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I’ve heard about algos and hft. Not only that, but I can see some bizarre moves that can be explained only by 'non human' trading styles imo.
Algos’ designers have been spending a great deal of time and effort exploring all known trading styles (technical analysis, orders etc.) in order to take advantage of them and they seem to have achieved very good results. Maybe too good, so there may be nobody left to take advantage of?
Anyway - would you think it’s easier to trade using technical analysis and manipulated charts or manipulated DOM.
Can you help answer these questions from other members on NexusFi?
Stop worrying about such things. If these things are impacting your trading, you are doing it wrong (generally speaking, for any retail trader). HFT and algos are thrown around as "cool terms to use" and are excuses or scapegoats from those that don't know better, for the most part.
As Mike notes, do not get too hung up on these HFT/algo issues. But also do not dismiss them entirely.
To answer your question I would suggest you use both: a suitable chart AND the DOM - although not just a regular DOM. Manipulation is the name of the game. What would YOU do if you had millions of dollars to trade with? Put yourself in the big money guys' shoes and work out what you would do. Give your money away? No..
Ref 'not just a regular DOM' you can check out the Jigsaw Tools version which gives you an inside view on what is actually happening on the DOM. Iceberg orders, pulling orders, spoof orders, actual trades, etc. A regular DOM is not much use at all. Together with a tick chart (I use a 2000 tick) you can have a good view of what is going on.
True order flow traders use sentiment and context analysis. All the widgets sold under the label order flow are in my opinion a distraction and a way to make trading much harder and unnecessarily complex.
Maybe I sounded too negative in my post - I wouldn’t say I’m worried.
It’s more like accepting reality and trying to adjust my trading style and if possible trade directionally with algos. However most of algos are not designed to be directional, so it may not be easy.
My impression is that it would be unwise to analyse markets the same way traders did before excessive use of algorithms.
many (most) widgets are more a distraction than help. however a good functional dom can be a tremendous help. I don't consider myself as a true order flow trader (whatever that is), but I don't rely on sentiment and context.
by watching a superior dom:
the level ~ 1835 looked like a good buying opportunity:
