i think your right from what i get he is trading with the mo. i day traded for over two decades, and it wasn't until i learned to fade the tape that i made big money. there is NOTHING more satisfying than watching a market rip strait up and all the while you are selling into it getting POSITIVE SLIPPAGE. then the market drops like a rock as if it was waiting for you to get your orders filled. ----------- but what is key is to know when you MUST go with the MO.
Thank you CALLumbus and Mark... I'm not sure how this posts to threads. Again, thank you both. Written by many others.. "Trading is very personal. The path to being profitable is difficult." In 1998 I was taught to tape read NYSE. Essentially, us against the Specialist. This style was counter-intuitive. Win rate was high because we were acting after an impulse. i.e. "Buying big down moves, once you see large blocks going off. To go short an NYSE stock you needed to hold some position in the instrument.. Hence, we had to purchase "married puts", options contracts that would simply expire at the end of the day. During this time, most of my trades were Longs. Can't buy married puts on stocks without knowing which ones are the movers There was a push with some of our government officials to change trading denominations. They wanted to reduce the spread in the name of the public.. Hmm, really, nice politicians, who don't know anything about the market. They do know the lobbyist.. They do want to look good. Not sure which reason caused the change. 1/8ths was a dream for scalpers.. $125 x my 2-4k lot. Usually with a bigger Impulse. Sometime 3/4 or higher. Then 16ths, $62.50 more levels to track.. Income dropped. Then the dreaded Pennies.. Omg, how to keep track of 100 levels bouncing around. I believe, even the Specialist struggled with this change. 10,000 shares at 85.23 then 30,000 shares at 85.24 then another 10,000 at 85.22.... What, who's buying, who's selling.. Ridiculous. Adapted and changed style of trading... Didn't make any money for months. Thought about quitting. Took some night work.. Started thinking of other business ideas.. Hmm, almost every good idea was taken.. Maybe I wasn't creative enough. Nothing you can do.. Pay the bills first. Started trading SPY on the Amex... Lots from 1k-4k... Learning areas to position was key.. It took forever. At Bright Trading, I was paying 1 cent per share RT. A great rate for that time. "For me", intra-day trading will always be an attempt at gaining a good trade location together with a very short hold time. Limit time exposure. 2003 began watching the ES... Not allowed to trade futures at the Prop firm... This was and still completely different from trading stocks. 2005 Decided to skip the 4 hours of daily driving and began trading the ES in my basement. Spent a lot of money for a fast connection and DOM. Chopped myself to pieces. The movement of the ES is more like waves. Rotational, not as trending, unlike stocks. Charts were not my forte. Indicators, squiggly voodoo. What to do? Now, I'm going to coin a term... "Group the Price Action".. This is what I did... Get all of the fast choppy ES moves in a bar. Now, they are contained.. 1. Group the Action with the price bars. "Just scan this on your chart with "limited thought". Do not stare at your charts. 2. Keep Reading the DOM... "Size trading, Pace, Impulses and Tick Backs, HVN's, LVN's POC's.. Absolutely know where you are operating." 3. Scalp Enter, take small wins and losses based on your tape reading.. Once you get good at the "short-game, "scalping", your win rate will be relatively high. 4. If or when you catch a rotational impulse, move your protective stop above/below your entry and follow price just outside the swing levels. Stay back and let that thing move!!!! There are inside swings and outside swings. The outsides will most likely be a breakout or breakdown attempt. Be careful, these get faded a lot... 5. On your chart, mark YH, YL, YC, OVH, OVL and the Current Open... If you have some of these areas close together, again, be careful. "There will be many, many, opposing opinions.. These are tough areas to scalp... If you have to, let the price move out... Don't get upset, focus on the short-game." Always be ready. Rotations to follow every day. Some huge, others just a couple of points. Thanks for reading.. P.S. why did I write this during 10:00 am on Wednesday... Shouldn't I be trading away)) FOMC in about 3 hours. No way am I going to gamble with this chop...
Also note his comments about size bids and offers. Also please google the literal definition of “spoofing”. Many times order book imbalances are designed to deceive. Also, I cannot tell you how many times I’ve seen floor brokers shop around futures size to their bigger clients. Remember - these guys get paid for FILLS. And floor brokers got $1 per contract. Same holds true for the 24 hour electronic execution desks at the major FCMs. Don’t fade size as a strategy. Really big traders will actually bide their time and wait for the bid or ask to populate before they swing into action. Also, google the term “iceberg” orders. All the really big traders will usually resort to this tactic to get their stuff done, and it’s another reason why traded volume heat maps can be deceiving as to market participants intent.
this post should be a sticky for budding day traders as it well defines just how much information you need to take into account as you day trade. i have often posted the same exact criteria on this forum but finally someone has also posted a pretty complete guide to obstacles encountered and to be monitored while day trading. this is not easy stuff for a beginner, but this is what you must work towards if you are to survive. all this takes years as Greg has just stated. also note Greg has all but just told us all he is an avid follower/practitioner of "The Market Profile" and "Point of Control" which is good stuff.
Hi Mark, Excellent observation... Fast and almost always very Thin (ES) movement to the next range... I'm guessing you are well versed and have much experience. Price rolling up and down the HVN.. If one is quick, then scalp the range and be mindful of the number of times price has moved around the node. I call this Washing-Out... Eventually, as price ranges around the node, the orders traded there will be less significant, as some of these traders are no-longer in positions.. Always, always be prepared for price to move away fast... On my DOM is the standard Volume Profile.... I'll take scalps around the Nodes... Try not to get Caught at a large volume area in the middle or POC... Watch for Impulse moves out of the range and be highly aware of """ Ledges """ If price breaks and Returns to a Ledge... I will Lean on that Ledge Hard for the move... Doesn't always happen, my scalp entry may be too tight and I'll take a small loss or win... But, usually, I will catch the beginning of (2) Rotational moves per most trading days.. Now,,, this doesn't mean that I caught an Entire major move... When I step-follow off the Swing Levels, I can get taken out way too early... Still, the initial Impulse makes for good daily profits. The goal is to scalp ++B/E including commissions and Hopefully, catch that Impulse. Now, I will kindly state that I make a living. I am not a guru, I'm just like everyone else on this site or in the market... I decided a few moths back that I would try to help a few people.. I consider myself to be what we use to call a "Grinder". At the time most Prop guys hated this style... Too much work.. Too much focus.. Not many huge days.. But, one thing I enjoyed and the firm respected..... Limited Risk Exposure and I got Paid almost every month... Oh, let's not forget,,, many RT's hahaha... In 1998, with not one dollar from me and what seemed to be almost unlimited daily Trading Capital.. It probably wasn't... Ready,,, $20 per, each 1000 shares, each side...... Ouch... $40 per 1000 lot. This is why I left the first firm and went to Bright. Funded that account with 25k. I traded hard, never heard one word from the manager or compliance.. "Grinders" know how to Come Back from an early loss... This is paramount.. The ability to be down early in the trading day, and slowly scalp yourself back to B/E.. Yes there are days, that it is impossible to get in-sync and I will stop trading. Overall, Grinding back a loss to B/E saves your month... This is another topic in itself Regards Greg
Impulse moves from the POC will almost always show themselves via micro range expansion caused by one side or the other pulling their bids/offers. An increase in velocity of volume will also be there as a tell. I didn't put volume velocity on this chart but you can see clearly that after the IB the first time volume had, what I like to call, a frictionless scenario, the market never returned to that price level. The previous small range bar was also the slowest volume of the day up to that time which is generally the precursor to a tradeable move.