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Chart reading quandry

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Legendary Elite_Member
Wiltshire, United Kingdom
 
Trading Experience: Beginner
Platform: Jigsaw daytradr
Favorite Futures: US Equity Index Futures
 
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Thanks much for your reply.....Do you think that some sort of depth of market indicator might be helpful to me?

Firstly, as you are live and trading decent size you are doing well, well done. Also you are doing a lot better than me as I am not trading live and therefore try never to give trading advice (So take any advice I offer now with a pinch of salt). If on this forum I answer somebody with something I think might be useful it tends to be fairly general but something I hope that most people after reading it would agree with. However as you asked directly it would be rude not to answer.

John Grady the No BS Daytrading guy is I think the 'go to guy' for DOM training as DavidHP suggests and the basic course of .pdf document and videos is a great overview. He is a treasuries trader which I tried looking at but I found them very hard to read because they are so slow and the order flow took a long time to have an effect on price a lot of the time. The same principals apply to all markets though; just with thinner markets the levels where action takes place are wider.

Personally I think the thinner markets that are actual commodities where you have commercial hedgers routinely operating make things easier to read. And easier to 'feel' when they are really supporting or sitting on the market and pushing it one way with very little serious back ticking and only small pullbacks. Yesterday for instance my read of CL was that price spent the first few hours of RTH pretty much in a 30 tick range between 57.50 and 57.80. There were passive buyers early at 70, then 60 and a lot at 50 and price wanted to go up but price was just being sat on by sellers absorbing everything strongly, especially between 70 and 80, everytime price tried to rise.

So if interested in buying around those levels you might decide that actually the risk reward doesn't work for you because the sellers are showing no signs of completing their business.
Or that as a buyer you need to be looking at just a small move and getting most of your position off around the 70 level and consequently using a smaller stop than you intended.
Or deciding to sit out until price can actually move one way or another and a trend starts.
Or whatever. I think the DOM or similar is useful for helping to see that sort of thing more quickly and precisely that just looking at a chart and the usual selection of indicators.

Trading, ideally structured, is a vehicle for expanding consciousness, not damaging it. - Brett Steenbarger

Last edited by matthew28; December 5th, 2017 at 06:16 AM.
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