'No indicators' revisited

[bracke]

Who Me !

Regards

bracke

 

[SOCRATES]

Socrates thank you. Thant's what I thought might happen - that volume might be delayed for one minute bars.

The difficulty is, that if you persist in using 1 minute bars you are too close to the market, if
you want to see it unfolding in a context that you can follow by using a chart. Being too close prevents you from achieving this.

 

[growltiger]

Rogue elephant

Has anybody considered, from the perspective of this thread, the problem of the rogue trader who is currently rushing up and down in the margins of the S&P (emini)?


There has been some reference to these activities in threads about alleged market rigging, but that is not my question here. Rather, the difficulty is that the presence of the rogue (sometimes referred to as account "990N") can be detected in orders of 3000 contracts one or other side of the market (ie three times the normal aggregate bid or offer), but rarely are trades executed against these orders in any size; rather, as soon as there is a threat of that, the order is miraculously pulled, and the market rushes through the vacuum that has been left behind.

There is thus a price effect, but no volume related to it (only the shadow of volume that was threatened, or offered, but not executed).

 

[oatman]

That used to be known as "market rigging" - an offence.

 

[growltiger]

Rigging

That used to be known as "market rigging" - an offence.

Yes. But there appears to be no law enforcement at the CME at present. It has happened before our very eyes at least three times this afternoon, so far. It should be stopped.

My question, though, is how the price/volume approach accommodates this kind of thing. Stand aside from the market until the law shows up?

 

[Rognvald]

GT
I think this may be dealt with by Socrates post 1034

I am in no way suggesting though that I could deal with what you describe in this way or at all.

 

[growltiger]

Rigging

GT
I think this may be dealt with by Socrates post 1034

I am in no way suggesting though that I could deal with what you describe in this way or at all.

Thanks. Post #1034 is very cogent, but does not I think deal with this point: the sudden removal of 3000 contracts from the offer side of the market makes it go up like a rocket, whatever the antecedent volume picture (so it has at least a 50% chance of doing the opposite of what you would expect if attuned to the price/volume behaviour of the same market without spoof bids).

 

[DaveJB]

Ah good,
no official answer yet - for a change it looks like I'm in time to make my own attempt, and as the only L2 that means anything to me was an aeroplane I'll not try to decode that stuff, other than to say that it looks like people are trying to trade below the current price, can't see it moving up quickly... but I still think it would go long.
A series of rising bottoms from what looks about 1540, each time scuppered by a single red bar - the latest climb stopped when it reached the 1530 (or so) bottom that presaged a short lived attempt to lift the price then a fall of what, 9 bars on low volume to the deepest low visible. That latest climb, unlike the rest, didn't drop back significantly on the red bar, the close of that bar wasn't that low compared to the open and closes about midway down the bar - virtually all the preceding reds back to the 1530 one show a definite drop from open to close with the close at the bottom of the range.
It looks a bit indecisive to me, but I think that 1530 low (and the MA's) have swapped from resistance to providing support - if it drops to the low of the longish green bar about 4 from the end I'd figure I'd got it wrong. I think I'd want a tight stop, however....
Dave

 

[qaza]

Spoofing has always been a fact of market "life" .

Does anybody look at the supposed order book [DOM] ?

 

[growltiger]

Spoofing and the order book

Spoofing has always been a fact of market "life" .

Does anybody look at the supposed order book [DOM] ?

Yes, that's how we know about the rogue orders. Their influence manifests itself through market participants responding to changes in the order book, rather than to features of the market that would be visible to someone who did not have that window.

I would not mean to imply that, absent this sort of influence, the order book would be of more than secondary influence, because the flow of market orders is so much greater than the stock of limit orders in the DOM. But the spoof orders are frequently of a size that is significant in relation to the market orders which then hit the vacuum left in the book, when the spoof order is pulled. So you go from a position in which the order book seems to be balancing the flow of market orders, and then suddenly it isn't.

 

[Rognvald]

qz

Good question "supposed". Are you saying we would be wasting our money using DOM & order improvement software
(perhaps a bit off thread and worthy of another?)

 

[SOCRATES]

Thanks. Post #1034 is very cogent, but does not I think deal with this point: the sudden removal of 3000 contracts from the offer side of the market makes it go up like a rocket, whatever the antecedent volume picture (so it has at least a 50% chance of doing the opposite of what you would expect if attuned to the price/volume behaviour of the same market without spoof bids).

