Ok. Guys. Let's do the following. If you want to really understand. Then you have to help each other. Work.
I have given you good tips, even the direction in which there is work. Let's pile up material and will analyze it together. Can we find something new and exciting)))
Watch the tape on the critical levels and share screens tape during the tests of these prices with the description of the situation. Can you handle it?
The following 2 users say Thank You to bloom for this post:
Please write about the theory. I was researching supply and demand. It says the market is looking for a place that sellers=buyers. Then I was thinking how a simple auction works...People bid higher and higher until no one wants to pay a higher price. Only problem with the markets is they also have sellers. Tug of war.
High of Day.(1.4350) Pros tend to buy at around xx50 and xx00. Getting toward the high the tape is slow. Then, when going downward it is faster. Indicates that Public is interested in going short. When going upwards, the tape is also not dense. More evidence what public is thinking. Tape is choppy when couple ticks away from High, going back and forth: 48, 48, 49, 49, 48, 48, 49, 49...-Not dense. Then, 48, 48, 47, 47, 48, 48, 47, 47...On level 2 at BIDS, they are all very small. When at the High, tape starts to run smoothly, at medium speed. No big prints indicating pros did not have limit orders waiting there. Then it gets to 1.4356, you see a really huge BID down at 1.4352.(500) Disappeared after 5 seconds. Is it the Public wanting to get it? Too late. A couple ticks down tape very slow and spurts. Tape goes up 2 ticks and nice and smooth dense flowing. Up move still possible because public is now interested and pros are not putting sell limit orders to absorb the Public liquidity yet because no big prints yet. Gets to 1.4360 and there is a Medium big best ASK.(150) It gets eaten. Only a 38 lot prints on the Tape for Big lots. This might indicate the pros are starting to try to stop this up move. But it could still go a little more. Then spurting: 59, 59, 58, 58, 59, 59, 58, 58, 57, 57, 58, 58, 57, 57...-Not dense. Cannot go lower. Then smooth roll to 59 and dense. Then 60 dense. The Public wants to get in. Pause. A small big lot prints again at 1.4360. Fast tape down to 1.4358. It is a war. The fast smooth dense up. At 1.4364 a bigger than normal 67 lot prints. Shoots up really fast to 1.4369, then fall back down really fast to 1.4363.
Spurting: 63, 63, 64, 64, 63, 63, 64, 64....64, 64, 65, 65, 64, 64, 65, 65. Big 30 lot at 1.4365. Then 35 at same price. Cannot break 1.4365. Time to jump ship.
This is what I now think:
If price is approaching High of day and tape is moving slowly and not dense then the Public is not involved and they probably want to short at the High. Price will probably breakout because Pros will absorb there selling with Limit order buys.
On the other hand if you see fast tape when approaching the High then pros would most likely place limit sell orders and take there liquidity. You would see big lots that got filled.
Fast dense tape=Public strong
Slow dense tape=Public weak
Slow not dense tape= Pros putting market orders to move price slowly towards the direction they want. They hope to get Public interested and for them to move the price more.
If anyone knows of any bidding techniques or tricks please share. Here is one: Shill bidding - Bidding on your own auction to get participates interested and raise the price higher for you.
My belief is that smart money is the catalyst for every bull move and every bear move. Whether you are looking at a daily chart or a 512 tick chart, it doesn't matter. I think that smart money buys and then retailers pile on and drive prices even higher. Smart money reaches a target and either buys again or sells. If they exit, the retailers sell lower and the cycle starts over again. When volume is not there but the price action is moving, it means that:
1) The smart money is already involved in the play and so they are letting retailers take prices where they want them to be before it is worth exiting
2) The smart money does not see value at the current price and is waiting for a key time/price to take action
Also, when a market rises on low volume, it doesn't mean that a directional move is destined to fail, it just means it is less likely to happen. You need to pay twice as much attention to volume at resistance. Sometimes smart money gets in at the bottom, and every now and then, Smart Money gets in at what the public thinks is the top... accumulation at a resistance level before the market moves even higher.
Agreed. My view is that you're talking about part of the picture. But who will describe the whole picture))) Not enough time. There are 2 party.
The first charges a posture for a long time, charges on fundamental analysis and insider information. That they are smart money, which accumulate Long or short against public places, or in moments where the audience provides liquidity. In general, according to CFTC Commitment of traders,in the market are 3 groups. Hedge funds, funds of the model, the audience. You may be surprised that the main suppliers of liquidity to hedge funds, funds are model. This is the reality of the market.
The audience is 80% of the course.
I digress. So. Smart Money accumulate positions or place there actions in locations with the highest liquidity. This is big money in the long term. And this is the first group of traders on the nature of the work.
The second group. Scalpers.
This we call them sharks. they cut you, they trade against small groups of traders. Their goal is you. you talk about them.
If the first group enters the market only in places where the liquidity is sufficient for them and their positions. The second is looking for a good opportunity to enter against the weak or weak hands of traders.
To make quality trades, we must keep in mind many factors. Those which are right now, our speech, just a few.
And all these groups are united by one thing. They are more informed. You surely have noticed many of the details. And the fact that for example you can see the rally, it is the effect of the entrance of big money. They wait until the dust settles, the price will come back and start again to make its case.
Everything was looking good. I didnt see any big lots at the BID, so I thought it would go further down because the big boys didnt take profit with limit orders. I was gonna take profit with the Pros...Wrong! So what happened? Did they take profit with market orders then?
Prints on bid-it limits the buyer and the seller simultaneously aggression. Ideally, you should stay until there is a seller and he is aggressive. And when there are big to enter limit orders))))
I wrote that in many situations prints mean different things. Think more. This is not a mechanical trading