Does the position in the dom queue indicate how right you are when entering a trade?

April 15th, 2021, 04:55 PM

So I enter a limit order on the DOM at X price.

If my order stays at the last position in the queue, no one else comes after me, and as time passes and price reaches my order, am I right to assume that I'm entering a shitty trade?

If no one else wants that price it's because of something?

Also, I noticed that when I enter an order and lots of orders come after me (at the same price), price reaches my order but it doesn't get filled and is usually a good trade.

SpeculatorSeth · April 19th, 2021, 11:28 AM

If you truly have an edge for entering into that trade in the first place you shouldn't care what others think. However, you do have it right that it's not a good thing to be at the back of the queue and get filled on a sweep. If price ticks through you on the fill then you've lost a lot of the advantage of getting filled with a limit order. It's much better that by the time you get filled a ton of orders have lined up behind you that you can hit back into for break even if you need to.

I think this dynamic is a large part of why informed traders using some sort of news as the basis of their trade prefer to be the aggressors.

Does the position in the dom queue indicate how right you are when entering a trade?

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Does the position in the dom queue indicate how right you are when entering a trade?