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Block Trade Observations

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Dallas Texas/USA
 
Trading Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 3 since Oct 2013
Thanks: 0 given, 1 received

Block Trade Observations

My first time to post, so please be gentle with me.

I am not a good trader, I am too technical and analytical so I fall into the trap of exiting too quickly when price moves against me.

Regarding indicators, I truly feel that it is like driving down an interstate highway by looking in your rear view mirror. You can see where you have been, but you do not see what is ahead of you. When you do see what has happened, it is too late. You are heading for a wreck.

Having said that, I must now contradict myself- I do believe there might be some predictability in using divergences. Also, I like to use ATR to avoid markets that are whipsawing. My favorite indicator is the SMA4median.

I have recently been trying to analyze footprints and I have come up with these conclusions:
(1) Indicators are good at telling me what market orders have done recently, but they do not tell me much about limit orders. If anyone has any suggestions on an indicator that identifies limit order activity, I would love to hear about it.
(2) The Market Manipulator is more obvious when things are not behaving as they should, but the Market Manipulator's activity seems to be invisible when the Herd of traders are doing what he wants them to do. An example of things not behaving as they should is when you have a large amount of market orders buying, but price fails to rise, or perhaps price even goes down.
(3) Regarding supply and demand - The Market Manipulator can create “demand” by buying on the ask using market orders, or he can create “demand” on the bid side by using limit orders. This is why footprints are tricky. The same theory can also be applied to the “supply” manipulation.
(4) The teachers I have heard tell us that the Market Manipulators work on limit orders. My theory is that the Market Manipulator uses limit orders when he wants to trade secretly and he uses market orders when he wants to stampede the herd.
(5) I have recently been looking at the POC of the candle, on high volume candles, and observing which direction price moves as it leaves the POC area.
(6) It seems to me that the Market Maker is always on the opposite side of Herds activity. He is selling when the herd wants to buy, and is buying when the herd wants to sell. The problem is - I am part of the herd. The Market Maker must eventually move the market against the herd and this is when I find that his hand is the most visible. These are the locations of higher volume, delta is one direction but price starts moving in the other direction (delta divergence). Also, the highest volume in the POC switches to the side so the herd can see his intent (he is now ready to stampede). So in the case of a rise in price, the higher volume in the POC will move to ask side of the footprint; while it was previously larger on the bid side of previous candles.
(7) It appears to me that when a block trade occurs the Market Maker will move price in the opposite direction so the Market Maker can cover his position. If a large buyer buys 10,000 shares long, then the Market Maker is effectively short 10,000 shares. The Market Maker needs to drive the price downward so he can be profitable in his short position. This does not always ring true but it is an interesting observation.
(8) I have been using the idea of using the block trade price as a pivot line, or as support/resistance. If the block order was a long position at $10.00 I draw a line at the $10.00 level. If price immediately moves below the pivot line then I have a short bias, if the price moves above the pivot line, I have a long bias. This price change is only relative for the amount of time it takes for the Market Maker to cover his position.

The best advice I can give new traders is:
(1) Paper trade before you actually put real money on the line. Using real money only increases the emotional pressure exponentially. If you cannot trade profitable, using a practice account, then you most certainly will NOT be successful trading with real money.
(2) Trade price action and volume as much as possible and avoid using indicators. Remember they are looking backwards.
(3) Buy into support and sell into resistance areas.
(4) Enter in the direction of a longer time frame and exit on a shorter time frame.
(5) Quit buying indicators. Some of the best indicators I have found are available for free from the download area of futures.io.

Please help me with the following question.
I am trying to find block trade data for NASDAQ stocks. I have a Schwab real account and they provide block trade data but it does not have a time stamp for each trade. I purchased data today from nasdaq.com but I cannot correlate it to the volume and prices I see on one minute charts. I think their data may be related to options and not equities. I am considering buying a trade-ideas.com membership but I am not sure how fast their block data is provided. Any recommendations would be appreciated.

The information I have given is provided to help stimulate thought and conversation. I hope it will help someone. Feel free to treat me roughly, if you like. Teach me what you know. Where am I right? Where am I wrong? I confess, I am not a good trader so take everything I have said with a measure of caution. I am still learning.

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