Why Futures Are Better

[MadMarketScientist 11]

Because "All I want here is for these attacks to cease and just let my post contributions stand on their own merit". Change TL user and stop promoting and the attacks stop and his post stand on their own merit - simple right.

 

TL owners are weak in this regard and have in the past tended to sided with the vendors.

 

Ok ceasefire please. Thread has been cleaned and the initial promotion has been removed.

 

Let's keep the discussion to the thread topic.

 

Roger\Predictor - please don't promote your products in the discussions. If you want to, we can setup an arrangement in the Commercial section.

 

MightyMouse - thanks for highlighting this issue.

 

Everyone else - please use the 'complaint' button next time instead of endlessly attacking each other in the thread ... as you see, other members are also tired of the bickering.

 

Thanks everyone for cooperating

MMS

[Roger Felton 10]

Hi Roger, Cheers for the post . Wondering if you can elaborate a wee bit on your preferred futures markets . I started with Emini S&P then moved on to 6A / 6E etc currency futures. Not enough funds or experience to tackle Oil /Gold . Have lately been " following " FX pairs but not yet gone live. Any suggestions or comments you have will be much appreciated. Thanks;)

 

Hello binnie...so sorry for the slow response. Musta gotten sidetracked...lol

 

Each day, I look at a number of futures markets including commodities like corn (ZC) and soybeans (ZS). Those aren't my primary markets but they can spring some great signals with fairly smooth follow thru. Good for 3 or 4 each on a given day.

 

But the main ones I look at are 6J (Yen), FGBL (Euro Bund), Russell (TF) and my personal favorites Gold (GC) and Crude Oil (CL). Now that's a lot for many traders to keep up with especially when each is popping a signal every 5 to 15 minutes or so. So, take the best of the best. So what does that mean? Allow me to deviate from the initial question because this is important....

 

How you look at the markets is a big part of your trading success. Most traders use time-based charts such as a 1, 3, 5, 15 minute or more. These are very confusing bars as you usually can't get more than 2 to 4 bars of one color before an opposing appears. They zig and zag all over the place all day long. Tick charts are not much better. Range charts are an improvement but still pick up a lot of noise. Then you get the Heiken Ashi but they lie to you if you want the true OHLC.

 

So what do I use? It's a derivative of a Renko bar. The one I use allows me to create any Renko type bar I want in seconds just by changing a few inputs. The best settings are an 8 or 10 Renko with a 1 tick step for quick 10 to 20 tick scalps. Or try a 16 to 22 Renko with a 1 step for bigger hauls. To identify those big massive runs, build a 30 Renko with a 15 tick step and a 50 Renko with a 25 step. You're also going to need to build skeleton bars that tell you exactly what the market did inside each bar (for as far back as you have data if you are going to backtest signals).

 

So why these? Imagine how much easier trading would be if, when the market reversed direction, the bars never changed color until the market was ready to reverse again. This means you would get market runners that go for 30, 50 and 100 or more bars and all would be the same color! You could know where the market direction was really headed from 50 feet away before you ever applied your first indicator. Find the ones that have the movement and calmness that suits your style of trading.

 

Another reason is how amazingly smoother your indicators behave. Some you might not recognize at first. It's like steering a boat on a calm lake versus an ocean storm.

 

A good programmer can build these with the skeleton bars in a few weeks. I can provide some advice and guidance although I'm not a coder. I knew what I wanted and paid someone to build it. They aren't too difficult depending on how sophisticated you want them to be. Some platforms such as TradeStation aren't conducive to building new bar types as far as I know. So you'll need to find a charting platform that has some latitude. I use NinjaTrader and am very pleased with what it let's me do.

 

To demonstrate how these bars perform and what they enable you to do can't effectively be described in text. I've included a screen shot that will help visualize and perhaps reproduce. The beauty is in watching these charts move and fire signals. You will discover many you could never see on any other chart. One of my favorites is the TrendLine BreakOut. Simple and old school but you should see how amazingly well they work...like no other chart type I know of.

