DOM games

[brownsfan019]

One attraction to the DOM's with futures trading is trying to 'see' where the market might go based on the volumes shown on the dom. I've read posts where newbies fall into this trap.

I wanted to provide an example I saw today and over time we'll see if myself or others can provide some snapshots for review.

The point is simple - to show that there are plenty of games that go on with the DOM and in my opinion, placing too much (or any) weight in them can be a slippery slope.

[Reaver]

Thanks for the info man, nice to know.

[hanz]

yup

saw that many times too

guess u just cant trust the DOM

also OEC trader has iceberg feature

hope they will add T&S on the next upgrade

[brownsfan019]

And some more today...

[brownsfan019]

What I've noticed here is that when you see heavy buyers or sellers sitting, they can act like a magnet. Price seems to gravitate towards them.

Now the question is why... why does price want to gravitate there (if it in fact does on a regular basis)? Are trades being filled there or do 'they' know that 'they' can create artificial pressure?

The above post I put was a great example. There appeared to be heavy sellers a few times and price has continued to rise. At first glance, it would seem that there was some possible resistance there; however, that was not the case at all...

It would be interesting to see some documented research on this topic. Is there really something there to use? If so, could it be used in a discretionary approach or would this require ultra-fast timing by computers...

Just some ideas, a little talking out loud here.

[Minetoo]

There was some discussion a few years back about implementing a punitive fee for lifting the bid or offer, so traders could get a truer picture of market demand. It died a quiet death.

[brownsfan019]

	Quote:	Minetoo
	There was some discussion a few years back about implementing a punitive fee for lifting the bid or offer, so traders could get a truer picture of market demand. It died a quiet death.

Wonder why.

[brownsfan019]

[TinGull]

This happened sooooo much today in the ES. I'd never seen the games played like that before...granted I haven't been doing this very long...almost a year...but still, that was weird seeing huge lots being offered and then taken away.

[Soultrader]

Very interesting topic here. In Japan, these withdrawing bid/ask in tremendous size is illegal. Which is why the Dom information is more clear.

Many scalper trade just off the dom making the bid/ask spread. This works well in the Nikkei where the tick size is approx $90 per contract a tick. I can not do this successfully.

We also have off exchange transaction system in which block orders can be negotiated between a buyer and seller directly. These block orders do not show up on the Dom but will send a print at the open and EOD. Hence this block size is incorporated into volume at the EOD only. (pretty annoying in my opinion) They do this in order to prevent artificial price movement.

Brownsfan mentioned how price gravitates towards the heavy bid/ask levels. I find this interesting as it is the exact opposite with the Level 2 screens in Japan both for futures and equities. Im assuming it is due to bid/ask games constantly being played in the US or just traders being very indecisive and emotional. When I traded the YM, I never really paid attention to the dom (only tape) so can not comment on this behavior for US futures.