<center>DOM</center> ...Markets do not operate as gaming enterprises, they are much more serious and purposeful. Strategies abound. In gaming, a person knows the rules and gets dealt a hand. In markets, there are no rules and everyone gets dealt the same hand. This is difficult for most traders to understand until they get to intermediate or advanced intermediate levels. A big influence on traders is how much money they have. The more money you have, the more important it becomes to make money with a comparable strategy. The DOM is a tool that is part of strategies and it is used in a variety of ways, often according to the skills of the trader. One example. It is a sort of "fix" for the OP of SPM. The depth of market (DOM) alone is insufficient to tell the whole story. You have to code it with other data to make it understandable and automatic. The companion is T&S. Why is this? The reason is that you have to take into account those who do not "show" on T&S. It is importantto know why these people are not showing. It comes down to the srategy of the traders. Some strategies are based on price others are based on timing. "Timers" do not show because they do not have to. There are four basic games played by those who show. Their strategies are known far and wide by "timers" and they are "played" by timers. Lets put DOM and T&S together and see how this is like going from the first gear of "simple" to Second and Drive gears of making money. The manual version is very doable as well. There are two components, as mentioned: DOM and T&S. We have "tape reading" oriented flow display now available. Personally, I use a leading indicator of this stuff so I am just seeing the combo give me more the magnitude of the vector and the limits of the moves. So four showing games are going on and the "smart money" does not show until it plays a card. I truncate the T&S because I only want to see the "rich smart money". and how it affects the DOM since it is on the opposite side of the "show" on the DOM. Ask yourself how Jak Broz misses this. Then ask how important is it to the balance of things. First gear makes so much money; second gear makes more money; smart money is making a little more and is restrained to only parts of the day; rich smart money knows a lot more and is making correspondingly more; the Drive level players are pulling the money out of the pool. The money velocity comes in about 6 levels and the DOM and T&S do not tell you what the money velocity is. That is found elsewhere and not part of simple nor what is showing. So what is the DOM and T&S telling you? It tells you the two parts of the P, V relation: continuation and change. Why doesn't Jack Broz get this differentiation. Why doesn't the ratio measure work for this. Let's skip the answer of "being right" is more important than making money. Lets skip the "I make enough looking at this or that way". The gaming paradigm dominates and it is "showing" 100% of the time. The numbers that you see showing relate to what gaming major principle always in play by marginal and slightly better traders? Skip the losers here. Think about it. Which of the four major games is "showing" and caused by low grade player traders? Protection is "showing". At what quality level of trader who is successful does protection stop showing? I track 12 forms of strategies for doing stops. They ALL show. Protection is not going to get a "play" as the market moves except when? That is when is the only time protection is affected when the market is moving. Why did Jack Broz type this movement in in his litany and not discuss its occurrence? Looks like we have reached a point to discuss learning how to make money by using some displays on the screen. I called four trades in live trading in Vegas using what is below. the presenters and I made an agreement after the presentation. I get camtasias daily from them by email as a courtesy at this point. They had DOM displayed and were not using it to make trades on the market movement turns. What is the DOM doing that is so terrific when it is coupled to the T&S? It is a leading indicator of price turns. Does anyone know why this is not mentioned by anyone who is published or is on the web in behalf of the market places? It is a secret apparently. Lets get down on this right now. Take a display of DOM in the form of a button and run along side it the TS tape, truncated at a good level. Hang stalactites for the contract volume values going away from the middle outward. (bid on left offer on right). You are now viewing the range of the next move and the limits of the move and the direction the move is going in. You are also seeing the strength of the move (market pace) and the sentiment of the market as well. I have a vocabulary for this and I will not lay it out now. It is unique ad the descriptors are functional names that "associate" to what is going on. Here you get to call trades to the tick. That is what impresses presenters, too. What does making money look like when you get to this level of market display and understanding? Let me explain. MOST PEOPLE HAVE NEVER SEEN THE MARKET AS YET. I use the word "WALL" to describe the tick value of the reversal action that will be taken when the time comes to NOW. When a person says he prefers trading position over daytrading to make money, he is saying he cannot time the market and s is capable of proving he can't time. When a person is trading using the DOM and T&S to get reversals down to a tick level, he is saying he day trades, is leveraged, is trading the max contracts that, at that time, the market can bear and he is absolutely front running the rich smart money all day long for 6 1/2 hours of the RTH. Look at the T&S and truncate it so that you see the T&S "move" when the players are playing and the chicken feed is not there to even look at. Watch the DOM and see the WALL. See the WALL form; see the wall recede as the movement begin after the turn;see the next reversal appear minutes ahead of the next turn; see the BS scalping miss the opportunities. See the difference between protection and the "no show" traders who are opposite ALL shows. Get to see how the MINORITY controls the market. See how the MINORITY is running the plays on the market flow. Make absolutely sure at some point that you learn to separate the BS and mediocracy out of what you read, think and believe. First you have to get to see the market as a display on your screen (No one is doing that so far as far as snagt are concerned). Second, you have to truncate out what is not important. Third, you have to learn that the trades that count do not show until after the trade AND you have to know that what is showing is PROTECTION for people who are marginal and hardly successful in trading. Fourth, it is nice to know the three other games being played on the DOM; they are all apparent if you have any retention and can see multicontracts migrating. We now have global real time market data in many degrees of freedom. at this point the market telegraphs to those that have the displays setup to see it. There is no platform that is comprehensive. It take 3 or 4 and then you have to code the data to SEE THE MARKET. Do not even imagine that anyone has ever back-tested anything that has to do with making money on the markets. Get it straight as soon as possible that the "regression to the mean" is not where money is made based upon price change. Money is made in the markets by continually being in the markets and by carving off the turns and carving them to the tick using leading indicators of price...
Also, Jack spoke a bit about a display setup here and included an image which shows all the tools used and an organizational layout. A few posts down from that link he expanded on my questions as well (specifically the T/S allocations may be of interest as related to the use of DOM). Not sure if you would find any use in it, but I surely did and have organized my display around this image. HTH
more on DOM from cd23(jack) http://www.elitetrader.com/vb/showthread.php?s=&threadid=85767&perpage=6&pagenumber=48
Thanks, Ehorn. I'm sure it will be extremely helpful. I was also shown this bird's-eye pic of Jack's setup... <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2209125> Thanks for the link, Nkhoi. I'll look for info to bring over.
Provisional new layout, based on the link Ehorn provided. Left-side T&S unfiltered, right-side set at 50+. NT DOM doubles as order entry. The new screens will really come into their own. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2209192>
DOM from grob109(jack) http://www.elitetrader.com/vb/showthread.php?s=&threadid=30568&perpage=6&highlight=prv&pagenumber=6
Thanks for all the help, Nkhoi. No shortage of material to read through. As far as the drills go, a brief delay is not a massive loss. Of the 20-25 hours of Intermediate drills, over 90% of the time was occupied by the annotations. So, if I complete my annotation by Sunday night, fix my S/S on Monday post-market, then I should, in theory, be able to print off the S/S charts and complete the drill that same evening. After I've done that, I can pull up the S/S alongside my ES/YM charts and see how the offline learning translates to real-time application. Then, I can go back to the drill logs, pull up a market replay, identify the reversal times, and watch 1-2 minutes of DOM replay at around the time, looking specifically for corroboration and optimization, then add a fifth virtual equity curve to the semi-log chart. Only after I've done that, will I add the DOM to my real-time charts.