I should setup a recording of my DOM to be very clear but what I mean is something like on your "ES 13 12 12 Short 9 40 a m - YouTube" above where for some time the Bid snapshot was very high positive, then soon after the Bid Snapshot flips negative while the Offer Snapshot goes very high positive.
While watching the ES at reversal points and pullbacks, this switching can happen every few seconds as traders (big ones) are feeding in orders invisible to the standard DOM. (ie Icebergs.)
This switching from side to side can happen in microseconds which is the phenomena I am referring to. Obviously algo programs are 'fighting' each other, or perhaps the same trader entity is playing both sides simultaneously. These are the kind of strategies I am trying to understand and identify.
Yes, the 'visible' limit orders may stay firm or move little, but whatever, the actual trades made will be a much bigger number. An algo is topping up orders 'behind the scenes'. The Jigsaw snapshot is showing us this action through positive additions to the bid/offer. Pulling orders is equally important and we see them too as negative figures, of course.
In example above, for the high bids from 01:05 - 01:20, someone could have been covering short contracts from the day before, expecting the decline to halt. Or buying expecting a reversal. Who knows? But at least we do know what is happening behind the scenes and can trade accordingly, right.
Does that help?
Last edited by RichardHK; December 15th, 2012 at 09:40 AM.
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This is a 'spoof' order where the trader wants to give impression that the bid side is strong. Why? Cos he likely has Offers already setup on system and wants other traders to actually Buy from him.
Always a chance that others can buy those spoof bids if the trader does not pull them quick enough - so that's why they come and go like they do. A real nuisance and hopefully the regulators, one day, will make this illegal. Or at least enforce a minimum order residency time. Don't hold your breath though.
As you can see from the first part of the video, there was a real battle at these levels 1415.25 - 1416.25
At the beginning of the video we see that as soon as price first reached the zone - sellers steped int trying to push price lower off its highs - at 00:00 - 00:20 we see a lot of red in tape as well as in current trade fields right in the zone i've marked.
00:20 - 01:30 - a lot of buying on the inside ask @ 15.25 (current trades- 2674) while no selling whatsoever at the inside bid - this already signals a breakout for me.
1:30 - 2:36 - tape is green, a lot of pulling off the limit orders from the inside offer is seen in snapshot on offer side @ 1415.50 - 1416.25 levels
2:36 - 4:20 battle continues, as sellers step in and push price to the 1415.25 level - where we have seen a magnificent amount of buying.
4:20 - 5:45 - buying resumes, we see offers pulling away again, this is a good place to enter long for few scalp ticks
Right at the end of the video we see final breakthrough with big buying @ 1416.25 - 1416.50, tape is green.
Nu guess here is that Big Money are scaling out of their postion which they accumulated earlier agains the breakout traders.
A lot of effort here with no result, just like i said in previous post - presumably, smarts who went long at the open, right now are scaling out off their positions.
0:50 - 1:05 a lot of trading at inside bid/ask @ 1417.25 - 1417.00 levels.
1:40 - 1732 trades against 1417.25 lvl on ask, immediately after that we see big red prints in tape (1:48) - this is a combination of holding a level + actively shorting a market, I would enter somewhere here but keeping in mind that i'm shorting against the trend.
2:39 - 1206 trades against 1417.25 lvl on ask - same level again!
3:30 - 1442 trades against 1417.25 lvl on ask - same level third time!
4:20 - 902 trades against 1417.25 lvl on ask - this is getting ridiculous, meanwhile I see shorts at the inside bid as well.
6:50 - 7:20 - 1984 contracts traded against 1416.75 lvl on bid, tape is mostly red, a lot of bid stacking is seen on the snapshot. price doesn't stay long below the level and reverses quickly. Not really shure what this is? Part of the scheme to further lure people into buying?
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00:00 - 01:10 - selling pressure builds up, but yet again the 1416.75 level holds and price barely touches the 1416.50 level
1:20 - 1:50 we see buying resume (tape is mostly green) and interesting flash of 2319 orders on the bid @ 1417.25 1:50 is seen (in real time i would've probably never noticed this) - luring people into buying again? Notice that this is the same level where we have seen multiple active buying in previous video.
3:50 - 1250 trades agains 1417.25 offer - AGAIN same level!
5:18 - 5:41 - buying resumes, something weird happens @ 1418.00 level with 3206 contracts traded. My guees that these are stops of people who shorted earlier @ the 1417 - 1417.25 (just like i did in previous video)
6:00 - 6:30 active selling, notice how limits are being pulled off the bids as well - smart money ran retail stops and now actively shorting the marketd, cos the have a pretty good short position with all that buying we've seen against their limits at 1417 price area.
This is a good place to short, but i doubt anyone would do it so fast after his stop has been run out during the previous attempt to go short. I definitely woldn't be so quick. But again, I'm only starting to learn and hopefuly one day I will be entering second or even third time with no doubt. The key thing to remember is that the risk stayed unchanged - one would be entering at the same level with the same small stop, so re-entry is a MUST!
My resume for these series is that setups don't always happen fast and in one place, sometimes it is the whole gameplay by smart money one needs to identify. And in order to do so, one needs A LOT of practice!
I think this is what DT describes in some of his posts - smart money act in key areas luring both breakout traders and faders into positions, running stops of both groups and making money of them! Pro gameplay at its finest!
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Did you see 1418 price? This situation calls @Holding the offer@. Byers try to break out and large prints appears. But they can not to move price higher.
Than was large printing at bid. Bid were filled. This call @Pay the bid@. All this show Sellers are in control. I were short there 1417 75 and took 1 point i think. I do not remember ))))
And this is a long play day. Be only long today. You will like it ))))
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