[johnjohn1hew]

Originally Posted by JBWTrader »

My belief is this....the market is controlled by a couple of big players...they know exactly where price is going and are very precise on where they want to take it...to the tick...
they have various options to change direction in order to change the order of pattern completion....but ultimately they will use volume to get them where they need to go....99.999% of the rest of the players are trying to figure out our odds of success relative to these 1 or more big players...

Best
John

I don't know. Based on the volume of the e-mini contracts traded daily a large trader that could gain a following would have to be absorbing a hell of a lot of activity in-order to manipulate price and gain a following. I know there are large traders present in the market, but if you look at the tape, exactly when are they buying or selling? I never see any huge orders going through that would need to in-order to cause any significant movement. I think thinking about who is trading is irrelevant and that either way price (+volume) will show strength or weakness on its own, no matter who is or isn't driving it. All we need to do is measure the movements and act on our judgements.

[JBWTrader]

Hi Johnjohn1hew

Some good comments you made.
Lets just say there are large players and very large players and many . many small to medium players...
I agree also we dont need to know Who they are but rather what they seem to respond to ...

the price movement/structure I am trying to describe is anything from 1-4 ticks to 200 ticks....not neccessary the big moves only..

I have personally been watching tape for nearly 5 years now and these days its much more difficult to spot the reasons for subtle changes in price...too many games and too many ways to conceal...rather I find it easier to look at the structure of price ie anything from 60 ticks (and you can go smaller of course) to 60,000 ticks +

As for your comment "price (+volume) will show strength or weakness on its own, no matter who is or isn't driving it. [/B]All we need to do is measure the movements and act on our judgements" I also agree with this...this is always the outcome of the decisions made by those that can easily influence buying and selling pressure....for us retailers we hope to get in on the action once these collective patterns become more obvious to us and hopefully not too late...

What I have learned is that the market is very precise on where it wants to go and is using predetermined price goals/positions (for want of a better term) and it uses volume to get there with price being the final outcome...the volume I am referring to here does not have to be large volume...just enough pressure to move price anything from 1-100 ticks say...

we all struggle with determining the price(t) goals....so the rest of us look to volume and price (not always both ) for our belief system / trading system confirmations and act accordingly and hopefully get a stastistical advantage over the market in that way(s)..

Best
John


All the Best
John

Originally Posted by johnjohn1hew »

I don't know. Based on the volume of the e-mini contracts traded daily a large trader that could gain a following would have to be absorbing a hell of a lot of activity in-order to manipulate price and gain a following. I know there are large traders present in the market, but if you look at the tape, exactly when are they buying or selling? I never see any huge orders going through that would need to in-order to cause any significant movement. I think thinking about who is trading is irrelevant and that either way price (+volume) will show strength or weakness on its own, no matter who is or isn't driving it. All we need to do is measure the movements and act on our judgements.

[zdo]

januson

I can already venture how these comments will be dismissed as unnecessary to application – but they do have some bearing on the original question so… here goes.

Price moves to stay as closely aligned to the underlying valuation of an instrument as is possible. The underlying valuation ‘moves’ much more than price. This valuation is the collective’s valuation and can only be guessed at by individuals. This underlying / accompanying is the ‘general projective’ of valuation. Price is ‘objective particular’ of valuation. It attempts to stay not too far behind the underlying valuation – and the attempts sometimes overshoot… This underlying / accompanying ‘general projective’ of valuation is ignored or neglected by most, attacked by a few, sidestepped by some as being only ‘demand’, etc, etc. The ‘general projective’ is one of the unspeakable, irrational numbers in markets… but

If that accompanying valuation didn’t exist then MP’s would have no reason to approximate value areas, etc.. Wave traders would have no underlying basis from which to build counts, etc. SR ‘participants’ (a la Wycoff and progeny,etc.) would have not the slightest motivation to attempt to step in and participate in or ‘protect’ support (or resistance). More manipulative SR participants would have no motivation to look for the heavier participants’ attempts at exploitation via pricing campaigns. People would never bother writing trading books, etc. Soros, Buffet, etc would have washed up... Without the underlying, valuation, 3+ sigma events would be ignored by all… Black swans would all stay beyond the horizon… The conscious or unconscious assumptions about this underlying collective valuation of traded instruments can be explored and partially uncovered about every single method of trading (including random entry)

Generally speaking, the ‘heavier’ in size a trader gets, the more conscious s/he becomes of his own valuation projections. (and not necessarily via fundamentals btw). Small, ‘technical’ trading is in some ways an easy luxury…and how

[johnjohn1hew]

I think value is just a natural occurring phenomena inherent in all markets. It's not a method; it's not a setup. It's just a result of what is. It is extremely hard for me to put it into words. I don't think about value as being a mechanical 70% area - that is just too fixed and inflexible for me. Prices at which volume is most abundant are levels at which traders want to trade. This is where i would classify value taking place. I wouldn't say that traders seek value; it is something that they just run into. Something that is forever changing with the swings of their fear, greed, and need.