 

Now that you get an idea of what the charts look like, you just look for the timeframe that offers the most bars with the fewest "turns". Take the best two and go have fun!

 

If you are interested, I can explain the big advantages of including the LineBreak bars in your trading arsenal, too.

Edited March 1, 2013 by Roger Felton

[Roger Felton 10]

You might be interested in this:

 

Options Trading With The Iron Condor

 

In the context of trading Futures, which is my area of expertise, if GC, for example, sat at 1580.00 and didn't budge one tick, how could anyone make a profit? That's all I was saying so you and I will just have to differ in our understanding of how futures trading works.

 

I would personally, for a number of reasons, never trade options...especially Iron Condors where the potential for loss is much greater than the potential for profit. That's not a formula most traders would get excited about but I appreciate the interesting link.

[Gekko78 10]

Wow I was away from this thread for like 2 days and the Wars started....yikes!

 

Anyway in keeping up withe original concept of the thread I still think futures are superior.

 

I do not see how one can trade successfully , for any extended period of time, without using order flow , DOM and T&S. Charts alone cannot tell the whole story.

 

In FX you cannot see any of this......all you have is time? time is irrelevant , from charts, 1 min , 5 min or 1 hr does not matter.

 

What can a candle tell you about what REALLY happened? all it can tell you is that in x amount of time , price either went up , down , or sideways but it cannot tell you what actually happened DURING the time........ if price closes up for instance , how many trades did it take for that to happen? How many lots were trades? Was it just a few lots that allowed price to move up or was it a few hundred? Were the big boys playing there or was it just retail guys like us?? Were there spoofs there? Are the big boys waiting for you somewhere on price? Why was x level support/resistance? What actually happened at that level for price to fail/breakthrough that level??

Am I saying it is impossible to make money from anything else? NO of course not but when you have a tool that can make things much easier why would you not use it?

 

Can you drive a nail into the wall with your hand? Sure but it will take much longer , and more pain , to get it in. Why would you not just use a hammer? You can do it either way but, the right tools will give you a better chance of success.

 

 

 

Please tell me how you can get the same information from this picture on a chart. If you can provide me all that then please feel free to do so. I eagerly await responses.

[SIUYA 11]

Gekko, you are correct that you can get more information looking at volume, however personally I have never looked at volume and find volume to add no value - so the information is useless to me.....never, ever apart from that one time at band camp.

 

So using volume for me is in your analogy- like having a hammer with an added mutli grip plier tool attached when all i need is hammer.

 

Basically my opinion is that it clouds the issue and that for me the issue is one of where is price going, likely to go and or where is a good level to get in and out.

Of course if it adds value for you then use it, but I find its not necessary.

 

In order to see what happened a tick chart is enough, you can tell its speed, levels of rejection, see small waves occuring etc....but i still trade off the higher level context because that is where my view/setup etc is formed.

 

If i am watching intently (which i assume is what is needed to be watching a DOM) then I just need to watch a tick chart for much the same information......afterwards the rest become history.

As you say each to their own.

[Gekko78 10]

Gekko, you are correct that you can get more information looking at volume, however personally I have never looked at volume and find volume to add no value - so the information is useless to me.....never, ever apart from that one time at band camp.

 

So using volume for me is in your analogy- like having a hammer with an added mutli grip plier tool attached when all i need is hammer.

 

Basically my opinion is that it clouds the issue and that for me the issue is one of where is price going, likely to go and or where is a good level to get in and out.

Of course if it adds value for you then use it, but I find its not necessary.

 

In order to see what happened a tick chart is enough, you can tell its speed, levels of rejection, see small waves occuring etc....but i still trade off the higher level context because that is where my view/setup etc is formed.

 

If i am watching intently (which i assume is what is needed to be watching a DOM) then I just need to watch a tick chart for much the same information......afterwards the rest become history.

As you say each to their own.

I disagree with your statement here but thats ok. You do what you do and I will do what I do.

 

Like I said before . Professional traders do not trade off charts . They use the above. Also most pro traders are scalpers ....they are in and out ....the do not hold for long periods.

