NexusFi: Find Your Edge


Home Menu

 





CL Spoofing?


Discussion in Commodities

Updated
      Top Posters
    1. looks_one Jigsaw Trading with 3 posts (2 thanks)
    2. looks_two trad3rchr1s with 2 posts (1 thanks)
    3. looks_3 j4mes with 1 posts (0 thanks)
    4. looks_4 Quick Summary with 1 posts (0 thanks)
    1. trending_up 3,488 views
    2. thumb_up 3 thanks given
    3. group 4 followers
    1. forum 8 posts
    2. attach_file 0 attachments




 
Search this Thread

CL Spoofing?

  #1 (permalink)
trad3rchr1s
Shreveport+Louisiana/United States of America
 
Posts: 4 since Nov 2012
Thanks Given: 0
Thanks Received: 1

I day trade/scalp CL. Really new at it, been trading the CL for 4 months. I use NT7 DOM and charts. Noted that around stall points and turn points, support/resistance levels, big round numbers, pivots that usually a big level of orders will appear on one side or the other and seems to drag price in that direction. Of course the orders usually disappear without filling. Often seems to cause stop runs.

Not sure if it's the Pit or machine traders, or both? I've read a bit on spoofing, but most of those articles talk about suckering retail traders into a position then immediately fleecing them. This seems to be a way to get price moving past a stall point and the order levels are usually in the opposite direction. So a big ask level above resistance seems to drag price up, big bid drags it down. Whoever it is it doesn't always work out for them, of course.

Any thoughts on it? Is it spoofing and is spoofing this prevalent? Since CL is relatively illiquid compared to ES is it more susceptable to spoofing? Thanks

Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
Are there any eval firms that allow you to sink to your …
Traders Hideout
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
ZombieSqueeze
Platforms and Indicators
Deepmoney LLM
Elite Quantitative GenAI/LLM
Futures True Range Report
The Elite Circle
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
38 thanks
NexusFi site changelog and issues/problem reporting
26 thanks
GFIs1 1 DAX trade per day journal
19 thanks
The Program
18 thanks
  #3 (permalink)
 
squeezed's Avatar
 squeezed 
Lexington Park, MD
 
Experience: Intermediate
Platform: mbt desktop pro
Trading: CL, QM, NQ
Posts: 27 since Mar 2012
Thanks Given: 36
Thanks Received: 6


there is some information on "iceberg" and "growler" orders here that might be helpful. I recommend listening to the whole webinar if you have time:

Webinar: John Hoagland - [AUTOLINK]Order Flow[/AUTOLINK] / [AUTOLINK]Tape Reading[/AUTOLINK] - "The New [AUTOLINK]Pit[/AUTOLINK]"

"I have two basic rules about winning in trading as well as in life: (1) If you don't bet you can't win. (2) if you lose all your chips, you can't bet."
--- Larry Hite from Market Wizards by Jack D. Schwager
Reply With Quote
  #4 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393

Spoofing is common in all markets.

A lot of people on forums say "markets always move towards size" but realistically, if they always did that, I'd be the richest man on the planet.

If you go here - Order Flow - Now that you can read it and scroll down to the bottom, there's a video by Kam of L2ST.

He discusses the CL and exceptional size on the DOM and how to go about tackling those area.

Remember that spoofing a thin market is very dangerous, because there's so few contracts in front of you, you are in real danger of getting a fill. So don't presume it's always fake.

The other thing to tip you off with potentiall spoof orders is that if someone is trying to scare people into selling with a large offer, they will also often be buying from those sellers on the other side with an iceberg order.

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #5 (permalink)
trad3rchr1s
Shreveport+Louisiana/United States of America
 
Posts: 4 since Nov 2012
Thanks Given: 0
Thanks Received: 1

Excellent. Thanks for the insight. I never thought about spoofing being dangerous. The orders seems to usually disappear before getting filled which is why I thought they were some kind of spoof.

Reply With Quote
  #6 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393

Sure - they get pulled. Normally they spoof 3-4 levels out on thinner markets but they do get whacked now & again.

Visit my NexusFi Trade Journal Reply With Quote
  #7 (permalink)
 
trendwaves's Avatar
 trendwaves 
Florida
Market Wizard
 
Experience: Advanced
Platform: NinjaTrader 8
Trading: ES, NQ, CL
Posts: 703 since Dec 2012
Thanks Given: 2,898
Thanks Received: 2,525

There are 2 specific DOM spoofing patterns that I see regularly on the CL tape.

One of which I saw and trade earlier today. Since it's fresh in my mind at the moment I thought I would share my experience. Price was temporarily "stuck" in a tight range with very light volume, the spoof algo appeared in the DOM 4 ticks above the market on the offer side (at .63 if memory serves). Price traded up to the price and backed away a couple times forming about a 5-6 tick range. Then a strong impulse buying wave came in with volume, easily seen using CD, the spoof algo pulled the large offer and the market immediately surged at least 30 ticks straight up on strong volume. I see this specific pattern repeat almost every day. IMHO, what I think this algo does is suppress price into refreshing bids (in this case), then releases the offer and hits the bid hard, I think its an algo of refreshing light bids and a fake large offer followed by a very strong bid, again just MHO only based on a lot of screen time, and some good volume indicators.

Visit my NexusFi Trade Journal Reply With Quote
  #8 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393


trendwaves View Post
There are 2 specific DOM spoofing patterns that I see regularly on the CL tape.

One of which I saw and trade earlier today. Since it's fresh in my mind at the moment I thought I would share my experience. Price was temporarily "stuck" in a tight range with very light volume, the spoof algo appeared in the DOM 4 ticks above the market on the offer side (at .63 if memory serves). Price traded up to the price and backed away a couple times forming about a 5-6 tick range. Then a strong impulse buying wave came in with volume, easily seen using CD, the spoof algo pulled the large offer and the market immediately surged at least 30 ticks straight up on strong volume. I see this specific pattern repeat almost every day. IMHO, what I think this algo does is suppress price into refreshing bids (in this case), then releases the offer and hits the bid hard, I think its an algo of refreshing light bids and a fake large offer followed by a very strong bid, again just MHO only based on a lot of screen time, and some good volume indicators.

Next time you see this - take a look at what is happening on the other side.

On thicker markets you will see the large order on one side but an iceberg on the other. The large offer is to scare people into selling and the iceberg is to absorb that selling. Not to say this occurs in all cases and often it doesn't scare people into doing anything but it's worth looking out for.

Visit my NexusFi Trade Journal Reply With Quote
  #9 (permalink)
j4mes
New York
 
Posts: 4 since Dec 2012
Thanks Given: 1
Thanks Received: 0

Spoof algos are becoming more popular among the renaissance of algo trading, particularly in the Forex market where decimal liquidity allows more room for order flow.

Hence why scalping the ES has become increasingly more prone to manipulation around S&R.

Reply With Quote




Last Updated on December 24, 2012


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts