The answer is yes, every buyer rquires a seller and every seller requires a buyer. However what you're missing is the agressiveness of a buyer or seller vs. the passive buyer or seller. If I want to sell 1000 Bond Futures at the market then it could take me 4 tics to do it. In other words the market will drop by 4 tics. If there is only 250 bid at the first tic below then I'll only be able to sell 250 contratcs there. I still need to sell 750 more. So I'll go down to the next tic and then the next tic and then another tic until I get all 1000 contracts filled. Our volume indicators displays agressive vs. passive behavior. BTW....when I was in the pit the ability to ascertain the agressiveness of order flow was essential to my abilty to make money. Pit traders did very well because they had this information. A pit traders needs to know when a big seller is going to the market. How did I benefit in this scenario?: 1. I would not buy and 2. I would look for a bid to hit. Good software can now display the same information that was once only available in the pit. The best time to get long or short is when the market is earilly quiet (balance bars). A large order will come in and move the market AFTER you're already in the trade.
Yes, we all wish you luck, are enjoying the intelligent debate level conversation we are having, and wish you success in your business. That line alone speaks volumes ... nothing else needs to be read from the statement. Puretick has bout 10 different forums, and many different people had issues with them ... exactly which one are you referring too? His posts on this thread say the contrary ... actually I think that no one knew that he had this level of knowledge, certainly not about a difficult subject like auction market theory. NO ONE was stopping you from proving everyone wrong and showing all of ET what a great trader you are ... then, or now. From the tone of your posts on this thread, you sound like you are talking about yourself. :eek: Yes, and can you please keep your posts on topic?
ok, thank you. HOWEVER, are you missing one very important point--- bluffing? tons of bluffs and posturing in market, what am i missing? BB
You can't bluff a trade. Bluffing only occurs on the bids/asks as the bluffed orders are pulled when price trades at the bid/ask price. Compare what actually trades on a T&S table to what had shown up on the DOM with bid/ask volume, and you'll get an idea of how much bluffing goes on (huge with the ES). Quite often you can see over 1000 contracts at the lowest offer price, but after only a couple hundred actual traded at the offer price, the remaining several hundred offered at that price disappear. This is quite apparent when the cumulative depth across all 5 prices on ones side of them DOM exceeds the other cumulateve depth by 2x or more - paradoxically, price often goes TOWARDS the side with the 2X+ depth - but that's a whole other discussion. What ZAL is referring to is a cumulative count of whether actual trades are occuring on the bid or ask on each respective price. Trades occurring at the bid mean the sellers are the aggressors, and trades occuring at the ask mean that the buyers are the aggressors. While there's always a buyer and seller for every transaction, the balance of whether more transactions occur on the bid at a given price relative to the number occuring on the ask at the same price can indicate supply/demand pressure.
ok. Then you are looking at past action to GUESS at the future. After a trade takes place, I agee, no more bluffing. However once that happens its TOO LATE for you to participate. This just boils down to guessing imho. just like anyother methd. BB
Start With An Idea At the beginning of the trading day, your first trade will probably be in the direction of your pre-opening analysis. We develop this idea my looking at our monthly Market Profile chart. Some considerations are the direction of the mode (the price at which the highest volume occurred) for the last couple of days, and the location of these modes to the mode of the major distribution. Charles Cochran's sell level was 117.07/11, which was hit in the overnight session, but too early to be of benefit to us in the U.S. The market came into balance at 8:10 and resumed selling. The next sell zone, after negative news, was a high volume area at 116.15/19. You can see the results on the following chart. Selling continued throughout the day until short covering took over going into the close.
LOL....well, until you learn how to read the collective mind of the entire market to know exactly what it wants to do next, any kind of chart reading is using past action to make decisions based on probabilities of expected future outcomes. If you call that guessing, then so be it. For others of us, it's a matter of knowing the probabilities of something to occur based on past actions, and taking the trades to benefit from those probabilities. Understanding the degree to which trades occcur by taking bids vs. offers is about as instantaneous as you can get in getting a picture of supply vs. demand - certainly more real-time than any standard chart-based indicator. And no, I don't use the TradeMaven software. If you know of a method that doesn't use past and current action to establish probabilities of future results, I (and I'm sure many others) would love to hear about it. One thing I'd love to see in a piece of software is a way to calculate to what degree bids or offers are being pulled from the DOM. When orders are being pulled, price inevitably travels that direction. This removal of orders is done instantly and in large quantities, which means it's being done by the computer programs, not by traders like us.
I admit, they have a sharp setup. The tools provided could be used in many more ways than just the one they present. It would be great to see them offer a separate package for just the tools and platform one of these days. I disagree with the marketing method and the fact that a chatroom must be tacked on to the subscription price. But in all fairness, whoever came up with the analytics, good on you.
The free Tuesday webinars, 4 hour paid Friday webinars and the ongoing admittance to the daily education room are all a necessity. A student could not learn the functionality of the software, understand the complexities of an auction market and execute (manage) trade location without the guidance of our moderator Charlie Cochran and the veteran students. You're free to come into the room and ask the students how they feel about the necessity of daily education/guidance. Just turning on the software, and as the Brits say, "off you go" would be a disservice to the student and to us.