I saw the heading for this post, "May 16th" (thinking it should be the 15th), and was temporarily, and foolishly, confused.
Internal conversation: "I'm on East Coast USA, he's in Australia, duh...."
OK, aside from that, I'm enjoying this thread. I've seen that you are looking more for largish moves... I'm a bit more scalpish, although not committed to it. (I like bigger moves if I can find them.)
I also see something about how you are making decisions, and I think I'm fairly clear on it (profile, DOM/order flow, news/reaction to news, etc.) It seems that, taking these factors into account, a fair amount of your decision-making is also by feel or, for lack of a better word, intuitive. Would you say this is correct?
I am asking because I am interested in finding a balance between formal and non-formal, or at least less-formal, ways of making trading decisions. I am trying to simplify down about as far as I can go, without simplifying too far .
I am not asking about the particular tools, which obviously are going to be an individual matter, just about the general approach. How would you describe it, in an overall sense?
Thanks, and thanks for the thread.
The following user says Thank You to bobwest for this post:
I hope my thread is of some value. Good to have you following along. The timezone thing is confusing. I spend half my day trying to work out what time it is in New York tbh.
Yes you're spot on regarding my approach.
It's basically this:
Identify market profile areas of interest
Look for size printing into the bid/offer in those areas
Look for good risk/reward
Always try and go with the sentiment
At a most basic level, my approach is effectively using the DOM to spot where the big buyers and sellers are. Trying to spot these guys executing orders so I can jump on and come along for the ride.
The market profile stuff and the risk/reward is just a way I add a few more "layers" to it I guess.
But the DOM is always the best place to start in my opinion.
The feel just comes from practice. It's a bit learning a new sport. It takes time and practice.
And in regards to the length of trade I look for, I only try and take longer trades to firstly avoid the churn that can be created through algos etc and secondly because of costs. Depending on your situation, commissions can really damage the bottom line so you do have to be a bit selective.
Hope that answers your question. Happy to help with anything.
Last edited by trentcroad; May 16th, 2014 at 03:20 AM.
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trentcroad, thank you for the daily analysis. I really enjoy your thread.
I have a few questions concerning the way you approach the market
1) Do you use a longer term chart to give you some kind of context or do you only rely on the DOM and market profile building up on any given day?
2) How do you determine the market sentiment?
The following user says Thank You to Jyrgen for this post:
I do take note of levels on a longer term chart. So I might open a 30 minute chart say and look for obvious technical levels. I take note of round numbers. I also look for gaps like yesterdays close, or the break between sessions. My market is shut a couple of times a day so it allows for that kind of thing.
These type of levels I just keep in the back of my mind as places I think the market will likely test and can help in setting up risk/reward situations.
Generally all my entries though are based on the DOM/MP.
Sentiment is a bit based on feel, the news and the trend. News is certainly an important factor and I don't like to fade things much when it's based on something fundamental.
But most basically - I am just trying to go with the trend. Often times the market will be a bit back and forth for the opening 10-30 mins. If it can break out of that range I kind of try and stick to the bias. Going with the trend basically.
Then I'll apply those things I listed earlier and only trade in that direction.
I just had a realisation that there are probably a few readers of the thread that are interested in DOM trading and are still new to it.
I just had a silly story that I wanted to share, highlighting the importance of what platform you use. I know many new traders like ninja trader.
When I was just beginning I got into a training program.
I knew that it was all about using the DOM so I thought I'd get a jump on things, so I wanted to start learning it asap.
So I loaded up the ninja dom and sat there looking for setups using only the DOM.
Here's the stupid part...
I sat there for 1 month. That's 20 trading sessions. And I saw one "possible" setup.
Now what I didn't realise is that you can't really see buying and selling on the ninja DOM.
The DOM is too basic. It doesn't show the volume accumulating, which is what you need.
While it's pretty funny now, back then it wasn't. Funny in hindsight.
My only consolation is that at least it shows I was committed.
So if you're starting out you need a good platform. Xtrader is a good one but it is expensive.
If you're using ninja checkout Jigsaw Trading. It's probably what I would consider the next generation DOM and is pretty impressive. Ideal for ES traders and it's proving to be very useful in thinner markets.
I hope that by sharing my stupid story, that I just saved a few people a month of their lives
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