So what exactly moves the market again? | Traders Hideout - 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


So what exactly moves the market again?

  #3 (permalink)

charlotte nc
Trading Experience: Master
Platform: ninjatrader
Broker/Data: NinjaTrader
Favorite Futures: Emini (ES, YM, NQ, ect.)
Posts: 391 since Jan 2015
Thanks: 71 given, 969 received

There are two sides to this.

1. The market order queue (buyers at ask, and sellers at bid)
2. The limit order queue (buyers at bid, sellers at ask)

The market moves up when the ask limit order queue is cleared
The market moves down when the bid limit order queue is cleared

The limit order queues can be cleared for 2 reasons:

1. Transactions occur do to market orders hitting it.
2. Cancels from orders inside the limit queue.

In your example the 101 market order buyers at ask and 100 market order sellers at bid would only play out the way you described if there were exactly 100 limit orders in both the bid and ask queue and no one canceled at all and every market order filled.

The more common case of a price level clearing is a combination of

1. Canceled from inside the limit order queue
2. Additions to a one of the limit orders queue
3. Market orders hitting the limit order queue

So in short market orders are only 1 of 3 factors that can influence if a price level changes.

Hope this helps.


Revan View Post
I read that,

Markets move up when their are no sellers left at the ask price.

Markets move down when their are no buyers left at the bid price.

How does that happen? essentially they got bought out by all the buyers or sellers..

If there were all of a sudden market orders for 101 buyers and 100 sellers the market would move up a tick, right?

Or have I been misled?

In the analytical world there is no such thing as art, there is only the science you know and the science you don't know. Characterizing the science you don't know as "art" is a fools game.
Visit my futures io Trade Journal Reply With Quote
The following 4 users say Thank You to iantg for this post: