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Trapped traders - a source of consistent profitability?
This is a good type of question that a new trader should be asking. There's a lot of ignorance out there in general about how the markets work because people simply don't know. Once you reach the level where you're a big fish, it isn't as simple as just buy or sell as many contracts as you want. When you start moving up in the layer cake, stuff like iceburg orders and dark liquidity pools come into play, all designed to hide a players hand to avoid an abnormal impact by large orders executing...
No special story, at the end of the day trading is just a job like any other job. Many people getting onto the bank line at 5:30am Mon - Fri are making hand over fist trading each day, but we're just regular people like everyone else... Yeah people like to hear a rags to riches story, but the reality is go to school, graduate, get a job, and if you're good at your job and work hard you make money.
Don't think there'are dark liquidity pools for Futures Markets , or at least I'm not aware, anyway they have not a directly impact on market behavior, but for what I know they only take off liquidity, and this is an issue for stocks, especially for those with little capital.
About iceberging and HFT, they can be tracked with some tricks, but is not simple to figure out their impact on order flow, a more comprehensive analysis is needed.
It wasn't a definitive answer, it was merely stating that other things come into play higher up the ladder. I also never said it's specific to futures markets, the original question was a general question about 'the market' I don't think how to track iceberg orders is really something that anyone here is ever going to have to do even if they are quite successful later on down the line....
HFT, don't get me started on that, its impact on most prop traders is extremely minimal. It's just a good excuse for the useless ones who every few years come up with new excuses. For a while it was the flipper who was stopping them from making money, and now days it's HFT apparently lol, or in reality it could just be because they can't move with the times. If one of my traders had a bad run and blamed it on HFT then I would tell him to go home and not come back. If you're a good trader then you can adapt to the market as it changes and as new technology comes along. If you reach a point where you can't adapt, then you've simply reached your personal level of incompetence.
Bid, how do you interpret 'the orders that are trading and resting at each price' ? Can you give just ONE example of a trade setup that is compatible with this approach ?
