'No indicators' revisited

[SOCRATES]

In essence yes to both questions.

But the answer to (1) bifurcates, because if you decide to move up a time frame you have to grit your teeth and expect to ride through gyrations (turbulence pockets) that would not occur without the spoofing; and if you decide to confront the spoofer, as in my provisional response, you will be moving down a frame and adding another dimension to your trading (ie resolving how to handle the movements of the spoofer).

As Quercus has said, the spoofer appears to be offering a free ride in the direction opposite to the spoof order, and this is a challenge. But this brings me to your second point, mental and moral resources: I am not sure whether it is possible to sustain the level of concentration required to accommodate the complexity of the added dimension, nor whether the effort will be net profitable (whereas in the absence of the spoofer price/volume trading clearly can be).

I agree with you 100%.
This is why the development of the correct mental attitude is crucial with respect to to your second point.

 

[SOCRATES]

A mention in dispatches - marvellous!

I still struggle to understand the L2 though.

My original post had this as a short from v early in the morning so I would have put this in the view every 30 min bin with a trailing stop.

As to Mr Charts exit - well I would be out of half at 57.83 as per my previous post and my trailing stop would now be around 58 - thats because I am looking to take this to a swing trade.

I am now in a no lose situation and can move on to manage another trade and let the market decide whether its going to give me more money or not.

I know lots of people will shake their heads at this - but it works (for me)

I thought Socrates observations re the % of people willing to have a go was spot on. [Note to Socrates - I still don't get half of what you say but the half I do get I find strangely warming!]
You remind me of Phantom Of the Pits - that isn't you is it??

It may elicit more response if this were in a board entitled -"Chart lesson of the day" or something.I only found it myself thru Triplepack who kindly pointed it out to me.

Lets have another and see if we can't get more response.

Russell

Don't you worry Staggy, you just stick with us and you will be alright !

 

[growltiger]

Attitude enough?

I agree with you 100%.
This is why the development of the correct mental attitude is crucial with respect to to your second point.

Thank you.

Correct mental attitude: I am not sure attitude is sufficient. The mental flexibility to allow that there is now an additional reason to abandon a trade is one thing - and that is attitudinal. But the effort of scrutinising the DOM screen for the comings and goings of the phantom orders is very tiring - and that is physically draining. But perhaps it is a learning process that leads to a lower-energy solution in the end.

 

[rdstagg]

Anything but Staggy!
Reminds me of school.

Don't you worry Staggy, you just stick with us and you will be alright !

 

[Mr. Charts]

OK, I know I said I wouldn't post on this thread again, but I do very occasionally trade purely by cleansing my mind of everything and acting on "sensory awareness" only. No indicators, no patterns, zilch. No I don't show people "how" to trade like that.
Please don't laugh, it can be done. I normally trade 1000 or 2000 shares, but when I act on "sensory awareness" I drastically reduce the size to 400 - why? - I am very cautious.
I thought it might be an idea to do that this afternoon after my posts here yesterday.

Short MERQ 43.55 and covered 43.195
No chart because it was irrelevant, but the broker execution screen for the doubters......
The actual low was 43.15 so the "sensory awareness" worked yet again.
Profit + 35c in 28 seconds.
OK, I know it's not the normal sort of number of shares I trade and it's only a little profit of $140, but earning $5 per second isn't to be sneezed at in most professions.

Is that the sort of result you "dark siders" who trade without indicators are talking about? ;-)

Anyway, I really will leave this thread to others now; sorry to have interrupted ;-)

Richard

 

[Salty Gibbon]

Is " Sensory Awareness" another way of saying " gut feeling" ?

 

[Mr. Charts]

Not sure that it is, Salty. I don't do it often enough ( employ "sensory awareness" ;-) )
More auto processing without conscious effort or thinking.
That does sound better, though ;-)

 

[growltiger]

Spoofing the ES

Rognvald suggested that I try to capture the activities of the phantom spoofer on film, so to speak. I have accordingly taken a trio of screen dumps which show the phenomenon precisely, although not to its most dramatic effect. The charts are 2 minute bars. Time stamps are provided by the eSignal quote window at the top right hand corner of the screen, and you should check these times when opening the charts, as the thumbnails may be out of sequence.

In the first of these (ES Normal) the market is in a normal state, at 18.16 London time; the DOM shows several hundred contracts bid or offered at each of the 5 ticks above and below the active price of 1114.75. I have no position, but there has just been a very attractive spike in volume and reversal bar after a quick 4pt sell-off and I am contemplating opening a long position if the price stops falling in the next couple of bars.

In the second screen (ES high offer) , the market has continued with only normal bids and offers visible in the DOM, I have opened a position at 1115, and the market has stagnated for ten minutes at 1115.0 to 1115.25. At 18.31, the phantom offer appears: 3,695 offered at 1115.75. Beyond reflecting that this is perversely good for my position, I do nothing, but await events.

Screen three (ES vanish). At 18.33 the phantom order is pulled. The price kicks up momentarily to 1116, stalls, and I exit having made half a point. You can see from the volume bars on the chart that the total volume at no point in this period reaches 3,000 - proving that the order was not crossed thorugh the market - and at the time the order vanished, it was in any case not in imminent danger of being traded against.

You can imagine how exasperating (even agonising) the playing out of this routine would have felt if the order had appeared as a "supportive" bid below an active long position. Detachment difficult to maintain.

 

[Rognvald]

GT
Thanks for taking the trouble to let us all see the sort of effects you were talking about for ourselves on the 2 min chart. Perhaps others more qualified than I would like to comment.

