[Soultrader]

neustaju,

Check this thread I just made: http://www.traderslaboratory.com/for...tive-1329.html

[Reaver]

Excellent video. The videos are helping me out big time with my new studies in AMT.

[drlicks]

hey Soul,

great video-- i have been using this supply demand idea a lot recently. one question, how do you differentiate short covering from new buyers? are there certain price targets or levels that short sellers would look for? thanks!

[Soultrader]

Originally Posted by drlicks »

hey Soul,

great video-- i have been using this supply demand idea a lot recently. one question, how do you differentiate short covering from new buyers? are there certain price targets or levels that short sellers would look for? thanks!

Its not exact science but I tend to memorize the lot sizes and the approx big lot traders that came across the tape on the decline. I am also looking to see orders getting hit at the ask towards the end of an decline or around a key support level. This will be the first sign of short covering. You will then see people scattering to cover as the tape which as all getting hit at the bid now is getting hit at the ask.

This takes time and experience to feel the tape and to recognize such behavior. Also ask yourself, if you were short from above where would you most likely cover?

[Reaver]

I imagine this technique would be best suited to one who was focusing on a specific market, as appropriate lot sizes for each category would vary significantly with each market...ie a large lot size in the S&P 500 has a very different definition than in, say Corn.
Good info James.