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Thread: stepping up or down the bid?????????
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Old 11-07-2007, 10:23 PM
strtedat22 strtedat22 is offline
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This member is the original thread starter. Re: stepping up or down the bid?????????
Quote:
Soultrader
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Im not sure if I follow 100% because of the lingo but stepping off the bid/ask is something that can be spotted on the price ladder or level 2. You might see a big size holding the bid a few levels down and then all of a sudden he steps away.

For example, on the Nikkei futures each bid/ask is about 400-500 contracts. Once in a while you will see 1000+ contracts at the bid/ask a couple levels above/below the current market price. If the trader is holding the bid 2 levels down and steps off, this indicates he is sensing price to drop lower and loses interest in buying. Usually you will see price drop. Vice versa for the ask.

Lets say the markets is tanking rapidly. You may also see the bid getting extremely thin and ppl just stepping off it. There is no buying interest there and no support. Price will continue to drop until the first wave of short covering comes in. Short covering can be spotted easily as they do not hold the bid but send a market order. So you will see price jump a level rapidly. This is the case for financial instruments in which the bid/ask is thick and one big trader can take out the bid/ask.
thanks soul for that reply. ill have another question real soon once i dentify the buyer at certain level.

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