 

Most trading firms will not even let their traders look at a chart until after they can successfully trade of a DOM. So my question would be then why would you not want to do the same thing??

 

Again if you just trade off charts and it works for you then sweet! But , when the pros do one thing ( and they win) and the retail guys do another ( and most lose) you do not need to be the head cashier of Wal Mart to figure out the math here.

[DbPhoenix 42]

Most trading firms will not even let their traders look at a chart until after they can successfully trade of a DOM. So my question would be then why would you not want to do the same thing??

 

Perhaps one wants to ride the move to its natural conclusion?

 

Again if you just trade off charts and it works for you then sweet! But , when the pros do one thing ( and they win) and the retail guys do another ( and most lose) you do not need to be the head cashier of Wal Mart to figure out the math here.

 

You're assuming that that's the only difference. Perhaps the average professional trader does better than the average retail investor because the professional behaves like a professional. The average retail investor does not.

[Gekko78 10]

Perhaps one wants to ride the move to its natural conclusion?

 

Yes and they do this as well......the move could be worth 3 ticks or 30 . A DOM will tell you when to get out BEFORE a tick , candlestick , indicator or anything else will.

 

You're assuming that that's the only difference. Perhaps the average professional trader does better than the average retail investor because the professional behaves like a professional. The average retail investor does not.

 

Professionals were not born professionals ......they had to learn at some point. This is what they are taught. Many ex pro traders that have written bios or done interviews ( I am talking day traders ) say that charts are useless to trade off of. Indicators do not work , charts are good to see overall picture but NOT for buying/selling points.

 

Everyone likes indicators because they try to "quantify" things......they want an indicator to tell them when to buy or sell. An arrow, an alert a crossover etc..... you cannot quantify the market......if you could then all the algos would be exactly right 100% of the time. They only thing that matters is price , what it is doing RIGHT NOW , not 5 min from now , not 1hr from now ....RIGHT NOW this instant. Thats what matters . Thats what the big guys do.

 

You think they do not know that XXXX is a resistance point? You think they do not know about crossovers? Of course they know . They know that the retail guys are watching that ...so they are just sitting back and waiting for you.

 

Ever wonder why price fails when it goes through a so called "resistance level" on a chart?

 

The pros know where the "levels" are. For example :

 

Lets say that 10 is a level, everyone in the world knows that 10 is a resistance level. Everyone is just sitting around waiting to see if price goes through it. Price is currently @ 8/9

 

Now lets say there is a hedge fund guy who can buy/sell way more contracts than you can. He also knows that 10 is the level. He thinks a bunch of retail guys like YOU and I will buy if the market goes through 10 so what does he do ? He offers @ 11, 12 , and 13

 

Offers? Yes Offers

 

He offers a few hundred contracts @ each price .....THEN he buys everything @ 9 and everything @10. Then he bids 2000 @10. His buying and his bids act as the catalyst and the the retail people start buying the 11's 12 and so on and the people who were short @ 7 and 8 are now starting to buy as they are scared. The combination of these two things send prices higher. Hedge fund guy is now selling into your bids @ 11 , 12 and 13 ..... He was ALREADY SET UP TO COVER BEFORE HE EVER BOUGHT! he scalps out with a few ticks and a few hundred contracts price moves back down because no one is buying........and the retail guys are left holding the bag.

 

Please tell me how a tick chart would have shown you any of that scenario? IT would not.

[DbPhoenix 42]

You're assuming that professionals are supremely skilled and retail traders are supremely clueless. If you're going to compare the two fairly, you'll have to control the variables.

 

As far as indicators and tick charts, I don't recall bringing either of those up. I don't use them.

 

As for scalping, if one wants to, fine. But scalping isn't all there is. I've been trading for 15 years, and I'm not going to switch to scalping just because it's de rigeur.

 

But whether scalping or not, I agree that futures are superior to forex. But not so much that I want to argue about it. Just making a comment.