Yes I absolutely understand what you imply, and indeed it does happen and the effect on the bull side is like to pop a cork out of a bottle and on the bear side it is as if to implode the very bottle itself. The efffect is very sudden and catches nearly everybody by surprise. These are volumetric ambushes of which you must be wary. Well spottted.

 

[qaza]

Yes, that's how we know about the rogue orders. Their influence manifests itself through market participants responding to changes in the order book, rather than to features of the market that would be visible to someone who did not have that window.

I would not mean to imply that, absent this sort of influence, the order book would be of more than secondary influence, because the flow of market orders is so much greater than the stock of limit orders in the DOM. But the spoof orders are frequently of a size that is significant in relation to the market orders which then hit the vacuum left in the book, when the spoof order is pulled. So you go from a position in which the order book seems to be balancing the flow of market orders, and then suddenly it isn't.

But what do you do when the spoof orders are filled by the spoofers ?

How do you analyse this ?

 

[qaza]

qz

Good question "supposed". Are you saying we would be wasting our money using DOM & order improvement software
(perhaps a bit off thread and worthy of another?)

I think the DOM is a load of nonsense. Absolutely pointless as long as market participants are able to spoof, buy/sell their own orders etc.

 

[TheBramble]

Actually you have got it back to front. What you have to do is to calculate inside your head according to market progression what would be the correct volume to expect for different developments.

Socrates, a couple of questions. (1) What do you mean by 'market progression - the price movement? and (2) WOuldn't it be useful to be calculating both price AND volume expected depending upon market progression (TBD)?

 

[TheBramble]

There has been some reference to these activities in threads about alleged market rigging, but that is not my question here. Rather, the difficulty is that the presence of the rogue (sometimes referred to as account "990N") can be detected in orders of 3000 contracts one or other side of the market (ie three times the normal aggregate bid or offer), but rarely are trades executed against these orders in any size; rather, as soon as there is a threat of that, the order is miraculously pulled, and the market rushes through the vacuum that has been left behind.

You mean not at the inside bid/ask and when they do get close to inside, they're withdrawn? In this case, there's no transaction recorded so no impact on chart price or volume. Isn't this just a LII 'game'?

 

[SOCRATES]

Socrates, a couple of questions. (1) What do you mean by 'market progression - the price movement? and (2) WOuldn't it be useful to be calculating both price AND volume expected depending upon market progression (TBD)?

Hello Bramble,

(1) The unfolding of price progression as a direct result of intent and adjustment to that intent.

(2) I already do that. But I am able to do it in my head, this is what I keep on saying only to be rubbished by the idiots. Even when I give a demonstration of an extension of it (which is futurology) in a public forum and all the entries are logged with a time stamp against a chart provided by a stranger in order to guarantee impartiality, reasons are found not to believe it, against all hard evidence that it is fact , and not science fiction !

 

[Mr. Charts]

Thank you very much to everyone who ventured a judgement and explained their reasons.
There are many pieces to the jigsaw of the markets, it is a multifactorial dynamic environment where, imho, no one factor can be relied upon all the time.
There are various patterns which I have found over the years to be very reliable in differing situations and market types.
There are no TA “indicators” which are anything but intermittently useful, again depending on market type.
Reading the tape, momentum, level 2, chart analysis, price and volume, my own patterns as Rob alluded to, all are integrated to read MARKET SENTIMENT.
In my experience more than two factors need to come together to create a high probability trade. Any contrary factors must be assessed objectively.

My trade was a short within a second or two of the screen shot.

NONE of the following first factors in itself is a tradable signal, they are merely “edges” which added together become significant.

It is true that higher highs and higher lows are forming and the 2 emas used have crossed and this suggests a possible rise, but that is very weak as my pattern knowledge and experience tells me that is unreliable in this type of negative situation.

