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Q&As: order bookThere are people who trade based in order book exclusively & promote these so called orderflow trading platforms, even these days. Surely, it's a great deed to learn this interesting, exotic & unusual skill, but the thing is it's completely unnecessary. The real use cases for DOM aka LOB aka order book aka Level 2 data are mitigating adverse selection, reducing market impact & spotting potential counter agents. If you think deeper, all these issues are really all about position sizing and nothing else, you can operate as big as it's possible (depending how much diminishing returns you can let go), and the only thing that can help you figure it all out is order book. The one & only principle of orderbook analysis is to understand where's us (operators), and where's them (ones who just need to be filled), be nice with yours & be a nice counter agent for them. It's very simple, clients place big orders that immediately stand out. Everything else is us, we're spreading our orders equally all around the book. For some reason not many think about it, but as a maker it's good to not only provide liquidity aka make the market, but also to consume these huge limit orders if it lets you to offload some risk or to open a position if the prices are good. By doing so you always make the market better, the faster and in more clear fashion the market activity is unwinding - better for all of us. If you look at order book histogram and imagine it turned horizontally, you'll see peaks & valleys. So being inside a loading range (past a level) or nearby risk offloading areas (predetermined exit areas), you spread your limit orders the way they kinda fill these valleys, and you can also use market orders to kinda smooth the sharp peaks in order book. That's how you reduce your market impact.Your impact will start being too high when by filling the valleys you'll be creating new peaks, and by smoothing peaks you'll be creating new valleys. Easy enough? All the wise-ass reinforced learning & stochastic control models will output the same behavior, just a bit worse because they'll never defeat your "feel". They way you can process a feedback loop, as an organic, is DOPE. By monitoring your position in the queue you can decide to replace some limit orders that sit deep to somewhere where probabilities won't be your enemies. If you're not in the first 5% of the queue at these places, your're prone to adverse selection. Closer you are to the front of the level, the worse position in the queue is ok. Negligible but stable adverse selection has a huge negative long term impact, should be taken very srsly. In theory, it makes sense to care about order book as soon as you start trading more than 1 lot or if 1 lot is already a serious size on a given instrument. In practice, when you notice a statistically significant drop in revenue per lot on a given instrument, minding all other factors are equal, it's time to open dem books.
LSE:DOMEducation
by gorx1
#XMR - Remins Bullish Aiming for Equal HighsI entered around 190, BY THE timr I posted this it was already 194. In tough timers, look to monero to get you out from under. I've been scalping BTC and ETH. bUT Longing Monero aklways at thje right time. Started with a $100 account for fun in futures, nit at $449 in 2 wees. Now, a larger time frame it did get rejected zt bearish order block (Chart in messae) fahard but rebounded even harder. There's Natural iquidity sitting above the doyble eual highs. That.s where U believe you can take A BULK of you positino off and continue to see where the trade is headed. HTF CHART I don't think ETH amd BTC have hit their lows yet, But Monero will be the one to watch as it continues to climb.
Long
by BodiesXWix
$MTS - To Fill 4 Hr Fair Value Gap on Order Block For Up Bounce*SMT = Smart Money Theory = everything you think that is not retail related to trading. First, SMT does not believe that triangles, wedges , trendlines , channels, harmonics, etc. has any effect on how price reacts. The second is to recognize that the price is not random, it is set by an algorithm controlled by those that control the asset. The Third thing to remember is price will move toward Liquidity and Balance. That's the basics. The rest is very unique in the vocabulary you need to have and the concepts that wrap around these ideas. It's slowly working it's way down into the smart money "Buy Zone" or discounted area. With Kucoins 60% staking of the coin, I'm surprised it's going this low. But I have three short targets along the way up.
MLong
by BodiesXWix
Order Blocks Order Blocks : Candles opposite of trend direction right before the trend Ex GF : 2 huge candle same size with opposite color starts and ends at same place with huge opposite volume ( u can track volume on footprint charts ) why price react to these areas ? market is 2 way street , big boys love to enter the market when lots of ppl either have to exit or make wrong prediction .. for example when everyone think price will go down .. institutions will provide liquidity to them and buy their shorts . price will go down few pip but main direction is still direction of big boys ( Central banks, institutions and hedge funds ) meanwhile there are some small hedge funds and institutions who also think price will go up .. big boys have to provide for them too so that price can move to desired location faster ! that means big boys will be in loss when they provided liquidity for buyers , so now they either have to close in loss or break even .. when is best time for that ? when is best time to close orders with profit ( buy scenario ) ? after taking prev high and grabbing liq from stop losses or buy stops , there is always liquidity above or below recent price structures sometimes this liquidity moves a little but u can track it with help of advanced ATR indicators when is best time to close books in break even ? after reaching prev order block . like i said they were providing liq to sellers and buyers at those order blocks .. means they have to close those orders that were opposite direction . why they provided liq for winners ?? price must clear all the orders at one price levels in order to move to another price level also its so easy to track strength of buyers and sellers with help of Gann look how most important block orders created near the Gann lines . its all mathematically driven ! its all Algorithm !
by apix7
How to trade our signals without sitting at your computer? 🌐How to trade our signals without sitting at your computer? 🌐 When you want to trade, you can choose from at least two types of orders: market order or limit order. - Limit order: The limit order has at least two parameters - target price and amount -, and the exchange fills your order if and when the market price meets your target price. - Market order: The market order has at least one parameter - amount, and fulfills instantly at the actual market price as soon as you put it on the exchange. Besides the number of parameters and the execution time, a third, very important difference between limit and markets orders is the fee because limit orders are much more cost-efficient than market orders. So, we always put entry prices, target prices, and stop-loss prices in our ideas, and when you trade them, you can put limit orders at the given prices, and thus, you don't have to sit at your computer because you build the setup and the rest happens hands-off.
BITSTAMP:BTCUSD
by Elysian_Mind
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