[SIUYA 11]

Gekko - you are falling into the trap many do

....that if you use a chart, you are tied to indicators.....wrong

that you know how all professional traders trade ..... wrong

that you think all professional traders trade the same way....wrong

that retail traders have not been professional traders in their careers...wrong

that all retail or all professionals are taught the same things (or vastly different things).......wrong

 

Every one can see the same info and get varying viewpoints

 

Personally I dont see many professional hedge fund guys worrying about what the retail market is doing. They are more worried about what others who are larger or similar size than them are going to do. (I think the whole distinction many people put on this is rubbish any way, and i do agree too many people are looking for clarification/quantification to do things - mind you some people make a living out of this anyway.)

 

As a retail guy, whats stopping you from emulating what the hedge fund guy is doing? Follow him if you know how they operate. How do you know which level is important to him?

 

A tick chart will show you a lot of what you are saying that in real time, usually after you have done your what if scenario, and if you dont do that then you are relying on reacting regardless of the tools.....

 

how does bid ask volume which is illusionary most of the time show you what you are suggesting? The volume has to print to be relevant, otherwise it is theoretical right?

 

I ask this as you are claiming its importance and I am saying it not necessary for some.

 

(Personally I think they are all showing the same info (DOM, chart), some people rely on volume as an extra, some of us dont - simple, its just a preference of what you want to read.)

[Gekko78 10]

Gekko - you are falling into the trap many do

....that if you use a chart, you are tied to indicators.....wrong

that you know how all professional traders trade ..... wrong

that you think all professional traders trade the same way....wrong

that retail traders have not been professional traders in their careers...wrong

that all retail or all professionals are taught the same things (or vastly different things).......wrong

 

Every one can see the same info and get varying viewpoints

 

Personally I dont see many professional hedge fund guys worrying about what the retail market is doing. They are more worried about what others who are larger or similar size than them are going to do. (I think the whole distinction many people put on this is rubbish any way, and i do agree too many people are looking for clarification/quantification to do things - mind you some people make a living out of this anyway.)

 

As a retail guy, whats stopping you from emulating what the hedge fund guy is doing? Follow him if you know how they operate. How do you know which level is important to him?

 

A tick chart will show you a lot of what you are saying that in real time, usually after you have done your what if scenario.....how does bid ask volume which is illusionary most of the time show you what you are suggesting? The volume has to print to be relevant, otherwise it is theoretical right?

 

(Personally I think they are all showing the same info (DOM, chart), some people rely on volume as an extra, some of us dont - simple, its just a preference of what you want to read.)

 

I ask this as you are claiming its importance and I am saying it not necessary for some.

I am not going to continue to debate this as I know what happens here when people disagree.

 

Many will see the value in what I am saying , many will not. Does not really matter to me. You are making my point about the hedge fund guy ...... I would follow him and do what he is doing but a CHART will not show you what he is doing. You cannot see his Offers @ 13 so how would I know that unless using a DOM?>

 

I have not fallen into any trap. I learned a long time ago that if you want to be successful then find someone who is successful in what you want and do what they did.

 

Thats what I am doing. That is what works for me .

 

Again I am only speaking from a day trading standpoint.....if you trade off daily's then my information is useless. I am speaking to the people who want the higher probability intraday set ups.

 

Let me ask you a question: do you think that traders on the floors of the exchanges who are trading right there care about chart patterns? What do you think they are watching? Some arbitrary trend line or what the buyers and sellers are actually doing?

 

Gekko out -

[DbPhoenix 42]

Let me ask you a question: do you think that traders on the floors of the exchanges who are trading right there care about chart patterns? What do you think they are watching? Some arbitrary trend line or what the buyers and sellers are actually doing?

 

Gekko out -

 

I'm sure they don't care about chart patterns. Neither do I. As for what buyers and sellers are actually doing, I follow that as well, i.e., what they're actually doing, not what they intend to do.

 

I'm not suggesting that you're lying or deluded. If you're making a living trading this way, great. What I am suggesting is that scalping is not the only way. If you disagree, that is also fine.

