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Old 13-04-2012, 12:03 AM
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Default Understanding Big Limit orders-order flow analysis

Originally Posted by pipeman View Post
What kind of analysis do you apply, can elaborate them in brief


It involves calculation of aggressiveness in trend depends on whether last price keep hitting on the bid or on ask for one resistance/support zone and compare the level of aggressiveness with previous resistance/support zone.
If last prize is hitting on ask price then there is higher level of aggressiveness to get long, when this happen on reversal zone then it almost give the entry at bottom and hitting stop losses to such entry means certain change in market condition which can give us high probability to stop and reverse. On chart it looks like market cracked with jump in volume.
When market is in rotation mode depend on the instrument most of the time there is common pattern of bid size and ask size so with this it gives vital sign of whether market is in trend zone or rotational zone.
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Old 13-04-2012, 12:14 AM
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Originally Posted by rocky9281 View Post
I have been following this setup for past 1 month and I proudly say that I am having very few losing days. In fact, I am making money most of the days.
I love to call this Complete idiot's trading system because it doesn't involve any kind of analysis .

Here are the steps:
1. Find an instrument that has consistent record of closing far away from the opening price(either upside or downside), i.e a volatile one. I am using Infosys right now.

2. After the market opens , enter with buy (or sell) and maintain a very close reversal point. That is, suppose you bought at 2815, then you maintain a reversal point of 2810. Your motto is to stay long above 2810 and short below 2810.

At the end of the day, you will make a good amount of money. Sounds stupid? try to paper trade and see the result.

Disadvantages of this system:
1. The stock may whipsaw the reversal point several times, thus you will lose a lot during those times. This is the only disadvantage of this trading system.
On other days, you can be right just after 1-2(maximum) whipsaws only

2.The other disadvantage is not only for this system, its a general one for any system, which is , you wont make any money(or even lose money) on days when the stock doesn't give rise to any kind of trend and ends within the trading range.

If it works for you then don't bother about anything man... It reminds me of one such system where entry is random based on toss of coin, and when system enters in market stop loss will be in place depends on some percentage of average true range which keep trailing as long as market is in favor if market is not in favor then stop loss will not trail till it hit ( it will happen either by shrink in volatility or opposite directional swing ) and when market swing enough in favor system will scale out profits after certain profit targets and system generated enough profit, intention of the system crater was to show the power of position sizing and money management and importance of exits rather than entries. If you have good entry system then it wont hurt
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Old 13-04-2012, 12:48 AM
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Originally Posted by rocky9281 View Post
I have been following this setup for past 1 month and I proudly say that I am having very few losing days. In fact, I am making money most of the days.
I love to call this Complete idiot's trading system because it doesn't involve any kind of analysis .

Here are the steps:
1. Find an instrument that has consistent record of closing far away from the opening price(either upside or downside), i.e a volatile one. I am using Infosys right now.

2. After the market opens , enter with buy (or sell) and maintain a very close reversal point. That is, suppose you bought at 2815, then you maintain a reversal point of 2810. Your motto is to stay long above 2810 and short below 2810.

At the end of the day, you will make a good amount of money. Sounds stupid? try to paper trade and see the result.

Disadvantages of this system:
1. The stock may whipsaw the reversal point several times, thus you will lose a lot during those times. This is the only disadvantage of this trading system.
On other days, you can be right just after 1-2(maximum) whipsaws only

2.The other disadvantage is not only for this system, its a general one for any system, which is , you wont make any money(or even lose money) on days when the stock doesn't give rise to any kind of trend and ends within the trading range.


It is only (Opening)Range break-out system. You explained in your language.
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Old 13-04-2012, 09:22 PM
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Originally Posted by trader08 View Post
if its not reflect on price or volume chart then,
how to use those non-executed order for trading decision?

Originally Posted by alex View Post
Trader08's question was exactly my question

Still no reply from anyone Ok lets start with whatever knowledge we have.

First,lets study a large limit order a bit closely.

Ok pal so you have spotted a bid of 80,000 shares at price level 123.25.What does this mean to you? It means a lot!!!