The price had reached the resistance of the immediately preceding pivot low, so any over shoot was unlikely to be more than 5-10 c. This set the MAXIMUM loss on the trade. I say that because very often I do not wait for a stop level to be hit before exiting a trade. If the evidence is that a move is going against me I will sometimes exit straight away and not necessarily wait for a trailing stop or stop loss to be hit.
This partly depends on momentum.
Why should I stay in a trade that is going against me? Would I enter at that point, if not why remain in? I am in this business to keep my wife and three children comfortable, NOT to want to be proved “right”. It is about being CONSISTENTLY PROFITABLE, not “right”. I have eradicated my ego from my trading, since ego is your worst enemy.
This self control and change takes a little time and effort…..as Socrates suggests.

Looking at level 2 and time and sales, there was nothing VERY significant, BUT the four market participants on the ask side had all moved DOWN in their last change.
No clues were available from axe behaviour.
Now this might have been transitory, but remember the situation is multifactorial and dynamic and I had been intermittently watching this stock for several minutes and had seen sellers coming in a few times as the price rose - as can be seen on the chart.
Actual size on the bid and ask sides is sometimes significant but not usually.
Players are there to outwit the unwary and untrained. Do you really expect them to telegraph their intentions to you?!

Now we get to the crux of the matter.
THE major factor.

This has already been described PERFECTLY by Socrates:

“This does not look right for a strong stock. If this stock was a strong stock it would have rocketed upwards from the bottom but his has not happened. There is no sign of serious buying at the bottom, yet it is tentatively supported and allowed to trickle upwards, why ? It does not display characteristics you would expect to see in conditions of stock shortage.Yet in the second last bar there is activity. If this activity were serious buying the last bar would be up. well up, but it is not. Looking at the background this second last bar may be buying to close shorts. And the last few bars have very narrow spreads and curling over.
Short ! But with a tight stop above. My reason is that the weakness in the background does not seem to have been decisively resolved, in addition current price development is narrow with a reluctance to lift,
in addition the volume is declining, and in its present position this little top is lower than the previous one.
I am not making a bearish case for it, I am going on gut feeling. Short, definitely.

The other detail that fascinates me is the fact that throughout all this market action there is serious activity on up bars, in a falling market. These up bars are quite distinctive, there is no attempt to hide a willingness to sell into rises to trap weak holders again and again, shameless it is, so on balance it is still short, BUT, I say a tight stop because I have seen situations like this one in which the herd can be stimulated into buying so that the market is lifted to trap them and then plop ! Down it goes!”

Thank you, Socrates, for saving me a lot of explanatory time and effort with my slow two finger typing ;-))

Of course, price and volume behaviour is absolutely crucial.
I wouldn’t have posted on this thread at all if the essence of this trade wasn’t price and volume, not indicators.

Other contributors making good points were ollie who saw it was all there and rdstagg who was the only person to mention a target, but thank you to everyone who had the guts to post.

I am not saying anyone is right or wrong, they have different interpretations – that’s what makes a market.
It’s not about being right or wrong, it’s about being consistently profitable.

Talking of gut feeling, as Socrates did, leads me to suggest that perhaps such “gut feeling” is the product of knowing what you are doing, training, thinking, seeing all the factors in a free form way without preconceived views, experience and so on all being processed by your brain both at and also beneath the conscious level.


The risk was 5-10c, as I said. The reward “target” was the low of the day, 36c below at 57.81

So what happened in this trade?

It moved 8c against me, but reading level2 and T&S and thus SENTIMENT I could see the buying was anaemic – thin and weak – with market participants happy to sell to those buyers who were probably shorts covering for all the reasons given by those who said they would go long.

It then rolled over as I expected and as Socrates predicted.
I would expect no less from you, sir ;-))


Now the attached screen shot shows my point of exit, 3c better than my target for a 39c profit.

Would anyone care to say why I exited and why?

Richard

 

[SOCRATES]

Bramble,

1055#

There is no transaction recorded because the trade does not take place but it creates an effect, which is what is being discussed.

 

[SOCRATES]

Thank you very much to everyone who ventured a judgement and explained their reasons.
There are many pieces to the jigsaw of the markets, it is a multifactorial dynamic environment where, imho, no one factor can be relied upon all the time.
There are various patterns which I have found over the years to be very reliable in differing situations and market types.
There are no TA “indicators” which are anything but intermittently useful, again depending on market type.
Reading the tape, momentum, level 2, chart analysis, price and volume, my own patterns as Rob alluded to, all are integrated to read MARKET SENTIMENT.
In my experience more than two factors need to come together to create a high probability trade. Any contrary factors must be assessed objectively.

