Importance of Volume | Traders Hideout


futures.io - futures trading strategies, market news, trading charts and platforms


Traders Hideout


Discuss day trading practices and futures trading strategies on this forum for all markets. This forum is also for discussing and reviews for brokers, data feeds, and commercial or third party add-ons




 

Importance of Volume

  #20 (permalink)

Boston, MA
 
 
Posts: 165 since Dec 2014
Thanks: 60 given, 117 received


dom64 View Post
Absolutely agree with you but this was just to explain that without volumes there is no moment. This is not overly simplistic but a fact.
Huge volume can be at a price level and not move price if and only if there is absorption, which, I am assuming, if what you mean by imbalance. What moves the price is the relationship between Limit order and Market orders, which is what you see on the order book.
This is what I look at and use when I trade, this is what is being taught by Jigsaw, NOBS, etc.




Sent from my iPhone using futures.io mobile app

Yes but what we are seeing on the DOM are not only simply a set of standing limit orders, but also a collection of thousands of HFT algorithms placing and removing limit orders as price moves in order to exploit other algorithms. Most of these limit orders will never be filled because they will be removed quickly by the algorithms, and you probably are seeing only a small fraction of them coming on and off. Keep in mind that your DOM (and also your eyes) is not fast enough to update at the level of microseconds, so what you're seeing is really not an accurate reflection of what's going on in reality.

Reply With Quote