[BlowFish]

Certainly will check out the book. Very little stuff written about the order book or even modern tape reading. There are a few old ones particularly aimed at NASDAQ but I seem to remember them being universally poor.

Certainly agree with your point about removing everything that is superfluous..there is a famous quote that escapes my mind at the moment.....maybe by Einstein, pretty much as you said it. Also I know what you mean by old posts!

[subterfuge]

I have the book you mention, Agekay.
I will look into trading the DOM again at some point.
The concept is very logial, which I like, but as I said, in my experience, I just didn't get anything out of it

[DugDug]

Personally I dont use the DOM very much - but also feel like its good to have there for entering orders.
But when it comes to reading/listening to it, the analogy of a trading floor comes to mind when watching it....you get the feel for the noise, the excitement, the panic, the quite times that you just do not get unless you are watching a tick chart.
A 5min, 60min etc; chart will not tell you about the vibe of the move.
It all takes practice.

I used to be a floor trader and on a busy day you might do 200 individual trades or different quantities, and on other days you might do three trades. A chart would never tell you which was which.
Of course all this depends on strategy and personality.
I dont really have the desire to watch and trade as a scalper, or to do more than 10 trades a day any more, so watching the DOM does not make sense.... as BF said it can be mesmerizing.....a secret hypnotic subliminal tool be the brokers whispering .... "trade, just buy or sell, or do both many times ---- we dont care so long as you give us the brokerage."

that quote " It's not just about how much you make. It's about how much you keep." reminded me of the similar one we had which was "its easy making money - the hard part is hanging on to it"

[AgeKay]

Originally Posted by subterfuge »

I have the book you mention, Agekay.
I will look into trading the DOM again at some point.
The concept is very logial, which I like, but as I said, in my experience, I just didn't get anything out of it

How long did look at the DOM? What market? Did you look to see which market influences the market you wanted to trade?

Did you really read the book? Did you read what it says in "Chapter 12: Final Word"?:

Turn on your X Trader and turn off your charts and watch that screen every Monday through Friday from 8:30a.m. till 10:30a.m. You're going to start seeing it. It's like any other job. You have to pick it up. However, let me just say that's it's not going to happen in a week. I've had guys write me after one week and tell me, “I've been watching the market for a week and I don't see your setups. It's not working for me. I'd like a refund.” Literally, they wrote me after one week. If this is you, let me just tell you right now that you are never going to make any money doing anything other than working from 9 to 5. You don't learn anything in a week. I sat there for seven MONTHS before I got it.

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?

[subterfuge]

Thanks for the example.

I'll be honest, maybe I didn't give it long enough, although I never asked for a refund like some!

I gave it about 3 weeks of looking at it from 9am-7pm, mainly looking at the ES, and the 6B (GPBUSD) in the mornings (im in the UK)
Maybe I threw the towel in too quickly, but I honestly felt as though i was getting nowhere.

I think the concept is probably very hard to put into words with a few snapshots as is demonstrated in teh book. I think your chances of understanding would increase ten-fold if you could sit next to someone for a few weeks who could explain things as they happen.

I actually read part of the book again today, on teh back of this thread.
Ill give it another shot at some point.

[SunTrader]

I don't care who the trader or book author is - without sitting down with someone else side-by-side watching the market together they can't give an opinion on the chance of some else's success or failure.

As someone else said previously there are so many ways to win or lose in the markets. Pick one that suits you and go with it.

[Nemesis]

Originally Posted by subterfuge »

X2.

I read a thread similar to this a long long time ago, advising me to turn everything off and 'stare at the DOM' etc.

Well....nothing happened. Just chaotic randomness! Sometimes there was huge size in the bid and the market crashed. Sometimes there was again huge size on the bid and the market instead rallied. Lots of trades going off on the buy side and it carried on going up. Lots of trades going thtough on the buy side and the market dropped off! Sad to say that i I didn't gain anything from it.

like the poster above said, it just made me more confused!

Maybe we need to know exactly what we are supposed to be looking for before it can aid in our trading decisions.

Unfortunately, most traders don't come ego free, whether they are good or bad. When you see claims like this unless they are substantially backed with screenshots and explanations, just ignore them. You know how many posts of that kind you will come across ? Implement this rule, unless you can backtest the so called hints yourself, don't play scientist looking for answers. You could had been on the right track and random stuff like that derails you. There is nothing on the DOM but small little numbers cruising by.

If someone is going to offer help, unless the person is acting like an open book, just cruise by, you are better off on your own.

[macdfx]

Isn't the DOM nothing more than Liar's Poker?