if you go to the trading house / hub, you can see some traders trading using ladder / DOM and some using charts. do note that DOM traders are competing against the algo traders / machines. a decade ago, there were hardly any algo traders. DOM traders must react super fast. And machines must be super fast. Human vs machine, who will win? GOOD LUCK !!!
of course I trust you. You just got here 5 minutes ago ,and I've been trading for decades, so anything you have to say must take priority. Did your nanny tuck you in ?
Some good posts here from Bone & qlai. Similar to Bone, I don't think it's one thing that'll allow you to master any market, but it can be useful in combination with other knowledge & skills. I think the skill becomes more applicable when: (1) you have good rates (as Bone said), (2) there's a significant amount of directional order flow coming into the market, i.e., it's not being heavily spread and traded against other products, and there's some reason why there may be more urgent interest in orders coming into the market, e.g., a news release or some kind of fundamental shift, a huge technical level on a larger time frame, open/close/settlement or some other market imposed time frame which may 'force' urgency for orders.
People continually say "oh you can't trade using the DOM now because of all the games algos play". What you are missing is we make money BECAUSE of the games the algos play. If an algo comes in everyday and puts fake orders in the market I am going the opposite way to his fake orders. If anything happens consistently in the markets you can make money off it. The only bad thing about algos is they tend to switch off once you have rinsed them of their money for a while and they go away and you need to find another one.
Yes. In the late '90's and early 2000's, Chicago had a couple dozen proprietary futures trading firms where the strategy was DOM scalping using TT X-Trader. All but one have been closed for ten to fifteen years now - and TransMarketGroup has completely transformed itself into a little mini DRW clone.
Not looking to pick a fight or anything as I know you are a big fan of spreading but i've been a prop trader in London for 15 years and its the other way around here. Everyone was just spreading firstly 5/10yr bonds and STIRS, then every prop firm was an energy spread trading firm. Literally hundred of guys all doing the same flys and cals. But the correlations all broken down now (compared to how they were). You could sit a chimp down and get them making money spreading a mean reverting range back and forth for years at a time, was good whilst it lasted. But now there are only 2 or 3 major prop firms and the guys making money are all either event traders or DOM scalpers. But hey, thats whats so good/infuriating about trading. There is no one way to make it work.
Hey, NP. I agree completely that there's no singular way to make money trading markets. The last guys I knew at DE Trading (Glenview/Chicago) who were making money scalping at my old firm had a tool for managing {gaming} order queue position. Looking at DRW, Jump, Peak6, Geneva, Belvidere, TransMarket today - it's all automation and still quite a bit of spreading and lead-lag correlations. I am not aware of any firm in Chicago where manual scalping a DOM has any sort of prevalence in terms of strategy.