Staring at orderbook for 1 year. Insane?

Discussion in 'Index Futures' started by applejuice, Jun 14, 2011.

  1. Hi,

    Would appreciate hearing the thoughts of some seasoned intraday traders as I myself have little direct experience with trading.

    I have a mind to stare at the orderbook of a particular product (eurostoxx 50 as it goes) for a few hours each day, for 1 year.

    My theory is this: if I ignore charts and traditional technical analysis, and focus exclusively on the orderbook (taking no action during major fundamental number releases), I will eventually develop a "feel" for short-term market direction - possibly by recognizing when the big players are at work and following in-step behind them.

    My reasons for ignoring traditional technical analysis is deep rooted and will never change, so please just take the approach proposed above as set in stone.

    Is this a sound investment for 1000 hours?

    Thanks a lot in advance.
  2. 60-odd views and zero replies.

    I am genuinely encouraged by this.
  3. Tape reading can work, but learn from a legit prop shop. Don't waste your time staring at screens.
  4. I spent a year and a half watching price action and trading - small initially and then increasing size as I grew more comfortable. I couldn't just watch without trading, and having money on the line sharpens your focus.

    I'm now trading futures with real-time charting. I don't hold any fixed views on the relative merits, charts are just a graphical depiction of past price action, easy to see at a glance.

    Old habits die hard, when I am managing an open position I look at the Ninja Trader price ladder rather than the charts.

    One thing I really miss is having the volume done at each price level. My brokers Java app had that, both buy side and sell side, but for whatever reason (data comes in anyway), NT does not have that info on the price ladder.
  5. antaram


    you might do better if you watch last price / last trade size
  6. Bob111


    you might do even more better financially if you watch a redtube :p
  7. This is an interesting post but I think it's meaningless unless you have a little skin in the game.
  8. applejuice,

    It's interesting. Many traders will admonish you to learn how to trade first. They post all the "sound good" posts like "be disciplined"...have a plan...blah blah blah...but the post above by bond trade3r was more realistic.

    You will learn faster if you lose some money...real money.

    Not that I have cracked the market or anything like that.

    Find your edge and trade it. To find it by learning patterns is very good if you are very smart. Repetition while under the fire of real money will help you find your way...let me know when you do, I need all the help I can get these days.

  9. Blotto


    You are already showing the correct trading mindset - approaches of value are ignored by the public and the approaches the public take are worthless. I am encouraged by your prospects.

    You need to evaluate what the order book shows, and most importantly what it does not show - the unknown unknowns. Consider that there are multiple timeframes of trader active in the markets - which timeframe will react to order book information, and which timeframes will not even bother to look?

    The whole subject is massive but this is a good and important starting point. Also, consider your long term objectives. If you don't want to be scalping for 1-3 ticks for the rest of your life, then perhaps this is not a suitable method for you.

    Watching for one year without a solid plan is a waste of time. If necessary, spend nine months working out what to look for and three months looking at it.

    For more detailed information on the use and limitations of the order book, there is a saying in poker "don't tap the aquarium". While it is open to you to solve the puzzle, posting the answer in public would not be wise. Nothing wrong with a nudge in the right direction however.
  10. i think you need to perhaps reexamine some deep rooted "beliefs"


    how common your precious insights of devaluing of TA has become.
    how common losing in the markets is
    #10     Jun 15, 2011