I've had several pm's asking me for help with order book scalping in the Dax. This is my response.
Working off the order book in an environment of high volatility will get you killed, you need to use it in conjunction with support and resistance levels, types of market behavior ( a feel for market) and divergences between other indexes. Also pay attention to what the large components of the DAX are doing often they will give you a "tell".
Most important thing about the order book is not the numbers you see in it, but the what you don't see. You must understanding how games are played in there. For example is the size for real are is it bots. doing cancels once hit. Is small size refreshing. Do they "bid it to offer it"? ect....
Very Important: You can not trade off the oder book alone in a very volatile markets, however understanding it gives you an edge, that used in conjunction with other solid trading techniques can improve your performance.
Working off the order book in an environment of high volatility will get you killed, you need to use it in conjunction with support and resistance levels, types of market behavior ( a feel for market) and divergences between other indexes. Also pay attention to what the large components of the DAX are doing often they will give you a "tell".
Most important thing about the order book is not the numbers you see in it, but the what you don't see. You must understanding how games are played in there. For example is the size for real are is it bots. doing cancels once hit. Is small size refreshing. Do they "bid it to offer it"? ect....
Very Important: You can not trade off the oder book alone in a very volatile markets, however understanding it gives you an edge, that used in conjunction with other solid trading techniques can improve your performance.
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