'No indicators' revisited
- Thread starter ford
- Start date
- Watchers 53
growltiger said:
But if a big operator is looking to put on a big order , say more than 3000 lots, then our spoofer is going to get hit. Its not a question of calling his bluff, its simply business. As for being the wrong position, the mkt direction is immaterial if you're hedging and transactions of this size are normally part of a hedge or something similar.
3000 lot hit
The more obvious answer is that an algorithm plays this game - faster than the human eye or hand so its highly unlikely to get taken out as it will be rule based and pulled before any size can get in?? Its designed to make money.
Second if you look at order routing rules at the exchange the mm's have a certain leeway before accepting the trade (especially one of that size).
Its just part of the game.
Russell
The more obvious answer is that an algorithm plays this game - faster than the human eye or hand so its highly unlikely to get taken out as it will be rule based and pulled before any size can get in?? Its designed to make money.
Second if you look at order routing rules at the exchange the mm's have a certain leeway before accepting the trade (especially one of that size).
Its just part of the game.
Russell
growltiger said:
rdstagg said:
If the last price was 115 and there are 500 lots offered at 115.00 , 500 lots offered at 115.25 and our spoofer is offering 3000 lots at 116 then if someone puts in a bid for 4000 lots at 116 our spoofer is hit.
I presume the mm's are the market makers ? .............. they are not relevant
TheBramble
Legendary member
- Messages
- 8,394
- Likes
- 1,170
Yep.qaza said:
TheBramble
Legendary member
- Messages
- 8,394
- Likes
- 1,170
OK - I'm throwing this one out to the wider 'No Inds' audience in the hope you can let me know if I'm interpreting this hypothetical(!) situation correctly.
Let's use our old friends GILD from Richard's post.
They're currently trading 57.76/78 with max size of 10.
We can't see much of the Bid depth because of the chart, but for argument's sake - let's say there is a number of orders at each 1c level to 5c on both Bid & Ask.
We then see SCHB come in with an Ask at 57.89 with a size of 500. That is, 50 times the size of 'normal' and at 11c away from the inside.
What are we to think?
Here we go:-
Level-1: The rank newbie imagines that SCHB really do want to unload all that stock at that level (rather than just quietly sell small lots at the inside) and either stays out - or more likely, closes a long or goes short. The impact of this being that there is downward pressure on the price. He/She thinks SCHB want to sell. So they go short.
Level-2: The next level up player imagines that SCHB know what the level-1 players are going to do. They wait for SCHB (who are waiting for Level-1 players to take the price down) to take their Ask away and start buying the now lower-priced stock in smaller lots at the inside Bid directly or through other ECNs. SCHB may not take their Ask away until their buying starts to raise the price to an extent that their spurious Ask of 500 gets closer to the (rising) inside Ask. At this point, the Level-2 players also pile in, taking the price higher.
Level-3: The next level up know that SCHB know what level-1 and level-2 players are thinking (and depending upon the strength of these 2 levels - relative to each other) wait for one side to win out before taking their view.
I'm I going too far with this? How many levels are there normally operating? What level do the majority operate at? What are the strengths of the levels relative to each other? I have a distinct impression that the longer I look at this - the more chance there is of me seeing the back of my head.
Let's use our old friends GILD from Richard's post.
They're currently trading 57.76/78 with max size of 10.
We can't see much of the Bid depth because of the chart, but for argument's sake - let's say there is a number of orders at each 1c level to 5c on both Bid & Ask.
We then see SCHB come in with an Ask at 57.89 with a size of 500. That is, 50 times the size of 'normal' and at 11c away from the inside.
What are we to think?
Here we go:-
Level-1: The rank newbie imagines that SCHB really do want to unload all that stock at that level (rather than just quietly sell small lots at the inside) and either stays out - or more likely, closes a long or goes short. The impact of this being that there is downward pressure on the price. He/She thinks SCHB want to sell. So they go short.
Level-2: The next level up player imagines that SCHB know what the level-1 players are going to do. They wait for SCHB (who are waiting for Level-1 players to take the price down) to take their Ask away and start buying the now lower-priced stock in smaller lots at the inside Bid directly or through other ECNs. SCHB may not take their Ask away until their buying starts to raise the price to an extent that their spurious Ask of 500 gets closer to the (rising) inside Ask. At this point, the Level-2 players also pile in, taking the price higher.