My trade was a short within a second or two of the screen shot.

NONE of the following first factors in itself is a tradable signal, they are merely “edges” which added together become significant.

It is true that higher highs and higher lows are forming and the 2 emas used have crossed and this suggests a possible rise, but that is very weak as my pattern knowledge and experience tells me that is unreliable in this type of negative situation.

The price had reached the resistance of the immediately preceding pivot low, so any over shoot was unlikely to be more than 5-10 c. This set the MAXIMUM loss on the trade. I say that because very often I do not wait for a stop level to be hit before exiting a trade. If the evidence is that a move is going against me I will sometimes exit straight away and not necessarily wait for a trailing stop or stop loss to be hit.
This partly depends on momentum.
Why should I stay in a trade that is going against me? Would I enter at that point, if not why remain in? I am in this business to keep my wife and three children comfortable, NOT to want to be proved “right”. It is about being CONSISTENTLY PROFITABLE, not “right”. I have eradicated my ego from my trading, since ego is your worst enemy.
This self control and change takes a little time and effort…..as Socrates suggests.

Looking at level 2 and time and sales, there was nothing VERY significant, BUT the four market participants on the ask side had all moved DOWN in their last change.
No clues were available from axe behaviour.
Now this might have been transitory, but remember the situation is multifactorial and dynamic and I had been intermittently watching this stock for several minutes and had seen sellers coming in a few times as the price rose - as can be seen on the chart.
Actual size on the bid and ask sides is sometimes significant but not usually.
Players are there to outwit the unwary and untrained. Do you really expect them to telegraph their intentions to you?!

Now we get to the crux of the matter.
THE major factor.

This has already been described PERFECTLY by Socrates:

“This does not look right for a strong stock. If this stock was a strong stock it would have rocketed upwards from the bottom but his has not happened. There is no sign of serious buying at the bottom, yet it is tentatively supported and allowed to trickle upwards, why ? It does not display characteristics you would expect to see in conditions of stock shortage.Yet in the second last bar there is activity. If this activity were serious buying the last bar would be up. well up, but it is not. Looking at the background this second last bar may be buying to close shorts. And the last few bars have very narrow spreads and curling over.
Short ! But with a tight stop above. My reason is that the weakness in the background does not seem to have been decisively resolved, in addition current price development is narrow with a reluctance to lift,
in addition the volume is declining, and in its present position this little top is lower than the previous one.
I am not making a bearish case for it, I am going on gut feeling. Short, definitely.

The other detail that fascinates me is the fact that throughout all this market action there is serious activity on up bars, in a falling market. These up bars are quite distinctive, there is no attempt to hide a willingness to sell into rises to trap weak holders again and again, shameless it is, so on balance it is still short, BUT, I say a tight stop because I have seen situations like this one in which the herd can be stimulated into buying so that the market is lifted to trap them and then plop ! Down it goes!”

Thank you, Socrates, for saving me a lot of explanatory time and effort with my slow two finger typing ;-))

Of course, price and volume behaviour is absolutely crucial.
I wouldn’t have posted on this thread at all if the essence of this trade wasn’t price and volume, not indicators.

Other contributors making good points were ollie who saw it was all there and rdstagg who was the only person to mention a target, but thank you to everyone who had the guts to post.

I am not saying anyone is right or wrong, they have different interpretations – that’s what makes a market.
It’s not about being right or wrong, it’s about being consistently profitable.

Talking of gut feeling, as Socrates did, leads me to suggest that perhaps such “gut feeling” is the product of knowing what you are doing, training, thinking, seeing all the factors in a free form way without preconceived views, experience and so on all being processed by your brain both at and also beneath the conscious level.


The risk was 5-10c, as I said. The reward “target” was the low of the day, 36c below at 57.81

So what happened in this trade?

It moved 8c against me, but reading level2 and T&S and thus SENTIMENT I could see the buying was anaemic – thin and weak – with market participants happy to sell to those buyers who were probably shorts covering for all the reasons given by those who said they would go long.

It then rolled over as I expected and as Socrates predicted.
I would expect no less from you, sir ;-))


Now the attached screen shot shows my point of exit, 3c better than my target for a 39c profit.

Would anyone care to say why I exited and why?

Richard

My Pleasure Sir !