[phantom]

Originally Posted by AgeKay »

No, this thread is not about day trading secrets.
This thread is in fact only about trading with the order book and nothing else.

Then you should have called the thread "How to scalp like a pro" instead of "Day trading secrets."

I will not post to your thread anymore. Sorry for ruffling your feathers.

[Nemesis]

Originally Posted by AgeKay »

phantom, your thread has not much to do with what I wrote here, but still you made three posts were you tell people to read your thread. I think everyone understands now that you want everyone to read your thread. That's ok, but please stop referencing it in my thread as it adds nothing to this discussion.

Im glad Phantom referenced his thread considering his shares and yours shares nothing but ambiguity.

[AgeKay]

Originally Posted by Nemesis »

Im glad Phantom referenced his thread considering his shares and yours shares nothing but ambiguity.

I am sorry you feel that way. It might seem ambiguous compared to charts because it's a lot easier posting a few charts and saying "look here, this looks like that so you do that" or "do this when this line crosses that line" but trading isn't that easy. There is so much going on. You need to take it all in and consider everything that has happened before and what happends next. I would never be able to explain every facet of it even if I wanted to. I just received a PM asking me about one of my earlier posts. I quote this post here so you get an idea of what goes on in your head when you trade this way:

Originally Posted by AgeKay »

I give you an example of a trade this morning in Bund where I was sure what was going to happen. And I was right - to the tick on both the entry and exit. Bund and Bobl trading down slowly. Big bids in Bobl and offers keep getting lifted but it just won't break the high of the day in Bund at 122.59 which held 6 times. Big bids in Bobl but it just keeps going down, slowly. Meanwhile Bund should have been trading much lower but doesn't. Bobl is bid 2500 contracts at 116.63 and trades 11,000 contracts at 116.64 and only 164 on 116.63. Similar thing happening in Bund: trades 6,200 contracts at 122.54 and 1,600 at 122.53, 122.53 goes offer but no one wants to sell even one contract at 122.52. Why not? It's highly likely that this is as low as the market is going to go based on how many contracts traded and the huge bid in Bobl. So no one wants to be the one who sells the low of that move in either Bund or Bobl. So everything is telling you to buy. So you go long 122.54 or even 122.53 if you were lucky to get filled. Then Bobl is offered 116.64 for some, still no one wants to sell 116.63. Then you see 116.64 offering 1500 contracts to bully long traders into panicing and taking out that huge bid of 2500 on 116.63. It works: some one sells 50 contracts into 116.63 and its bid only 1000. But remember there is one guy who just bought 11,000 contracts in Bobl and probably a few thousand also in Bund and he was bidding 2500 below that. So the big guy cancelled 1500 contracts because some one sold only 50 contracts? No, because half a second after he cancelled his 1500 contracts he just lifts the entire offer at 116.64. Get it? He didn't really want to get filled on 116.63. He just posted this bid to keep the price up. And when he got challenged by the big offer, he quickly made sure that no one who was long had to worry about his position thereby avoiding traders puking into his bid and making him lose. Sure enough, everyone who was short and saw that knows their fucked and start puking. Market goes higher. This is the momentum the market needed to break the high of the day that I was waiting for. I know that after having traded so many contracts and having seen what I have seen that the market should move about 10 ticks. I don't remember the price in Bobl, but I do see a huge offer in Bobl a few ticks away and at the same price level in Bund (122.65) also. And sure enough it trades 5000 contracts at 122.64 and a few on 122.65 making it the high of the day for the next 15 minutes trading in a narrow range (where the long big guy probably dumbed his position). See, I risked 1 tick to make 10. Talk about risk/reward ratio. And I was sure it was going up. It did trade even higher (trading 166.77 now) but I don't care, I reached my daily target. This is what you have to look for. This is what goes on in my head. See why it's so hard to describe using words?
It's all psychology. Who has the most money? When are traders going to puke? If they do, how far will that move the market?

[joshdance]

AgeKay, do you trade ES? Given that the volume there is typically 5x or so higher than the Bund and 10x more than the Bobl, isn't it a bit more challenge to identify the players when the market trades so much more volume?

I think the deal with charts is that for me, they give a frame of reference. Too many people trade blindly on the chart alone; I simply am not trained enough yet to make much sense of the orders on the book; however, no one can hide their traded volume, and this is what I use through look at time and sales and a simple volume histogram (both per bar/time and at price).

[AgeKay]

Originally Posted by joshdance »

AgeKay, do you trade ES? Given that the volume there is typically 5x or so higher than the Bund and 10x more than the Bobl, isn't it a bit more challenge to identify the players when the market trades so much more volume?

No, I don't trade ES. It's not the volume that is the problem, but the "noise". It's correlated with so many markets, it's much harder to see what is directional trading or just spreading or hedging. I think bond markets just move a lot cleaner than stock markets, but it's certainly possible to trade them using only the order book.

[pawancarrot]

i agree with u. really nice post.

[madmedmat]

thanks for this thread. liked the first couple of posts very much.