Brexit, Trump, China Trade war - it's hard to say if this will be permanent and that we'll never see 1000's there again but over the years I've seen things go away 'never to return' and then come back again anyway.
I honestly think that there is no need for it anymore. MM's might need to shows bids and offers, but HFT algos can simply decide in a micro second if they want to make a trade based on what is available. For a super fast machine to show their hand, other than for spoofing purposes, makes no sense. There might be a strategy here or there to take advantage of it, like during spikes, but even a spike is perhaps not a spike to a computer that can break a second up into 1 million timeframes and react at any micro second.
Is it a case of better more efficient iceberg style orders now? I've seen levels on CL that have almost nothing displayed but will absorb thousands of contracts.
Only time will tell which of us is right. The liquidity disappeared when Trump became president, so I think it's more to do with the fact we are never more than a tweet away from the a$$ falling out of the market or it shooting to the moon. There used to be a fairly reliable correlation between the VIX and the amount of depth in the book - but over the past 2 years, I've hardly bothered to look at it because there's so much news driving us up and down, then suddenly you get a no-news day that it's as dead as a Dodo. I think when Brexit is done, China and US settle their differences and Trump is out, the markets will stabilize and liquidity will come back in. Whether we have a bit of a crash first is anyone's guess but prices are lofty. S&P at 6000 in 2024 at the end of a Trump presidency & then the Dems get in? That's shorting talk where I come from... Once that washes out - I think it will be as thick as whatever Brazillian jiggler was mentioned earlier.
They have been exchange side for ages - I don't think they can get much more efficient than that. Often it's arb or hedging - trouble with bidding 1000 CL - you might get a bunch of people front-running. I recall a decent article of late where someone was matching large volume on CL against other expiry dates, pretty much proving that a lot of the large size was just spreading with no directional conviction. That's why context is king and why fading every iceberg or large bid/offer is an attractive but fruitless way to trade. I call them "one rule trading systems" like "fade every iceberg". Would be nice of the profession of trading were that easy.
For those under the assumption that HFT is still at the heights it was at 7 years ago, here's a few articles: https://moore207.com/why-has-high-frequency-trading-hft-stopped-minting-money-3b2ecea869f1 https://www.afr.com/markets/the-highfrequency-trading-bonanza-is-over-heres-why-20180102-h0cm09 https://www.forbes.com/sites/timwor...y-trading-is-over-dead-its-done/#73a13bf9dcf8 This can be disheartening to those who assume it is HFTs that stole their lunch. It was always going to be a competitive space and with the small opportunities being exploited like arb - there would always be some new guy willing to step in at a smaller deviation. Till the deviations became unprofitable relative to the investment. It was primarily an equities game too - which is what most outright futures traders seem to miss. Now - let's not confuse HFT with Quant trading - or rather trades confirmed (and in some cases created) by quantitative analysts which may or may not be executed programmatically. Different kettle of fish entirely.
Is this style of trading basically just the following?: -Use the DOM -Use executing market and correlated markets DOM to find which side of the market to lean on? -Trade mostly Gold, Silver, Soybeans, Interest Rate products, but only indices at night or early morning when there is less volatility? -Play the queue in slower/thicker markets, then deciding if you want to stay in as the queue works down and the correlations suggest that you lean on a bid or offer? -Using Time & Sales to know which traders are 'in the game' looking out for bigger traders? -Also, in some situations finding where the market is more in a 'market maker zone' such as a range where you can rely on with high probability mean reversion? -When a market has heavy 'lean' for example towards the buy-side, continue to lean on bids until velocity slows down. -Use those correlations, but pay attention to how things are trading in your market, and who is trading. -Pay attention to how you are filled because this will let you know what to expect. If the above is true, then a dude I talk to on Reddit and whose videos I use to watch on youtube told me how to do this for FREE! He took down most of his videos save for one, but what i posted is basically we talked about. I had about 30 conversations with him, and he just told me what he was working on and his thoughts on "manual market-making style scalping." He said that he just figured it out for himself by reading a bunch of old math-heavy research papers on algo market-making, and tried to make what he learned work for a slower manual execution style of scalping that didn't really compete with the algos, although "the algos are always in the game when it makes sense for them to be." He told me that in faster markets like ES/NQ/YM to rethink and reframe what the spread is. His precise words, "the spread is what you create based on where YOU place your bid/asks, not necessarily the inside bid and offer." Before he took down his videos, he said something similar while scalping YM for around 3-6 ticks/trade. He talked about "where to make your market, looking for back-and-forth action where you can easily flip out on the bid or ask." That dude did more for my trading than anyone without charging a thing. Gary Norden doesn't share any trading videos, the NDA of his course might make it so that people who bought it are afraid to even give a review and $999 just for a what 60-page ebook? That is a risky product. What if you buy it and find out that it is junk, that the above what I posted is basically what it is? That guy who use to make videos and who use to post on Reddit said he knows someone who paid Norden's full fee, the $3000 one and that student of Norden after 6 months didn't know how to trade the style. Why can't Gary Norden just share a simple video? Is the style so simple that one video would give all the secrets? Why can't the $999 book have images in it to share some examples of what he looks for on the DOM? He is asking a lot of money just for some words. He generally seems like an honest dude, but this book seems like it isn't worth what he is asking. Does he go over video in the monthly sessions mentioned on the Jigsaw website? One thing that Reddit dude said was that a lot of information on DOM/Price Ladder trading has come out because a lot of the techniques simply do not work any longer, and a lot of these former big shot prop traders have lost their edge. He said, that many educators are selling stuff that worked in 2005. He said something I won't share that was negative about another DOM scalper educator who charges a good amount of money to have ppl watch him trade, and what he said made sense.
Yup everything u said sounds more or less right. Advice is not to do scalping unless u hv some special advantage to a particular market. HFT has killed this game totally.
No - that would be a different game. Especially on interest rates, following spreaders etc. Time & Sales isn't used at all. It does change based on the market state but it does not rely on stuff like mean reversion or anything else you'd relate to as a regular outright daytrader. This is market making - it's a slightly different mindset. Gary is good at what he does and what's delivered has a reason. Videos would be quite pointless for a number of reasons - but the biggest is that people lean on them to bypass the process of getting experience. Mostly though - videos would just show you getting in and out, whereas the book covers the different facets you need to consider - some of which wouldn't even be on the screen. Traders are incredibly lazy, most aren't even close to being serious. So we try and put people off as much as possible while still giving those willing to put in the work the things they need. We do the quarterly Q&A sessions (2 so far) to firm up any potential misunderstandings based on feedback. It's going well - feedback has been good and at this point, I think the decisions Gary made have been validated as we see people having success with it.
How are you defining market-making? Maybe the use of market-making is what gets so much backlash from people because algos dominate the market-making business. I can see how doing it manually might not put you into competition with the algos, the guy from Reddit mentioned that. As a voluntary at-home market maker, you wouldn't seem to have many advantages. You are paying the same retail commissions, you prob aren't getting a prime position in the order book, and if you are playing the queue you still are not 'ahead of the game." I am not saying that it will not work, I am saying that the market maker terminology might not be what fits this kind of trading. I'm thinking that we might need to all just learn how to become spreaders and save ourselves!!!