Tape Reading Large Orders CL

Discussion in 'Commodity Futures' started by jsmooth, Oct 6, 2012.

  1. jsmooth


    For those that trade CL using the tape….What type of size do you look for on the DOM during the trading day and how do you react to that? My basic question is, if you see a large order – lets say a 150 lot posted that is 5 cents away from the last – how do you react to that type of order. Obviously, (if) that’s a “real” order you should be bidding in front with stops back into that size, and force him to goto market and buy at higher prices and you sell into that with a profit (that’s how they did it on the floor back in the day)…How do you look at that now on the screen? I’ve found that you can find pivot levels when you find those levels and try to see what they do with those larger orders…they may be trying to “fake out” and be a seller into the buyers that come in, or they really need to buy – once those buy orders get filled though, the market will make a nice push below that to find a different level of balance. My question, does anyone have any tips, or pointers on what they look for when looking at the “tape/DOM” in CL? What type of size you look for, what are your thoughts when you see big size? I watch T&S, but it seems like that cant give you the real picture because large orders will get broken up into a lot of small trades on execution, so watching T&S really doesn’t tell the whole story…
  2. I find tape reading in futures markets a tiring low probability play. I have never seen any trader make a dime with any of the tape reading vendor tools. The best way to trade crude is with a very simple price action method since it trends so much. Stay high probability and trade the intraday trends with tight stops. I trade with 8 to 10 tick stops and 20 to 25 tick first profit target. Set up your charts with whatever will help you to follow the intraday trends.
  3. traderchi128

    traderchi128 Guest


    I think the days of reading the DOM are long gone. It used to work great in some of the thicker markets (Bunds,EuroStoxx) but not anymore. You can't believe anything you see in the DOM as large orders are flashed all the time. That and more and more bigger traders using Iceberg orders makes reading the DOM no good.
  4. The order book is worthless.

    500-lot spoofs appear nowadays in both crude and natural gas.

    Hourly and Daily charts are the best source of information, in my view.
  5. price-action pullbacks and/or breakouts... 500-volume chart or similar, 10-range setting, 500 tick or similar, etc

    CL intraday trading off key price action is like stealing. Only easier. And legal.
  6. +2
  7. Right. Higher time frame to find areas of possible s&r and then take shots at the short term trends. CL is excellent intraday with all the trending price action.
  8. jsmooth


    interesting...I do have a trading system I use but I base my executions on the DOM...I still do think there is value in watching the tape and how it moves. If you ever trade a market overnight or when volume is very light/mid day, basically you just need to be sitting on your hands and waiting for a big order to come into the market, other wise your just trading the algos...while your waiting for that the charts/technicals can become pretty deceiving IMO.

    I'll get some examples of what I was talking about next week with some print screens. we can continue this discussion next week.
  9. 2rosy


    really? people still use icebergs? everyone was frontrunning those a few years ago
  10. traderchi128

    traderchi128 Guest

    How does one frontrun an iceberg order?
    #10     Oct 7, 2012