way via using the proper tools. Simply, if you really don't need it...you then don't need to use a broker trade execution platform nor charting program suitable for DOM traders. Another way to look at it...if its just some novelty you're curious about...just look at Youtube videos...its free or post your own videos here at ET of your DOM align with your trades...then ask questions. Pay attention to what Bone states about trading via the DOM...lots of illusions. Good luck. wrbtrader
What does it mean? I thought leaning on size was one of the favorite strategies in the pits (from books ).
Wipe your butt with "the books" . Floor brokers get paid on FILLS. They don't get paid for unfilled orders. They will have their clerks shop around size to all their best customers.