[Kiwi]

Originally Posted by zdo »

januson

I can already venture how these comments will be dismissed as unnecessary to application – but they do have some bearing on the original question so… here goes.

Price moves to stay as closely aligned to the underlying valuation of an instrument as is possible. The underlying valuation ‘moves’ much more than price. This valuation is the collective’s valuation and can only be guessed at by individuals. This underlying / accompanying is the ‘general projective’ of valuation. Price is ‘objective particular’ of valuation. It attempts to stay not too far behind the underlying valuation – and the attempts sometimes overshoot… This underlying / accompanying ‘general projective’ of valuation is ignored or neglected by most, attacked by a few, sidestepped by some as being only ‘demand’, etc, etc. The ‘general projective’ is one of the unspeakable, irrational numbers in markets… but

If that accompanying valuation didn’t exist then MP’s would have no reason to approximate value areas, etc.. Wave traders would have no underlying basis from which to build counts, etc. SR ‘participants’ (a la Wycoff and progeny,etc.) would have not the slightest motivation to attempt to step in and participate in or ‘protect’ support (or resistance). More manipulative SR participants would have no motivation to look for the heavier participants’ attempts at exploitation via pricing campaigns. People would never bother writing trading books, etc. Soros, Buffet, etc would have washed up... Without the underlying, valuation, 3+ sigma events would be ignored by all… Black swans would all stay beyond the horizon… The conscious or unconscious assumptions about this underlying collective valuation of traded instruments can be explored and partially uncovered about every single method of trading (including random entry)

Generally speaking, the ‘heavier’ in size a trader gets, the more conscious s/he becomes of his own valuation projections. (and not necessarily via fundamentals btw). Small, ‘technical’ trading is in some ways an easy luxury…and how

Very nice model (because all these discussions create mental models of the market that are true or untrue and useful or useless to varying degrees).

I particularly like the resulting ideas that
- what you need to imagine is where projected value will be, is going, might hold
- that being small you don't have to go early because if you wait for the projection to give itself away in the move after accumulation the slippage won't kill you so you get a reduction in risk vs the participants who have to scale into possible reversals

and one of my own
- that signs of the movement of projection can result in an immediate move but may not, allowing larger participants (and you) time to accumulate a position with price improvement after the signs of movement.

[zdo]

Kiwi, Will give some thought to your “resulting ideas”. Thanks.

re:

Originally Posted by Kiwi »

...mental models of the market that are true or untrue and useful or useless to varying degrees...

Thanks again. Prompts me to add the following:

My answer to the question was an answer – not the answer.

Our ‘ways of peeking in’
1 the general projective
2 the particular projective
3 the general objective
4 the particular objective
are all valid. Most of us are blind to (even defended against) 1, 2, or 3 of them.
Also, as one’s awareness of them increases, the test about which ones take precedence often leads us to some downright goofy conclusions re cause and effect, etc

[beyondMP]

The question by the OP, is actually the question every trader must answer. The answer is also different for equities or derivatives.
The reason price moves is because of a difference between buying and selling in the micro and overall sentiment in the macro. In order to make sense out of price movement, in the eminis (derivatives), you need to know:
1. the difference of buying volume to selling volume-micro
2. the correlation of that difference to overall volume-micro
3. the overall position and movement of the market in general and its relationship
to the instrument traded-macro
(all of these are measurable, verifiable and repeatable)

For individual stocks, in addition to above, you have to have a method of measuring and verifying the overall sentiment and opinion of the issue's future fundamentals and news info. Since, the volume of buying and selling in stocks is confused and obfuscated by the specialists and market makers and measuring sentiment and opinion is almost impossible; and, as the eminis trade in an enviroment that more closely resembles a "free market" you can deduce that they are actually easier to trade

Value is a perception, everyone has their own idea of what something is worth, thus, it is of little use, if any. In terms of MP, it is only the statistical representation of where price has been. Sometimes it works and other times it doesn't. But, the above definition always works.

[DugDug]

just to add a few points to think about in a slightly different slant.
The idea of value is interesting - think about it in terms of option markets.

Most market makers have their calculations of fair value. this is generally a price based around what the other players in the market were demanding or supplying. It is not necessarily based upon what value they think the fair value might be. They can skew their books in the manner in which they like based on views of volatility, but unless their pockets are very deep taking on the market regardless usually leads to problems.
Now what happens when clients of the market makers start talking about fair value. It becomes interesting as fair value to a MM is about the fair value compared to other options they can spread off to taking a small clip - a vary different measure. Many clients want to trade at fair value - but what does that mean to them?
example; fair value to a market maker is 25 - they make a market bid 24-offer 26. How many clients wish to trade at 25 their idea of fair value. No if the market maker moves the prices to 30-32, those same clients still wish to trade at 31.
It just an interesting take on what people think is fair value.

also - not to cause an argument - but do people really believe that the market is controlled by a few big players - if so they must be fabulously wealthy. I take the belief that the market is bigger than anyone player and there are plenty of times that it proves it to those who think they can tame the markets.