[stasbz]

Hello!
times and sales is useful information.
But what about depth market? Can we determine buy and sell pressures?
i have watched ES and down trand day were more orders on offer and up trend day were also more orders on offer, but market goes up.

[Do Or Die]

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Originally Posted by MightyMouse »

When the bid is stacked on the DOM one would guess that there are many traders trying to buy at the same time. since there appears to be more buyers than sellers. One could look at it and think the market is poised to go higher. This guess could cause an unsuspecting buyer (either a weak long or a scared short) to buy via market order so as to not be left behind. Those with the large buy orders are actually trying to get buyers to jump ahead of the bid and buy right into their standing sell orders. The buy orders are almost all fakes and are really sellers who have standing sell orders and want to get filled as high as possible. Once sold and presumably ( for this example) short, then they will distribute more contracts or shares into the standing buy orders and attempt to force the weak longs who enter long to sell lower into the sellers standing buy orders.

There are multiple variations of how this can unfold. you can get clues by watching the DOM and T&S. So, for example, if the bid is stacked and there are a lot of trades going off at the ask, you can expect a different reaction than if the ask is stacked and there are a lot of trades going off at the ask.

You can gain good information by watching both.

[brownsfan019]

In this thread from 2007 (thank you TL search) I documented what appeared to me at the time as games on the DOM.

[cjforex]

Isn't this similar to the old "tape reading"?

-cjforex-

[MightyMouse]

The Dom and T&S, in my mind, provide the the most immediate view of the current market conditions that are available You're going to need to become a student of that particular market to effectively use the DOM and T&S. There are a lot of different combinations of what you can see and you need to learn what each of those mean when the market is at the high for the day, the low, with high volume, low volume, no volume, net selling, net buying, inside buying, outside buying, inside selling, outside selling, etc.It takes time to learn what each combination means but it is worth it because when you understand what is going on, then you will be on the right side of the market and have confidence to stay in longer and get bigger gains.

You'll also learn how blind you have been and why 90% (or whatever percentage is right) lose. Markets do not move because of a particular pattern exists; instead they move because there are enough traders willing to buy above the bid or sell below the ask. Generally, the opposite of the expectation happens a lot when a popular pattern exists.
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[TheNegotiator]

In my experience, most depth of market products are designed so poorly that they offer very little use to me as a trader other than order entry. I have hassled companies in the past such as Ninja to see if they might implement some changes, but to no avail. In my opinion currently the only product which allows you to properly 'read' the DOM is Trading Technologies X-Trader. Btw you will need a pretty decent connection if you wish to trade in this way. An alternative method for reading the information the DOM should provide is by using bid x ask style charting which was made popular by Market Delta (I believe). It is available via other platforms now. Sierra I think have it. You can pay for Ninja add-on indicators which use it. I'm sure there are others too.

I don't really use the market order book depth much in the sizes queuing, although it can be useful if you watch it a lot to see when the 'game playing' is about to begin.

[brownsfan019]

Originally Posted by MightyMouse »

The Dom and T&S, in my mind, provide the the most immediate view of the current market conditions that are available You're going to need to become a student of that particular market to effectively use the DOM and T&S. There are a lot of different combinations of what you can see and you need to learn what each of those mean when the market is at the high for the day, the low, with high volume, low volume, no volume, net selling, net buying, inside buying, outside buying, inside selling, outside selling, etc.It takes time to learn what each combination means but it is worth it because when you understand what is going on, then you will be on the right side of the market and have confidence to stay in longer and get bigger gains.

You'll also learn how blind you have been and why 90% (or whatever percentage is right) lose. Markets do not move because of a particular pattern exists; instead they move because there are enough traders willing to buy above the bid or sell below the ask. Generally, the opposite of the expectation happens a lot when a popular pattern exists.
.

I'd love to see some examples of this MM. Sounds great in theory, but care to elaborate?

[gosu]

For me, the DOM ranks very low in usefulness, and I no longer monitor it. I look to the bid/ask and t&s when an action is required. Almost 100% of my monitoring is spent on price and volume on the charts.