What does this mean?

Discussion in 'Trading' started by switze22, Nov 11, 2008.

  1. "Watch the way the offers lift during squeezes. Watch the way the bids drop when quickly hit."

    I read this on a trading blog. What does that exactly mean?
  2. It means that I am going to send you a bunch of positions to take (co-incidentally - that take me out of my BAD positions) and you are to take these positions ASAP. Just kidding - I couldn't resist ;-) The saying seems to follow Buffet's "be greedy when others are fearful and be fearful when others are greedy :D
  3. lol nice.

    But what does that literally mean?

    Is he just saying watch the bid and ask prices go up and down?
  4. The idea is that based on the "velocity" of a move, traders that would otherwise have limit orders sitting on the DOM to enter or exit would pull them... which exacerbates the move further as you have less supply in the direction of the move.

    Eventually you get a snap back though when everyone piles in and takes the positions they were waiting to... you just want to be one of the first.