Who are we trading against? Why is the book so thin? - futures io
futures io



Who are we trading against? Why is the book so thin?


Discussion in Emini and Emicro Index

Updated
      Top Posters
    1. looks_one TWDsje with 1 posts (3 thanks)
    2. looks_two SBtrader82 with 1 posts (2 thanks)
    3. looks_3 erwinbeckers with 1 posts (0 thanks)
    4. looks_4 snax with 1 posts (1 thanks)
      Best Posters
    1. looks_one MiniP with 6 thanks per post
    2. looks_two wowleva with 6 thanks per post
    3. looks_3 anubis with 6 thanks per post
    4. looks_4 sloth with 5 thanks per post
    1. trending_up 3,223 views
    2. thumb_up 42 thanks given
    3. group 20 followers
    1. forum 15 posts
    2. attach_file 0 attachments




Welcome to futures io: the largest futures trading community on the planet, with well over 150,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

 
Search this Thread
 

Who are we trading against? Why is the book so thin?

(login for full post details)
  #11 (permalink)
 DanDaMan 
QC/Canada
 
Experience: Beginner
Platform: Sierra Chart, NinjaTrader
Trading: ES
 
DanDaMan's Avatar
 
Posts: 78 since May 2020
Thanks: 130 given, 162 received

Institutions are trading the ES at every moment of every day, they comprise nearly the totality of the volume. Retail volume is a blip.
Institutions use futures to hedge (this is also why you see major moves at the end/start of the day as portfolios are being rebalanced)- or in the case of HFTs to speculate/arb/capitalize.
Although the book may seem thin to you on the surface if you are looking on the DOM, it's deep. The algos will kick in and suck up anything you can throw at them- unless you come in at the wrong time, in which case you will know quickly that the algos left you holding the flaming bag.



anubis View Post
Looking at how thin the book is compared to years ago, around ~100 limits per tick, who is placing this limits?

I mean, most are market makers, but how many? Does a market making firm place 1 order per tick? 10?

Most days feels like the E-minis are being traded by a few market makers and a few thousands retail traders, the days institutions are trading it are very easy to distinguish and do not happen very often.

Why got the book so thin? I've seen screenshots from 2017 with ~1k limit orders per tick, has the e-mini reached a point of efficiency where is not worth trading anymore?


Reply With Quote
The following 3 users say Thank You to DanDaMan for this post:

Can you help answer these questions
from other members on futures io?
NT8 - Footprint Chart adding on code
NinjaTrader
use of Ultimate Oscillator in NT8
NinjaTrader
TOS Fold Loop to NT8 For Loop
NinjaTrader
NT deleting my Strategies on charts
NinjaTrader
 
 
(login for full post details)
  #12 (permalink)
 gregrnoe 
Denver, Colorado
 
Experience: Master
Platform: TOS/TastyWorks
Broker: TOS/TD ameritrade
Trading: Emini ES/NQ
 
Posts: 18 since Jul 2018
Thanks: 14 given, 34 received


anubis View Post
Looking at how thin the book is compared to years ago, around ~100 limits per tick, who is placing this limits?

I mean, most are market makers, but how many? Does a market making firm place 1 order per tick? 10?

Most days feels like the E-minis are being traded by a few market makers and a few thousands retail traders, the days institutions are trading it are very easy to distinguish and do not happen very often.

Why got the book so thin? I've seen screenshots from 2017 with ~1k limit orders per tick, has the e-mini reached a point of efficiency where is not worth trading anymore?

If by efficiency, you mean is it likely that you and/or anyone else for that matter will profit off of daytrading/short term scalping of any kind in the /ES, then your question is correctly answered with a resounding no. You are 99.999% unlikely to experience a positive expectancy short term trading the /ES futures. Your probability of failure increases with the shorter your trading timeframe is. Hope this helps.

Reply With Quote
The following user says Thank You to gregrnoe for this post:
 
(login for full post details)
  #13 (permalink)
 Cutloss 
Midway florida
 
 
Posts: 244 since May 2021


Liquidity is all icebergs unseen. A lot has shifted to Otc look a likes and with huge moves you dont get as much on the book resting orders but still a lot there more than u can see or do for sure. But they cancel them so they really aren't there! That's the problem when you do size without an execution specialist like citadel

Reply With Quote
 
(login for full post details)
  #14 (permalink)
 Sandpaddict 
Legendary Market Wizard
Langley
 
Experience: Intermediate
Platform: Ninjatrader
Broker: IB
Trading: Futures
 
Sandpaddict's Avatar
 
Posts: 643 since Mar 2020
Thanks: 928 given, 583 received


gregrnoe View Post
If by efficiency, you mean is it likely that you and/or anyone else for that matter will profit off of daytrading/short term scalping of any kind in the /ES, then your question is correctly answered with a resounding no. You are 99.999% unlikely to experience a positive expectancy short term trading the /ES futures. Your probability of failure increases with the shorter your trading timeframe is. Hope this helps.

Statistically that's true. But same is true of becoming the top in ANY field. Especially the esoteric rock/rap star... movie star ect.

But I have heard and it makes sense the shorter the timeframe the less likely of success.

If there were only 1000 people trading the odds would probably be the same.

Sent using the futures.io mobile app

Visit my futures io Trade Journal Reply With Quote
 
(login for full post details)
  #15 (permalink)
 dsheehan87 
Chicago IL USA
 
Experience: Advanced
Platform: Ninjatrader
Trading: ES CL SB
 
Posts: 14 since May 2020
Thanks: 3 given, 17 received


anubis View Post
Looking at how thin the book is compared to years ago, around ~100 limits per tick, who is placing this limits?

I mean, most are market makers, but how many? Does a market making firm place 1 order per tick? 10?

Most days feels like the E-minis are being traded by a few market makers and a few thousands retail traders, the days institutions are trading it are very easy to distinguish and do not happen very often.

Why got the book so thin? I've seen screenshots from 2017 with ~1k limit orders per tick, has the e-mini reached a point of efficiency where is not worth trading anymore?

I know this is a year old, but the reason the book is so thin because of volatility - you won't see big bids and offers until volatility is low again. No one is risking 5000 a handle when the ES moves 5-10 handles in a second. Micros will die off - contrary to what anyone says - they are too expensive to trade unless you have a seat. This is why in 2021 the book was 100 deep and why now its 50 deep. Same with crude. I wouldn't touch either, you get smoked easily because if someone needs to do business, they'll drop 500 and blast through your stop in a heartbeat.

Reply With Quote
The following 3 users say Thank You to dsheehan87 for this post:
 
(login for full post details)
  #16 (permalink)
 erwinbeckers 
Zoetermeer
 
Experience: Beginner
Platform: NinjaTrader
Trading: Emini ES,
 
Posts: 22 since Aug 2018
Thanks: 7 given, 27 received

Maybe the big guys are trading in their Dark Pools.. instead of out in the open on the normal exchanges ?

Reply With Quote


futures io Trading Community Traders Hideout Emini and Emicro Index > Who are we trading against? Why is the book so thin?


Last Updated on June 13, 2022


Upcoming Webinars and Events
 

NinjaTrader Indicator Challenge!

Ongoing
     



Copyright © 2022 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada), info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts