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Why does the market move towards the heavier side of the order book?
@josh the best answer was probably given by @DionysusToast. However when it comes to Order Flow...as you can see various folks would have various opinions. Some also see Depth charts as shown by Ron and that is also perfectly fine. It is whatever one is comfy with. And moreover one should always stick to what works for them.
Am too deep in OF...hence for me i have to agree with Pete. Its not the intent as shown by the DOM rather it is the actual result of the intent. Hence what shows on the DOM is at times intent & people may need a T&S to show exactly what happened....unless your DOM is so good to show the difference between Intent & Action.
what you have touched upon is a valid question....but the answer may not be that simple is all my comment is. Hence if Depth Stack or Depth Heavy works for one ...one should stick to it.
But with OF......is the Heart of the Market. It is a "precursor" to every move large or small in nature....it just depends on what one is after. These routines are fully automated....irrespective of electronic Market Making or trading. The LOB is a wonderful tool at the hands of many.
There are various videos....but will leave with a few simple ones....which can and do illustrate if one is adept at OF....to see that shown depth has no meaning for most part....unless the action of the intent is realized or affected. Hence what are quotes are or are they pulled or what?....or did they throw in orders which were not in the book at times is much more important. But again these r just my 2cs....& my OF journey never really stops...i just learn something new every day .
cheers...the above post was not in agreement or disagreement to anything... its what i look into every single day from a deep OF perspective and as i mentioned there is no single way .
One reason is that the winning side buys or sells all the contracts available up to their exit limit order thus driving the market into their resting limit orders. The winning side provides the liquidity for the losing side. More complex behaviors can arise out of that basic behavior and whether the orders are near or far to the inside market might obviously be relevant as to the specific behavior.
Hi, first, thanks for starting this thread. I'm still trying to get my head around why the market moves like it does, especially as it relates to what one can see via volume delta and footprint charts, but since everything is still a bit fuzzy I'm trying to connect the dots with threads like these.
May I politely ask what you learned, noticed, or realized in the 7 years between asking the the question and then thinking it was a dumb question? It sounds like your thinking changed considerably.
You can even just point me in the right direction and I'll chase it up.
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