I've studied the 3 screen dumpss you provided and there doesn't seem to be any sign of the 3000 contracts going through. There is an increase in price though although you don't show where it went after that. I found the price/volume histogram interesting I was also interested in the overall weight between buy and sell orders on the DOM.

Would anyone else like to make any observations

 

[growltiger]

GT
Thanks for taking the trouble to let us all see the sort of effects you were talking about for ourselves on the 2 min chart. Perhaps others more qualified than I would like to comment.

I've studied the 3 charts you provided and there doesn't seem to be any sign of the 3000 contracts going through. There is an increase in price though although you don't show where it went after that. I found the price/volume histogram interesting

Would anyone else like to make any observations

The 3000 contracts did not go through the market, that is the point. They appeared (screen 2) and were removed (screen 3). The price then immediately went up a couple of ticks, through the level at which the phantom offer had been posted, before falling away again. I would not be surprised if the spoofer went short as the price fell back through 1115.75 but in a much smaller size.

 

[Rognvald]

Sorry if I did not make it clear that I understood that - just trying to emphasise! You could well be right - is this legal? Is not the placing of this size of "offer" very risky as it must be removed before being hit. Does its removal not have an effect on the size of others on the table at a higher price as well as on the price at which deals were subsequently done

The 3000 contracts did not go through the market, that is the point. They appeared (screen 2) and were removed (screen 3). The price then immediately went up a couple of ticks, through the level at which the phantom offer had been posted, before falling away again. I would not be surprised if the spoofer went short as the price fell back through 1115.75 but in a much smaller size.

 

[oatman]

He must be able to stand a 3000 lot hit and once the market knows his style he will get hit for the size at some stage.

 

[robq]

"OK, I know I said I wouldn't post on this thread again, but I do very occasionally trade purely by cleansing my mind of everything and acting on "sensory awareness" only. No indicators, no patterns, zilch. No I don't show people "how" to trade like that"

Richard, even though these are minute bars, and assuming my attachment comes through, could the 9(14).32 bar have been considered to be an upthrust on a wide spread with high volume, closing near the low, and an indication of weakness, and justifying your trade.? So it mightn't have been just pure guts!

Rob

 

[Mr. Charts]

Very good analysis, Bobby, but I just sat there and watched the price move and traded both the entry and exit when it "felt" right. I didn't look at candles, volume or anything else, just the price movement.
I suspect it is like many things one does autonomically. I use that last word advisedly.
I normally trade very practically, but can shift into an "adjacent" way if I choose. I've only done it several times but every trade has been profitable so far.
However, I must say that though it feels very comfortable when I trade like that, my strongly practical and ultra - cautious side remains wary.
Richard

 

[SOCRATES]

"OK, I know I said I wouldn't post on this thread again, but I do very occasionally trade purely by cleansing my mind of everything and acting on "sensory awareness" only. No indicators, no patterns, zilch. No I don't show people "how" to trade like that"

Richard, even though these are minute bars, and assuming my attachment comes through, could the 9(14).32 bar have been considered to be an upthrust on a wide spread with high volume, closing near the low, and an indication of weakness, and justifying your trade.? So it mightn't have been just pure guts!

Rob

Actually, I have just had a look at your post and your chart.
It often happens that a gap down like that is a spoof, then sharply followed by an up bar.
The appearace of that up bar often induces a surprising number of people to buy the market.
Now the next bar continues to motor north, against all reason, and ends up by closing the gap. This is not funny if you are short. In this case the bar that precedes the bar you mention has a serious bottomtail and the volume is not insignificant, then the next one opens and proceeds in a northerly direction,. Is this is gap closing situation ? You can only know when is closes and confirms the volume to be very high and that there is a long toptail. Even this is not guaranteed in a market opening gambit like this one that this is weakness all the way,as I have seen this and then observed a pick up to close the gap. The only reliable clue on a gap down is when there is a smallish toptail in the first bar or bars and then it begins to collapse. In the first example confirmation would arrive too late and at too low a price for the R/R ratio to be of advantage. Therefore, I am not convinced by the weakness argument but I can see that the sentiment was correctly read at the top of the upthrust and why a snap short was taken at level 43.55. Richard obviously spotted the unwillingness of the price to progres north and shorted it. This was before the upthrust was formed, evidently.

 

[Finirama]

Socrates,

Quick question if i may....is a third drop down with the highest volume on the third drop indicative of a quick high volume reversal allowing the MMs to ofload there last remaining stock? I've noticed it on the last 2 major drops and was wondering whether this generalisation is a current one.

Thanks in Advance
Fin

 

[SOCRATES]

No Finny, this is something different I will PM you in the morning.

 

[rdstagg]

Linda Raschke''s 3 little Indians maybe?

russell

Socrates,

Quick question if i may....is a third drop down with the highest volume on the third drop indicative of a quick high volume reversal allowing the MMs to ofload there last remaining stock? I've noticed it on the last 2 major drops and was wondering whether this generalisation is a current one.

Thanks in Advance
Fin

 

[SOCRATES]

Who is Linda Raschke ?

 

[growltiger]

The 300 lot hit

He must be able to stand a 3000 lot hit and once the market knows his style he will get hit for the size at some stage.

People have been saying this. But for two reasons I think it is unlikely:

(1) The phantom order is almost always added to the order book when there is a buffer of a couple of hundred contracts at the spoofer's chosen price, which will get hit first, thus giving time for the order to be pulled if it becomes the inside price;
(2) Market orders of that size do not exist. 100 contracts is a fairly big order. To call the bluff of the spoofer would take very swift concerted action by a large number of the larger players. And it is probably the wrong position to take; the spoofer's technique is to pull an order from what he thinks is the wrong side of the market, making it move a few ticks against its natural flow. So this is not a target that other traders would naturally aim at.