Basic questions that are supposed to come to your mind:
1. Why the f should I concentrate on searching for big limit orders?
2. Is this bid real or fake?
3. Does this bid actually indicate support?
4. Is this bid coming from public or the big boys?
5. Why is this bid not hidden?If its from the pros,why are they disclosing their intentions to the public?
6. If this bid is real, who is hitting it? public or the pros? (probably the most important question)
7. Why does the pros put bid instead of placing market orders while accumulating?
8. How do we detect true large bids that are "hidden" from the public?
9. Lastly, will I go with the bid? or wait for more confirmations before putting on the trade?

Guys please participate if you really wish to learn. I am just a beginner and can't write the whole book alone

I don't know if the answers to the above questions will make you a millionaire, but one thing is for sure, they will definitely help you to quit your daily job.

Last edited by rocky; 13-04-2012 at 10:39 PM. Reason: Last line added
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Old 13-04-2012, 09:56 PM
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Could any moderator move few last posts please to separate section 'Order Flow analysis' which is anyhow missing in our forum and I have few stuff to add and hope with descriptive header could attract other participants in discussion.
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Old 13-04-2012, 10:56 PM
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Its necessary that we become familiar with the following terms before we proceed :

1. Order lifting
2. Order pulling.
3. Short squeeze (or long squeeze)
4. Domino effect.
.
.
.
.
.
.

Its you who is going to define them. Waiting for you
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Old 14-04-2012, 01:05 AM
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Originally Posted by rocky9281 View Post
Its necessary that we become familiar with the following terms before we proceed :

1. Order lifting
2. Order pulling.
3. Short squeeze (or long squeeze)
4. Domino effect.
.
.
.
.
.
.

Its you who is going to define them. Waiting for you

Lets move the posts and we will begin and utilise week end with healthy discussion. Subject is very liquid in form and terms will be inadequate to explain each and every behavior but I hope that other members will hop in and share the views else it will be no difference discussing with friends on yahoo
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Old 14-04-2012, 08:36 AM
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Originally Posted by alex View Post
Lets move the posts and we will begin and utilise week end with healthy discussion. Subject is very liquid in form and terms will be inadequate to explain each and every behavior but I hope that other members will hop in and share the views else it will be no difference discussing with friends on yahoo

Shall we start a new thread for these? Maybe this will be a better idea.

Suggest me the category under which to start this thread and also suggest the thread topic name

Last edited by rocky; 14-04-2012 at 08:54 AM.
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Old 14-04-2012, 05:21 PM
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Default Understanding Big Limit orders-order flow analysis

Lets study a large limit order a bit closely.

Ok pal so you have spotted a bid of 80,000 shares at price level 123.25.What does this mean to you? It means a lot!!!

Basic questions that are supposed to come to your mind:
1. Why the f should I concentrate on searching for big limit orders?
2. Is this bid real or fake?
3. Does this bid actually indicate support?
4. Is this bid coming from public or the big boys?
5. Why is this bid not hidden?If its from the pros,why are they disclosing their intentions to the public?
6. If this bid is real, who is hitting it? public or the pros? (probably the most important question)
7. Why does the pros put bid instead of placing market orders while accumulating?
8. How do we detect true large bids that are "hidden" from the public?
9. Lastly, will I go with the bid? or wait for more confirmations before putting on the trade?

***********
Before we proceed further,its necessary that we become familiar with the following terms :

1. Order lifting
2. Order pulling.
3. Short squeeze (or long squeeze)
4. Domino effect.

Guys please participate if you really wish to learn. I am just a beginner and can't write the whole book alone

I don't know if the answers to the above questions will make you a millionaire, but one thing is for sure, they will definitely help you to quit your daily job.
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Old 14-04-2012, 11:40 PM
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Originally Posted by rocky9281 View Post

I don't know if the answers to the above questions will make you a millionaire, but one thing is for sure, they will definitely help you to quit your daily job.


I don't think anybody can answer those questions .But you do not need to know it for trading profitably

Order Flow trading is all about understanding WHAT will cause order flows If we know what will cause order flows we can anticipate the orders in a particular direction. It is understanding WHERE AND HOW THE OTHER PARTICIPANTS WILL REACT and taking side with those who are 'showing their hands' and join them for the ride.
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