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How is the crossing of orders work in Order Flow?
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How is the crossing of orders work in Order Flow?

  #1 (permalink)
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How is the crossing of orders work in Order Flow?

good morning,
if it has not addressed the issue, I have seen the webinars but saw nothing about or at least did not understand (my English is in process)
It is essential to understand the reading of Order Flow to know how to cross orders as reflected in the graph, for example:

BUY LIMIT---------SELL MARKET=BID
SELL LIMIT--------BUY MARKET=ASK
BUY STOP---------SELL LIMIT=ASK
SELL STOP--------BUY LIMIT=BID


The question I have is that if the big guys use limit orders or orders also used to market?
It is that I can not imagine a guy with $ 100 million charge pressing buy market
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  #3 (permalink)
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neil mccauley View Post
good morning,
if it has not addressed the issue, I have seen the webinars but saw nothing about or at least did not understand (my English is in process)
It is essential to understand the reading of Order Flow to know how to cross orders as reflected in the graph, for example:

BUY LIMIT---------SELL MARKET=BID
SELL LIMIT--------BUY MARKET=ASK
BUY STOP---------SELL LIMIT=ASK
SELL STOP--------BUY LIMIT=BID


The question I have is that if the big guys use limit orders or orders also used to market?
It is that I can not imagine a guy with $ 100 million charge pressing buy market

Hi there, sorry I don't understand your question. What do you mean by 'cross orders'?

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I mean the crossing of orders on the tape, for example when a price level 2 orders intersect, 1 order is BUY LIMIT and the other is SELL MARKET, the order shown on the tape is the aggressive order, in this case mARKET sELL that appear us in the BID side, so for example candle image are 100 BID 8:15 sailing but the price barely moves, the retailers are selling to market but the smart money is absorbing through BUY orders LIMT, this is confirmed when the price goes up after,
not if I explain well, I'm learning Order Flow and this is not my native language

the question is that if the SMART MONEY when it comes to market enters using commands BUY LIMIT, or also uses MARKET ORDERS?, although I can not imagine an institutional trader with a large bill coming to market with an order BUY MARKET, I guess they expect the market to fill your order

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neil mccauley View Post
I mean the crossing of orders on the tape, for example when a price level 2 orders intersect, 1 order is BUY LIMIT and the other is SELL MARKET, the order shown on the tape is the aggressive order, in this case mARKET sELL that appear us in the BID side, so for example candle image are 100 BID 8:15 sailing but the price barely moves, the retailers are selling to market but the smart money is absorbing through BUY orders LIMT, this is confirmed when the price goes up after,
not if I explain well, I'm learning Order Flow and this is not my native language

the question is that if the SMART MONEY when it comes to market enters using commands BUY LIMIT, or also uses MARKET ORDERS?, although I can not imagine an institutional trader with a large bill coming to market with an order BUY MARKET, I guess they expect the market to fill your order

It sounds like there's some confusion. Limit orders are added to the order book, either on the bid or the ask side. Market orders are those that are matched to the limit orders. There's no crossing. It's a match between the two. For every 1 contract bought there's 1 contract sold.

Another way to look at it: limit orders add liquidity to the market. Market orders take liquidiy from the market because they are those consuming the liquidity from the limit orders.

Does it make sense?

In case you have not come across it, there is an excellent set of free videos explaining both theory and practice of Order Flow at Free Tape Reading and Order Flow Training Materials

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I mean this is an example of 6B
According to the graph we see 157 in BID, instead of swooping the price does the opposite, the big boys have absorbed the retailers sellers who are selling with orders SELL MARKET, the big guys put their orders BUY LIMIT, result reflected on the side BID
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neil mccauley View Post
I mean this is an example of 6B
According to the graph we see 157 in BID, instead of swooping the price does the opposite, the big boys have absorbed the retailers sellers who are selling with orders SELL MARKET, the big guys put their orders BUY LIMIT, result reflected on the side BID

So if I understand what you're saying, you are wondering why the price did not go down after 157 contracts traded on the bid?

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exatcly

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neil mccauley View Post
exatcly

Ok, so what might have happened is that those 157 contracts were absorbed by what you refer to as 'the big boys'.

Someone was probably using an Iceberg order to continually buy all those contracts. Because everyone saw that, no matter how many contracts were being traded at that point, the buyer was willing to buy more, they gave up and started buying rather than selling, that's why the price started going up.

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ok, if those sales are absorbed by buyers:
1-Why it not reflected as ASK?
2-What kind of order there at that particular price point, buy market or buy limit?

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