[Gekko78 10]

I'm sure they don't care about chart patterns. Neither do I. As for what buyers and sellers are actually doing, I follow that as well, i.e., what they're actually doing, not what they intend to do.

 

I'm not suggesting that you're lying or deluded. If you're making a living trading this way, great. What I am suggesting is that scalping is not the only way. If you disagree, that is also fine.

 

DB,

 

Yes I stated earlier in this post that scalping is not the only way .....there are MANY different ways.

 

One thing I have trouble with then it comes to tick charts( or any chart setting for that matter ) is this:

 

Lets say that you are trading the ES and you have it set to a 200 tick chart.....you are watching the candles, lines , bars whatever , form and you see that right as the tick count hits 200 that the entry has met all of your criteria and you enter the trade long .....now as soon as the first tick hits on the candle , line, bar , a 200 lot sells into the bid dropping the price back down below your entry ....you are now immediately in a losing trade. Had you been watching the DOM you probably would have seen that coming before that .....maybe maybe not ........the point is you DEFINITELY would have not seen that coming simply from a tick chart.....there is no way you could.

 

 

Do I think that a DOM , time and sales are the be all end all of trading ? Nope...not even close.

 

Do I think it gives me odds over guys who just look at charts:? Yep without a doubt,

 

Remember in Vegas the house only has a 1-2% edge over you the customer but that is all they need to make a killing.

 

I am saying that these tools that I use give me an edge ......thats all I need .....even if it is a slight edge it does not matter , an edge is an edge.

[Gekko78 10]

I'm sure they don't care about chart patterns. Neither do I. As for what buyers and sellers are actually doing, I follow that as well, i.e., what they're actually doing, not what they intend to do.

 

 

I'm not suggesting that you're lying or deluded. If you're making a living trading this way, great. What I am suggesting is that scalping is not the only way. If you disagree, that is also fine.

 

Well "intention" often moves the market more than what happened. A guy throws a 1000 lot offer 3 ticks above the price .....that will probably make people nervous .... again something you cannot see on a tick , or any other , chart.

[Roger Felton 10]

I am not going to continue to debate this as I know what happens here when people disagree.

 

Many will see the value in what I am saying , many will not. Does not really matter to me. You are making my point about the hedge fund guy ...... I would follow him and do what he is doing but a CHART will not show you what he is doing. You cannot see his Offers @ 13 so how would I know that unless using a DOM?>

 

I have not fallen into any trap. I learned a long time ago that if you want to be successful then find someone who is successful in what you want and do what they did.

 

Thats what I am doing. That is what works for me .

 

Again I am only speaking from a day trading standpoint.....if you trade off daily's then my information is useless. I am speaking to the people who want the higher probability intraday set ups.

 

Let me ask you a question: do you think that traders on the floors of the exchanges who are trading right there care about chart patterns? What do you think they are watching? Some arbitrary trend line or what the buyers and sellers are actually doing?

 

Gekko out -

 

 

Interesting topic and might be terrific to start another thread with it.

 

Floor traders probably weren't the best example to use, however, since they've been dying off in massive numbers every year for over a decade to the electronic traders...most of whom are chartists.

 

But always stick with what works for you and don't get swayed by anyone.

[DbPhoenix 42]

DB,

 

Yes I stated earlier in this post that scalping is not the only way .....there are MANY different ways.

 

One thing I have trouble with then it comes to tick charts( or any chart setting for that matter ) is this:

 

Lets say that you are trading the ES and you have it set to a 200 tick chart.....you are watching the candles, lines , bars whatever , form and you see that right as the tick count hits 200 that the entry has met all of your criteria and you enter the trade long .....now as soon as the first tick hits on the candle , line, bar , a 200 lot sells into the bid dropping the price back down below your entry ....you are now immediately in a losing trade. Had you been watching the DOM you probably would have seen that coming before that .....maybe maybe not ........the point is you DEFINITELY would have not seen that coming simply from a tick chart.....there is no way you could.

 

 

Do I think that a DOM , time and sales are the be all end all of trading ? Nope...not even close.

