and as always detailed answer)))
I have another answer but yours make my picture more complited
This market drived lower by market orders of the crowd. And it will comes lower till crowd will go short and till all of it would sell. As the market orders or supply of the crowd became weak,market began to change it behavior.
In the begining of the move Crowd and pro sellers make together a supply, than it was only crowd, and then it was weak crowd against strong pro buyers.
Pro sellers come in to sell in to
BID limits on higher prices, as price goes down they became less active. But buyers becomes more active and put more BID to buy.
So it was weak crowd or retails VS strong pro buyers. I did not think too long which side to take.
I go long and stop out all of the sellers. Trade of a day
Tape reading is not meaning seeking. It is about measure supply and deamand and what type of it you see. Market or limit S/D, pro or retail S/D, strong or weak S/D. Places there one stronger of another is a reverses.
Yesterday example of ES and how it rise up to 1200 shows you that all retail sell on the lows and been locked.
I tried to go long from opening . 1187 was my 1 attempt. 1184-1185 second. And last 1183. Market
reversed and to the end of the day it was 1200. Why?
Because on the lower prices at the begining pro sellers come to sell hit to the bid> crowd come to sell too. market was emotional. Than pros understand that buyers too big and they began to go out on the bids, but crowd do not see this. As the crowd calm down and i say to you it was 51 miutes from
RTH opening market reversed. Why do i go long there and not short? Because i see a large buyer on the limit bid side and i do not see big seller on the limit ask side. Yes there were sellers but a few compare to buyers on the BID.
All i see to go short was 1186-1190 zone. And it 2-3 hours after openingm and you can see i take a profit there one by one.
I do not go short from opening as the market crazy go down. WHY? You say there is so BIG PROFIT. And i say what DionysusToast say "Because of the
slippage" To go short to the BID i need to know this BID limit is real and not just a scarecrow which will dessapear as i hit it. But to go short i do not see large sellers with me and my suplly will be eat and market goes higher. So there is a big risk and i know other pro see this too. And they would not think too long what to doo or hope some other guy move down prices for them because this is what they actual do ))) moving prices ))))
if crowd woudl not move down price and if all of your limit orders you put on ASK get filled with a light speed. What will you do? You will understand that here is a big demand and you real do not know how it big. So your fear to loose your account will drive you to close your position before other pros do it for your count))))
And what do you as a beholder will see?
1) Stream of big market orders to sell became weaker
2) At the BID sie limit increasing numbers of buyers
3) At the ask limit side decreasing numbers of sellers
But this is one situation than market go from BIGGER visable side. Sometimes it goes right to the bigger side))))
Complex. It is true ))))