Level-3: The next level up know that SCHB know what level-1 and level-2 players are thinking (and depending upon the strength of these 2 levels - relative to each other) wait for one side to win out before taking their view.
I'm I going too far with this? How many levels are there normally operating? What level do the majority operate at? What are the strengths of the levels relative to each other? I have a distinct impression that the longer I look at this - the more chance there is of me seeing the back of my head.
I know how you feel, sometimes it seems like you're going to disappear up your own a***.
My understanding is that major MM don't play that many games, if they've got major orders to fill thats enough to try and manage. Having said that they will in quiet periods, but when the action is fast they're just trying to position themselves like everyone else.
Personally I don't take any notice of orders way below the inside price (but you're right why would a MM be showing 500 when they only have to show 1 unless they wanted to create a certain impression ?). I like to see the ax on the inside with time and sales going off showing real trading, especially if the ax is showing 1 and keeps refreshing to meet many more orders. Sure others will jump in front and he may back off a little and come back a few minutes later, he may even go on the inside on the other side to create an impression that he's trading around a price level, but when you see him on the inside bid 10 times more than on the inside ask you know which way the price is going to go.
By the way doesn't SCHB deal mainly with retail orders and so is never the ax ?
You can probably tell I'm new to this game, so feel free to tear it apart,
Porks.
My understanding is that major MM don't play that many games, if they've got major orders to fill thats enough to try and manage. Having said that they will in quiet periods, but when the action is fast they're just trying to position themselves like everyone else.
Personally I don't take any notice of orders way below the inside price (but you're right why would a MM be showing 500 when they only have to show 1 unless they wanted to create a certain impression ?). I like to see the ax on the inside with time and sales going off showing real trading, especially if the ax is showing 1 and keeps refreshing to meet many more orders. Sure others will jump in front and he may back off a little and come back a few minutes later, he may even go on the inside on the other side to create an impression that he's trading around a price level, but when you see him on the inside bid 10 times more than on the inside ask you know which way the price is going to go.
By the way doesn't SCHB deal mainly with retail orders and so is never the ax ?
You can probably tell I'm new to this game, so feel free to tear it apart,
Porks.
china white
Established member
- Messages
- 979
- Likes
- 12
sorry lads/lasses - I've been away from action for some time hiding in the mexivan countryside 
what is going on with our thread these days? where is the hot action? i also recall on return from one of my journeys to mexico a cupl of weeks ago I saw a new thread "From the basement..." which now seems to be gone - at least I cannot find it..... cheers all
what is going on with our thread these days? where is the hot action? i also recall on return from one of my journeys to mexico a cupl of weeks ago I saw a new thread "From the basement..." which now seems to be gone - at least I cannot find it..... cheers allTheBramble
Legendary member
- Messages
- 8,394
- Likes
- 1,170
I'm glad they didn't find you. Welcome back.china white said:sorry lads/lasses - I've been away from action for some time hiding in the mexivan countryside
darktone
Veteren member
- Messages
- 4,019
- Likes
- 1,086
TheBramble
Legendary member
- Messages
- 8,394
- Likes
- 1,170
DT - don't know about anybody else, but I'm finding it tough enough working with just price & volume. Take volume away as well and it gets interesting...not.
Interesting thing is, when there's a lack of any other information - just price, my eye tended to make out either a double-top or a head-and-shoulders and I don't 'do' traditional chart patterns.
Took me back to how I felt when I was a real newbie and saw trading opportunities in every chart I looked at. I eventually cured myself of that by cunningly running out of money.
I don't have the skills to make any judgement on this chart. Why the price performed the way it did, or what it would most probably do next. I'll be very interested in other FXers (and non-FXers) interpretations.
Interesting thing is, when there's a lack of any other information - just price, my eye tended to make out either a double-top or a head-and-shoulders and I don't 'do' traditional chart patterns.
Took me back to how I felt when I was a real newbie and saw trading opportunities in every chart I looked at. I eventually cured myself of that by cunningly running out of money.
I don't have the skills to make any judgement on this chart. Why the price performed the way it did, or what it would most probably do next. I'll be very interested in other FXers (and non-FXers) interpretations.
SOCRATES
Veteren member
- Messages
- 4,966
- Likes
- 136
Darktone, sorry I have been busy with the Basement. This chart you show has a propensity for weakness in this instrument that at a glance I can tell you will fall to at least the previous low, and perhaps to 12250 or thereabouts.darktone said:
Similar threads
- Article