 

Do I think it gives me odds over guys who just look at charts:? Yep without a doubt,

 

Remember in Vegas the house only has a 1-2% edge over you the customer but that is all they need to make a killing.

 

I am saying that these tools that I use give me an edge ......thats all I need .....even if it is a slight edge it does not matter , an edge is an edge.

 

Yes, there are many ways. But I don't trade the ES and I don't use 200t charts. I used a 1t chart.

 

As for foreseeing the future, I don't try. I look only at what is, not what might be.

 

But if you believe these tools give you an edge and you're making a living at your trading, there's no reason for you to trade any other way.

[DbPhoenix 42]

Well "intention" often moves the market more than what happened. A guy throws a 1000 lot offer 3 ticks above the price .....that will probably make people nervous .... again something you cannot see on a tick , or any other , chart.

 

Not unless a transaction takes place.

 

Not trying to be argumentative, but an intention is not the same as a transaction. But if one wants to equate the two, that's okay by me.

[Gekko78 10]

Yes, there are many ways. But I don't trade the ES and I don't use 200t charts. I used a 1t chart.

 

As for foreseeing the future, I don't try. I look only at what is, not what might be.

 

But if you believe these tools give you an edge and you're making a living at your trading, there's no reason for you to trade any other way.

 

I do not trade the ES either.....I was just citing it as an example.

 

What is is good .....but what might be moves the market more than you might realize. 1t cannot show this. However if it ain't broke don't fix it

 

Kudos to those that are having success however they trade .

[Roger Felton 10]

DB,

 

Yes I stated earlier in this post that scalping is not the only way .....there are MANY different ways.

 

One thing I have trouble with then it comes to tick charts( or any chart setting for that matter ) is this:

 

Lets say that you are trading the ES and you have it set to a 200 tick chart.....you are watching the candles, lines , bars whatever , form and you see that right as the tick count hits 200 that the entry has met all of your criteria and you enter the trade long .....now as soon as the first tick hits on the candle , line, bar , a 200 lot sells into the bid dropping the price back down below your entry ....you are now immediately in a losing trade. Had you been watching the DOM you probably would have seen that coming before that .....maybe maybe not ........the point is you DEFINITELY would have not seen that coming simply from a tick chart.....there is no way you could.

 

 

Do I think that a DOM , time and sales are the be all end all of trading ? Nope...not even close.

 

Do I think it gives me odds over guys who just look at charts:? Yep without a doubt,

 

Remember in Vegas the house only has a 1-2% edge over you the customer but that is all they need to make a killing.

 

I am saying that these tools that I use give me an edge ......thats all I need .....even if it is a slight edge it does not matter , an edge is an edge.

 

 

Since we're talking about the ES, I suppose we're still on topic....

 

Questions on your hypothetical trade: You're long and someone drops a 200 lot sell order...price drops below your BE and it's now considered a losing trade? Why would that be? Did price hit your stop? The rest of the world stopped trading until the high roller takes you out? What about the guy who pops a 500 lot buy order 30 seconds later?

 

200 contracts in the ES would do fantastic if it was able to move a multi-billion dollar index like the ES two ticks. Remember, it's being instantly offset by all the other trading activity going on. It's not one guy controlling the market, ever.

 

Trading isn't you against the "professionals". There isn't some group of boogeymen sitting around waiting for you to place your 2, 5 or 10 contract orders so they can clobber you.

 

Trading is nothing more than you against you. The biggest heavy hitters in the financial industry are powerless to stop a guy who knows what to do and does it without hesitation, confusion, frustration, anger or fear.

 

I'm talking Futures here and not other vehicles where the cards are stacked way against you before you ever pour your first cup of coffee.

[Gekko78 10]

Since we're talking about the ES, I suppose we're still on topic....

 

Questions on your hypothetical trade: You're long and someone drops a 200 lot sell order...price drops below your BE and it's now considered a losing trade? Why would that be? Did price hit your stop? The rest of the world stopped trading until the high roller takes you out? What about the guy who pops a 500 lot buy order 30 seconds later?

