Institutions Buying Vs Traders

[theman]

Hi there

EOTPRO have a new indicator that plots 3 subgraphs (indicator),

the 1st one shows you how many novice traders (so to speak) are buying/selling

the 2nd shows the how many professional traders are buy/selling

the 3rd one shows you how many institutions are buy/selling. The institutions being the big boys in trading.

So, if a novice (1st one) are selling, there making the wrong move as the 3rd subgraph i.e. institutions are buying.

So youre not supposed to trade like small traders i.e. 1st one, you go with the Institution traders i.e. 3rd one.

Dont know if this makes sense?



I hope you can help me?

Thanks

[brownsfan019]

If there is a trial, get it and try it out for yourself. Report back on what you see.

[brownsfan019]

He wants to know if what this vendor is offering makes sense; i.e. can they actually provide an indicator that shows when big money is buying.

[theman]

Thats correct brownsfan19

I just want to know how there doing it, do you think they count the volumn for or something?

[atto]

My hunch is that their breaking order sizes into "small", "medium", and "large" (such as 1-10 = small, 10-50 = medium, 50+ large, or whatever), and then doing volume at bid/ask for each.

Not too complicated, and the concept has some definite uses. Not sure if you could trade straight off it, though.

[trader273]

	Quote:	atto
	My hunch is that their breaking order sizes into "small", "medium", and "large" (such as 1-10 = small, 10-50 = medium, 50+ large, or whatever), and then doing volume at bid/ask for each.

Wouldn't the use of iceberg orders really make this an inaccurate view? I dont know, i would be very careful of anyone selling something that looks like it actually can make money. If it could actually make money there's no need to sell it.

[theman]

As you can see, the orange one is where you get the novice traders selling (when its below the 0 line i.e. white line), but if you look at the purple line I put, the institutions are buying (when its above the 0 line i.e. white line), and if you look at the chart, thats what happened.

How cool!

[MidKnight]

	Quote:	trader273
	Wouldn't the use of iceberg orders really make this an inaccurate view? I dont know, i would be very careful of anyone selling something that looks like it actually can make money. If it could actually make money there's no need to sell it.

Exactly, I think you are right. I also agree with atto in how it is choosing to segment. Iceberging certainly happens quite a lot, and I have tried to measure that by rebuilding 1 seconds worth of ticks. However, I read there are also more involved methods of iceberging then just sending a stream of small orders in close succession. I have explored various types of volume breakdown segmenting in the past. I didn't find any consistent mechanical edge there. Using discretion, there may well be an advantage.

A model like this, you also assume that each order is a directional bet and they actually want the price to move the way they are pushing. I used to believe this, but have since revised my beliefs.

With kind regards,
MK

[stanlyd]

keep in mind that just because it worked today does not mean it will work tomorrow and being consistent is the hard part of the game. So maybe you keep an eye on this indicator daily, log it's gains and losses over 6 months and see what the results are. Then think about how it works or doesn't work in a trading plan. I would be up for hearing the results.

[Blu-Ray]

	Quote:	stanlyd
	keep in mind that just because it worked today does not mean it will work tomorrow and being consistent is the hard part of the game. So maybe you keep an eye on this indicator daily, log it's gains and losses over 6 months and see what the results are. Then think about how it works or doesn't work in a trading plan. I would be up for hearing the results.

Exactly.................. ..... the bloke's only developed this a week ago and it can't be backtested as it only runs on live data.

So he's only eyeballing the nice trades, amazing how the human mind can spot these.

Cheers

Blu-Ray