[tape reading] See Behind the Flow ( Order Flow)

[ferasjaara 10]

I'm starting this thread for one primary objective. to learn to see behind the flow like pro's.

 

I ask everyone to post their trades live

I'm targeting mainly statistics and volume traders. which includes vsa, mp , md, orderflow

the idea is to try and gauge markets using a statistical edge, that had been used by few pro traders, like JP, Darreeb, PlantP.

 

start posting :

Rules

No religeon

no politics

be respectful to others.

 

we are looking for what really works, in the markets.

I have a good trading experience. and will be posting my trades as well

 

Some creteria needed:

Weekly and Daily analysis made simple (Trend Direction)

Inttaday Direction and analysis,

Pricelevels to excute the trades at

ENTRY AND EXITS based on smaller timeframe ( tick , 1min, or 3min)

trade Management........

 

Enjoy

lets begin.

[johnw 10]

I'm starting this thread for one primary objective. to learn to see behind the flow like pro's.

 

I ask everyone to post their trades live

I'm targeting mainly statistics and volume traders. which includes vsa, mp , md, orderflow

the idea is to try and gauge markets using a statistical edge, that had been used by few pro traders, like JP, Darreeb, PlantP.

 

start posting :

Rules

No religeon

no politics

be respectful to others.

 

we are looking for what really works, in the markets.

I have a good trading experience. and will be posting my trades as well

 

Some creteria needed:

Weekly and Daily analysis made simple (Trend Direction)

Inttaday Direction and analysis,

Pricelevels to excute the trades at

ENTRY AND EXITS based on smaller timeframe ( tick , 1min, or 3min)

trade Management........

 

Enjoy

lets begin.

 

Excellent idea for a thread.

 

Since you are the OP why don't you get the thread up and rolling with your thoughts and maybe a sprinkling of charts.

[steve46 12]

Sir or Madam

 

Whats "behind" order flow is a decision made by an institutional participants to buy or sell a tradable issue (equity, debt, commodity or future). Based on that decision, they either call down to a broker near the pit or authorize the trade to a soft money agent or to their own employee for electronic execution. For some participants the alternative route is automated execution. For the NYSE, more than 66% of volume is executed this way. This is the "broad strokes" picture of what is "behind" order flow on a daily basis.

 

Intraday, and on the institutional side, the motivation (the reason behind order flow) is that we want to make bonuses for performance at the end of the year...For that reason, as we near the end of specific time frames....yearly, quarterly, monthly and weekly, we will step in front of the market as it tests the open of each time period..moving it up (defending it)...the closer you get to the end of a time period, the stronger the motivation to defend or move markets as they challenge the open of each time period..On the institutional side we call these "time based pivots".

 

Here is a chart example from my thread titled "An Institutional Look at the S&P Futures"

http://www.traderslaboratory.com/forums/32/institutional-look-s-p-futures-8859-6.html

scroll down the page to the post that begins "just for grins".....then refer to the chart.

 

 

 

I hope this helps

Steve

Edited May 18, 2011 by steve46

[Moyyim 10]

Sir or Madam

 

Whats "behind" order flow is a decision made by an institutional participants to buy or sell a tradable issue (equity, debt, commodity or future). Based on that decision, they either call down to a broker near the pit or authorize the trade to a soft money agent or to their own employee for electronic execution. For some participants the alternative route is automated execution. For the NYSE, more than 66% of volume is executed this way. This is the "broad strokes" picture of what is "behind" order flow on a daily basis.

 

Intraday, and on the institutional side, the motivation (the reason behind order flow) is that we want to make bonuses for performance at the end of the year...For that reason, as we near the end of specific time frames....yearly, quarterly, monthly and weekly, we will step in front of the market as it tests the open of each time period..moving it up (defending it)...the closer you get to the end of a time period, the stronger the motivation to defend or move markets as they challenge the open of each time period..On the institutional side we call these "time based pivots".

 

Here is a chart example from my thread titled "An Institutional Look at the S&P Futures"

http://www.traderslaboratory.com/forums/32/institutional-look-s-p-futures-8859-6.html

scroll down the page to the post that begins "just for grins".....then refer to the chart.

 

 

 

I hope this helps

Steve

 

If only your "bonus" was based on the number of times you use the word "Institutional" in every one of your posts... I presume to give some sort of credence that you are the "voice" worth listening to or "sigh".

 

Looking at your "An Institutional (grrrr)look.." thread you state you have "limited experience" with Institutions and they just want your analysis...so you're not a trader right ? .

 

Cheers

[steve46 12]

If only your "bonus" was based on the number of times you use the word "Institutional" in every one of your posts... I presume to give some sort of credence that you are the "voice" worth listening to or "sigh".

 

Looking at your "An Institutional (grrrr)look.." thread you state you have "limited experience" with Institutions and they just want your analysis...so you're not a trader right ? .

 

Cheers

 

What an interesting way to respond

 

Well first of all, what you choose to believe is of little interest to me...My income is none of your business although like many professionals it is based in part on how much profit I generate for my employer..

 

and finally (because the original poster has requsted that we be "respectful").....may I "respectfully" suggest that you ignore me....I will do the same for you from now on.......