 

200 contracts in the ES would do fantastic if it was able to move a multi-billion dollar index like the ES two ticks. Remember, it's being instantly offset by all the other trading activity going on. It's not one guy controlling the market, ever.

 

Trading isn't you against the "professionals". There isn't some group of boogeymen sitting around waiting for you to place your 2, 5 or 10 contract orders so they can clobber you.

 

Trading is nothing more than you against you. The biggest heavy hitters in the financial industry are powerless to stop a guy who knows what to do and does it without hesitation, confusion, frustration, anger or fear.

 

I'm talking Futures here and not other vehicles where the cards are stacked way against you before you ever pour your first cup of coffee.

 

Roger ,

 

You are missing my point here. You are in a losing trade because what you thought was going to happen , according to your rules , did not and you are in a loss. A S/L order should only be used for emergencies like 10 ticks or something just in case the market shoots through you quickly and you had no time to get out. Having the 10 tick stop and 15-20 tick target is useless( for me) why do I have to get out @15 ticks? What if the order flow is telling me there might be another 5 if I see the set up on the DOM happening? So because it hit 15 I have to get out?? Why should I let price get ALL the way down to my stop loss before I get out? What if I thought price was going up ....and it start to go down and I see sellers coming into the market on the offers selling into the bids?? Should I wait and let everything get all the way down to my S/L?? No way ....I would rather take a 2-3 tick loss than a 10 tick loss. If you are reading order low correctly you should never have a 10 tick loss.

 

The number of contracts is irrelevant I just picked 200 out of thin air ....make it whatever number you wish.

 

You are correct though in saying trading is not you against the pros........The pros are not against you either but they know when people are going to make stupid mistakes like cross overs , breakouts of trendlines etc....so will they take advantage of that if they see it ? Of course. they will , why wouldn't they? That is why they are pros. The point is to "recognize" what the big guys are doing and go with them......If you do not see big orders coming through on what should be a breakout then why would you go long and trade it? Because some line went through another line marked 0? Or because a candle formed above where price stopped before?? Because the amount of ticks that I have programmed on my chart ended above it? I want to see big orders coming through and the bids going up , I want to see the offers hammering the bids and the bids sticking. then I know its real .....not because a candle closed at some random point that wouldn't have happened had I set the tick count another 10 higher or lower.

 

What about the guy who pops a 500 lot buy order 30 seconds later?

What about him?? If the offers are heavier then his order does not matter. If the offers keep coming in they will eat his 500 buy for breakfast and the offer will keep refreshing........if the 500 lot cannot make the market go bid then that is a sure sign of weakness..... and I would be shorting.....YET AGAIN something you will not see on a chart.

 

 

Tick charts , candles , lines bars and all that stuff show the PAST ...it is always the PAST even a 1tick chart is the past ....it does not form until it already happened.

 

We can either keep going on and on about this if you want to but I see no point in it. I am not going to change anyones mind and no one is going to change mine.

[kuokam 10]

What about the guy who displays the 200 order just to lure you into the trade and then pulls his order before hitting you and go beyond? Or the robot that splits a 1000 order in 100 parts, that go unnoticed to many? This is real world DOM.

[Roger Felton 10]

What about the guy who displays the 200 order just to lure you into the trade and then pulls his order before hitting you and go beyond? Or the robot that splits a 1000 order in 100 parts, that go unnoticed to many? This is real world DOM.

 

Anyone who can profitably trade by watching the order flow on a DOM is a better trader than I'll ever be. All those flashing numbers changing 15 times a nanosecond would give me the DT's by the end of the day.

Edited March 1, 2013 by Roger Felton

[Roger Felton 10]

Roger ,

 

You are missing my point here. You are in a losing trade because what you thought was going to happen , according to your rules , did not and you are in a loss. A S/L order should only be used for emergencies like 10 ticks or something just in case the market shoots through you quickly and you had no time to get out. Having the 10 tick stop and 15-20 tick target is useless( for me) why do I have to get out @15 ticks? What if the order flow is telling me there might be another 5 if I see the set up on the DOM happening? So because it hit 15 I have to get out?? Why should I let price get ALL the way down to my stop loss before I get out? What if I thought price was going up ....and it start to go down and I see sellers coming into the market on the offers selling into the bids?? Should I wait and let everything get all the way down to my S/L?? No way ....I would rather take a 2-3 tick loss than a 10 tick loss. If you are reading order low correctly you should never have a 10 tick loss.

