Getting closer to price and volume

[Placebo]

I can't think of any reason why tape reading doesn't work in indian mkt (for that matter in any trading market). That is the basic foundation of price movement i.e. fine balance of demand supply.. Forget the exchange, it works in our vegetable market too

Really ?

And how are you going to do this without an L2 Screen ?

Cheers

 

[AW10]

I guess, you are asking about L2 screen on Veg mkt (hope I am right here else will reply again). Even if it is not screen but there are other signs. As I would map the happenings of local mkt to exchange (taking example of spinach/green peas/seasonal vegs).

Buyers (similar to the bid price of T&S) are measured in local mkt by follwing -

- time of the day - price in morning /afternoon/evening just before sunset are different.
- people in the mkt and their anticipated flow - again morning mkt/noon mkt/evening mkt. Though we have few people in morning still prices will not fall much but by evengin equation is different.
- number of foot print in the shop - seller sitting near the entrance or mid of the mkt commands better pricing than one sitting at the remote end or
- maturity of buyer - gray haired, young man who got more money then time, male/female/kids/

so a seller adjust his selling price (ask price) accordingly. He will also consider the other sellers by
- how many people selling same stuff
- how many of them are professionals (who have well established shops = smart money of mkt) and how many have come by bicycle (sort of daytrader or scared money)
- how many of them are first times or seasoned
- how are other shops placed vis-a-vis his shop etc.

These are some of the demand and supply side of variables that I have observed in local market. So a buyer a seller, I have to decide on how to play them and get the best deal.
Hope this makes some sense, may not be 100% but to large extent I see it similar to mkt auction process.

Happy trading

 

[DanPickUp]

Hi

In some way a funny discussion between Placebo and AW10. I love the sense of humor behind it. :lol::lol:

Have a nice Easter Weekend and hopefully you will find a way to make a clear analyzes about the relation ship between the eggs you found ( Volume ) in your garden or where ever and the value ( Price ) which you found on them.

DanPickUp

 

[rocky9281]

Really ?

And how are you going to do this without an L2 Screen ?

Cheers

Hi Placebo,

Why will it be difficult to trade without L2?

IMO, there are many disadvantages of using the L2. The primary reason being the fact that the sizes are faked most of the times. This problem alone gives rise to several secondary problems like Headfaking etc.

If you still want to give L2 a big credit, I request you to explain why do you think it to be so important.
------------------------------------------------------------------------

Even if it is not screen but there are other signs. As I would map the happenings of local mkt to exchange .

Thanks AW10. What are the "signs" to look for in a T&S ? As far as I know, there are only 2 things that are needed to be deciphered from a T&S - (1)accumulation and (2)distribution by SM. Am I correct? Or are there other things to look for too?

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[Placebo]

Hi Placebo,

Why will it be difficult to trade without L2?

LOL i was talking about the vegetable market mate and pulling AW10's leg

On a serious note , L2 helps in identifying the major players in the markets specially the key market makers. The ones who trade and usually specialize in a particular financial asset and play it day i and day out. The biggest of these big boys is known as the "Ax" which can be spotted only on the L2 screen. Just observe the L2 screen and spot the ax jumping around the bid and the ask. In a Downtrend search for the bids being held and in an uptrend search for the market makers holding the ask.

The Ax often uses a short term strategy where they buy on dips and defend a price level until a short term imbalance is created between demand and supply. Lets call this the "buying on dips" strategy

Probably you are aware of this but the reason headfaking takes place is because there are either excessive buyers at a particular level or excessive sellers when the market makers are using the "buying on dips strategy" . Either ways its harmful for the MM's financial well being and the best way to get rid of this excessive activity is by breaking support and creating a short term panic.

What seems like artificial (fake) activity here is actually the starting point of a big bullish move which can immediately by seen as price reverses instantly if one has access to L2 screens specially when an entire sequence of events unfold slowly and gradually. The sequence starts with spotting an ax , seeing his bullish activity , headfaking and instant bullish reversal.

So i really don't know why HEADFAKING is termed under the problematic category when in reality it is one of the best places to make money. I really doubt you could do the above with an L2 screen.

Cheers

 

[Placebo]

I guess, you are asking about L2 screen on Veg mkt (hope I am right here else will reply again).

I wanted to ask earlier but kinda slipped out of my mind. How would you trade financial markets without the use of a L2 screen ? Only based on Time and Sales like a basic L1 terminal ?

Cheers

 

[rocky9281]

So i really don't know why HEADFAKING is termed under the problematic category when in reality it is one of the best places to make money. I really doubt you could do the above with an L2 screen.
Cheers

Hi Placebo, the way you describe Headfaking, it appears to me that Headfaking is just another term used for shakeout. Am I correct?

Another thing I wished to know from both Placebo and AW10 (I request both of you share your own thoughts) is that, I feel there are only 2 things that are needed to be deciphered from a T&S - (1)accumulation and (2)distribution by SM. Am I correct? Or are there other things to look for too?


Thanks to both of you Gurus in advance.

 

[Placebo]

Hi Placebo, the way you describe Headfaking, it appears to me that Headfaking is just another term used for shakeout. Am I correct?

Another thing I wished to know from both Placebo and AW10 (I request both of you share your own thoughts) is that, I feel there are only 2 things that are needed to be deciphered from a T&S - (1)accumulation and (2)distribution by SM. Am I correct? Or are there other things to look for too?

Rocky

In the context of "buying on dips" Headfaking can be replaced by Shakeout or Fake Breakdown.

Ideally Headfaking is a trick used by the "Ax" to wiggle the strong hands out of profitable positions and triggering their initial stop to create PANIC.

So Headfaking takes place in a bearish scenario as well. You could call it a Fake Breakout , UpThrust etc.

I really don't rely on the time and sales figures man. These figures more often than not will show exactly what someone behind the scene wants and not the real intent of prices. As far as determining Accumulation or Distribution is concerned i use bar charts.

Cheers

 

[AW10]

.........
I feel there are only 2 things that are needed to be deciphered from a T&S - (1)accumulation and (2)distribution by SM. Am I correct? Or are there other things to look for too?

Rocky9281, I am not sure how will you read accumlation/distribution thru T&S. Atleast I don't know about it. Personally I believe that accumulation/distribution happens on longer timeframe / wider price range than few ticks / by multiple smart players sharing the same view.
i don't think T&S will help in that. It helps in what is happening in right now and maybe anticipate the action of next few ticks. Beyond that, we got to look at other timeframe charts. To me it is like <1 sec TF chart hence I don't try to read accumulation/distribution on it.

I use T&S to time my entry /exits and to judge false breakouts v/s real one.
I look for some fast confirmations thru T&S before clicking the confirm button on my order.

Hope this helps.
Happy Trading

 

[rocky9281]

Rocky

I really don't rely on the time and sales figures man. These figures more often than not will show exactly what someone behind the scene wants and not the real intent of prices.

Cheers

IMO, even if some transactions are suppressed (or if false figures are used) during the market hours,they will be updated (or corrected) and added to the existing records and will be visible if we view the same T&S data after the market closes/ or the next day.

Am I correct?