 

There you go...problem solved!

 

"Cheers"

Edited May 19, 2011 by steve46

[Moyyim 10]

Post deleted to respect OP

Edited May 19, 2011 by Moyyim
Respect

[BlowFish 10]

If only your "bonus" was based on the number of times you use the word "Institutional" in every one of your posts... I presume to give some sort of credence that you are the "voice" worth listening to or "sigh".

s

 

That is how it appears which is a shame, as on the whole it is actually a "voice worth listening to". Seems that often traders have their little foibles. .

 

"Institutional" is too broad a term to usefully identify a specific type of participant, it is also too vague a term to define a category of participants. There is pretty much always a better word to use.

 

Heck I would bet that most people would not even have the same definition of what the term means. For me I tend to think of 'institutional' as the funds (banks, pension, insurance, unions etc.) I also tend to think buy side. I personally would rule out the more 'boutiquey' operations and most of the 'hedge' funds (another nebulous term) as their mandates are usually much broader. Neither would I include what the COT would call 'commercials' even if there operations are actually conducted by 'jobbing' traders that work for the same organisations, there remit is clearly completely different. Nor would I include market making.

[steve46 12]

That is how it appears which is a shame, as on the whole it is actually a "voice worth listening to". Seems that often traders have their little foibles. .

 

"Institutional" is too broad a term to usefully identify a specific type of participant, it is also too vague a term to define a category of participants. There is pretty much always a better word to use.

 

Heck I would bet that most people would not even have the same definition of what the term means. For me I tend to think of 'institutional' as the funds (banks, pension, insurance, unions etc.) I also tend to think buy side. I personally would rule out the more 'boutiquey' operations and most of the 'hedge' funds (another nebulous term) as their mandates are usually much broader. Neither would I include what the COT would call 'commercials' even if there operations are actually conducted by 'jobbing' traders that work for the same organisations, there remit is clearly completely different. Nor would I include market making.

 

I like to make it simple. Most of the top tier institutions maintaining a presence in today's market are banks (what we think of as banks)....Since the changes brought about by the mortgage problem some of these "institutions" have put themselves at a distance from their trading groups, but that is just legal issue. The bottom line is that institutional activity is primarily "banks"

 

In contrast, "funds" and what we think of as "hedge funds" are intrinscally different in how they pursue their goals..specifically they are actively looking for more and different risk exposure.

 

This is less about the type or classification of operation and more about what they are and are not will to risk in order to obtain profit..

 

I hope this helps

Steve

[ferasjaara 10]

My take, in simple terms.

if institutional investor move almost always together in trending markets. that can tell me one thing. ALGO, I think and evidently and Algo based on intent and objectives is somewhere along the lines of what I'm thinking.

I keep questioning and wondering how can the market move on its own or can supply and demand really move the market? fine. lets say it does. what happens to long term objectives.

CAN"T BE POSSIBLE ... I think the market is preplanned or at least part is and the other part is random or small houses control it. but the bottom line the market moves in order and I certainly think it's ALGO .

This is just my opinion. without delving into the small details.

I've seen traders nailing top and bottom with high degree of accuracy. which also tells me that the impossible ( predicting or forecasting) in reality is possible.

 

I hope to hear from some ALGO traders... Please come out and help.

Thank You

[BlowFish 10]

I like to make it simple. Most of the top tier institutions maintaining a presence in today's market are banks (what we think of as banks)....Since the changes brought about by the mortgage problem some of these "institutions" have put themselves at a distance from their trading groups, but that is just legal issue. The bottom line is that institutional activity is primarily "banks"

 

In contrast, "funds" and what we think of as "hedge funds" are intrinscally different in how they pursue their goals..specifically they are actively looking for more and different risk exposure.

 

This is less about the type or classification of operation and more about what they are and are not will to risk in order to obtain profit..

 

I hope this helps

Steve

 

It does, we are probably on the same page (my hunch was we where not, just goes to show hunches are wrong sometime ) More to add about participants but pushed for time.

[BlowFish 10]

Got a few more minutes.

 

What do you mean by ALGO? It's another wishy wash term, lots of people use 'algorithms' nowadays. Really you need to know a bit about market microstructure it's kinda hard to discuss this sort of stuff without. Market microstructure deals with the different types of participant why they trade and how they go about about achieving there goals. Computers (and 'algorithms') are used pretty much at every stage of the game nowadays the motivations of the players remain the same however.

 

You might be surprised that some of the very largest participants are not profit motivated. Well not through speculating in the market they are trading in. This is why markets move these guys must trade there is real underlying demand/supply. A lot of 'algo' use is about modelling risk, portfolio optimisation, simulation etc. I guess you are talking more about 'algos' that trade? Again there is a lot of mis information about things like HFT (which is actually largely used for market making) algos also allow arbitragers to work much more effectively. As one of the greatest risks to arbitrageurs is execution risk algos allow even smaller inconsistencies to arbed away. Arguably these things actually dampen long term price movement (though can cause 'ripples' shorter term).

 

Anyway I have rambled a bit, I guess that's what happens when you ask questions whose answers would fill multiple textbooks