 

The number of contracts is irrelevant I just picked 200 out of thin air ....make it whatever number you wish.

 

You are correct though in saying trading is not you against the pros........The pros are not against you either but they know when people are going to make stupid mistakes like cross overs , breakouts of trendlines etc....so will they take advantage of that if they see it ? Of course. they will , why wouldn't they? That is why they are pros. The point is to "recognize" what the big guys are doing and go with them......If you do not see big orders coming through on what should be a breakout then why would you go long and trade it? Because some line went through another line marked 0? Or because a candle formed above where price stopped before?? Because the amount of ticks that I have programmed on my chart ended above it? I want to see big orders coming through and the bids going up , I want to see the offers hammering the bids and the bids sticking. then I know its real .....not because a candle closed at some random point that wouldn't have happened had I set the tick count another 10 higher or lower.

 

What about the guy who pops a 500 lot buy order 30 seconds later?

What about him?? If the offers are heavier then his order does not matter. If the offers keep coming in they will eat his 500 buy for breakfast and the offer will keep refreshing........if the 500 lot cannot make the market go bid then that is a sure sign of weakness..... and I would be shorting.....YET AGAIN something you will not see on a chart.

 

 

Tick charts , candles , lines bars and all that stuff show the PAST ...it is always the PAST even a 1tick chart is the past ....it does not form until it already happened.

 

We can either keep going on and on about this if you want to but I see no point in it. I am not going to change anyones mind and no one is going to change mine.

 

Well I've sure been known to miss the point from time to time. I probably did again upon reading your take on charts producing data that is older than that on a DOM. Really? I've watched them side by side for years and never noticed any difference whatsoever.

 

What causes the chart data to be "in the past" versus DOM data? This is not to argue the point, but to understand it. Much of what I learned about trading was from asking questions.

 

Thanks

[Gekko78 10]

What about the guy who displays the 200 order just to lure you into the trade and then pulls his order before hitting you and go beyond? Or the robot that splits a 1000 order in 100 parts, that go unnoticed to many? This is real world DOM.

 

Yes you are correct , and if you have the right tools you can see the 1000 lot print. NJ will not show you that but other tools will. Learning the market profile does not happen over night. It takes a while to see how the markets actually work.

 

Also the 200 order you talk about then pulls it , you will not see on a chart.

[Gekko78 10]

Well I've sure been known to miss the point from time to time. I probably did again upon reading your take on charts producing data that is older than that on a DOM. Really? I've watched them side by side for years and never noticed any difference whatsoever.

 

What causes the chart data to be "in the past" versus DOM data? This is not to argue the point, but to understand it. Much of what I learned about trading was from asking questions.

 

Thanks

 

I thought you were some kind of teacher? If you really have to ask this question I suggest you Google it.

 

Here :......A tick is a single trade irrespective of size. A tick chart builds each bar based on a certain number of ticks per bar. A 233 tick chart will create a new bar after every 233 trades have gone through. BOTTOM LINE IS NOTHING PRINTS ON A CHART UNTIL AFTER IT HAPPENS......Do you know of a chart the shows orders being placed 10 deep?? I thought not. Do you know of a chart the tells you how many contracts went through on that 1 trade? Not the tick , the trade. Dont you think it might be just a little bit helpful to know whether price ticked up because of a 20 lot order or a 200 lot order?? I sure would like to know....... Don't you think it would be just a little bit helpful to know how many contracts traded at the price 10 ticks above you entry if you have a 15 tick target?? I sure would like to know.........

 

Allow your mind to accept this ...... it is not rocket science. It is hard to learn but once you learn it you will never trade the same again.