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I don't think the market is nearly as smart as what I a lot people think it is. A lot of people just keep getting stopped out all the time, and lose all their money, and then, they think somehow the market is out to get them. Yes, there is order book software, and that gives some high level information about buying and selling, but large market participants couldn't care less about you or your orders. The information they has isn't perfect, and doesn't allow them to always be right. I believe that markets seem to be designed to work in a way that is contrary to how most people are taught, and the way it works is contrary to the way that people normally think. The market doesn't take out people's stop losses because it somehow knows who you are and wants to get you. When the market is in a down trend, and it pulls back and creates a resistance, when the market goes back up to that resistance, and breaks through it, a lot of buyer, (long), liquidity gets created there. People's stop losses, which are long positions, and break out traders long positions are all there to be taken. Think of very large market participants sort of as, hunters of liquidity. They are doing very large positions. If they are selling, they need buyers to take the other side, or their trades can't be filled. So, if they are selling, they would logically look for areas of high buyer liquidity. Also, I've done a lot of paper trading and real trading in index futures, and there is no difference between trading in a paper account and trading real, from my perspective. There is no one waiting to get you when you go to trading real. However, trading is difficult and most people out there lose money trying to do it. I feel like they often don't stay on paper long enough to prove that they are trading with a valid strategy. They should be able to go at least a month, but probably multiple months, showing that they can have a consistent profit curve. If anything, trading real is better, because when on paper, they simulate more slippage than what actually occurs these days. Real trading for me these days doesn't have much slippage.
I don't think the market knows your position because thats not nessecary. They just have a lot more information and are able to trade these information way more efficiently. Take for example Aladin from Black Rock. Thats the kind of thing you are messing with. If you want to outperform the market, your strategy and risk management has to be extremely accurate and you need to find a niche in the system. Thats very tuff and its the reason why over 90% loose money on exchanges.
I have asked a good friend of mine - a really smart guy named ChatGPT):
Q:
market makers may be able to view trade operations of any participants that place orders such as buy, sell, stop, etc. My question - is it possible for the trader to hide his orders from others ?
Reply:
It is generally not possible for traders to completely hide their orders from market makers or other participants in the market. This is because orders are typically transmitted through an exchange or other trading venue, and the exchange is required to match buy and sell orders based on certain rules. As a result, other participants in the market will generally be able to see the orders that are being placed, even if they are not the intended recipient.
However, some traders may be able to partially obscure their orders by using certain strategies or techniques. For example, traders may use small order sizes or place orders at prices that are far away from the current market price in an attempt to make their orders less noticeable. They may also use algorithms or other automated tools to break up large orders into smaller pieces and execute them over a longer period of time, in an effort to reduce the impact on the market.
Overall, it is important to keep in mind that complete anonymity is not possible in financial markets, and traders should be prepared to have their orders visible to other market participants.
Very clever. I was just starting to play with ChatGPT - quite an amazing tool. It will also code trading indicators and strategies from what I understand - haven't tried it yet.
Your explanation is one of the reasons I stopped using Jigsaw. I only use volumetric bars and volume delta (from ninza.co). It's practically impossible to keep up with how the orders are distributed on the DOM - order are placed, they disappear, they're broken up into smaller parts. You never know what's going on.
I placed a random buy order far away in another platform from current trading price and instantly saw it in Bookmap that my order was added in the queue at the price.
Next, I cancelled that order, so it disappeared, then added again, was visible again, then cancelled again and it disappeared again.
This was to make sure someone else's orders were not mixing with me (and it can't be anyways with prices being that far).
So, in a nutshell, it is possible to see the orders usually by everyone (if they want to via techniques like this), but it is also possible to hide via icebergs. (And Bookmap can also detect and show icebergs, so again, it might be possible that any orders cannot be hidden at all).
