When the internet came out folks didn't realize how the world permanently changed, and it took most a long time to adapt.
COVID permanently broke liquidity, as well as the dawn of more and more algos and HFTs.
As someone who's watched a DOM and never deviated from it for 7+ years, the market regime is not what most think it is anymore. It hasn't been for some time now. It's not until a low VIX that things really have shown its hand. Or maybe as I adapt to environmental shifts and gain more valuable experience I start to really see it for what it is.
You'll see a lot of old school traders on twitter complain about the environment, and it wont ever go back to how it was.
Its not your dads market.
A lot of tools traders use IMO is outdated.
Sure some things I may dismiss are being used successfully by others. But I don't see others trading.
I sit in the fucking trenches and toss hand grenades day in day out, and share the ugly things I experience as well as the big ah ha moments. I share my evolution through this journey.
Traders have knocked on RTY not being correlated nor related so how does that work. I have hundreds of documented trades to this day showing it work as well as hundreds of documented footage showing correlated order flow events across RTY NQ and ES at the same time.
I've been known as an orderflow guy and a lot of traders think it's a magic bullet. It's been about price action and always has been...
See the markets move together even if not correlated. Sure there's disconnect and deviations, but every fucking day there's common orderflow events that hit at the same time.
Each product has its own auction process. Sometimes they sync with others sometimes they dont.
My best trades are when all 3 sync like this PNL from today, and there's more trades just like this all on my KO-FI membership: https://t.co/Xx65lb5nCq
hundreds of trades and well over hundred fifty hours of material.
ES doesn't move under its own order flow much these days. Yes I know its fucking roll over but the way it behaves is the same when its not.
If NQ isnt moving but in a tiny 4 tick range you may see several seconds - which is an eternity in my world - of zero order flow on ES. Its when NQ moves and pauses so does ES. Not always but most of the time. Sometimes NQ rips and ES will reload the rip iceburging.
Sometimes ES and NQ move hard and RTY syncs up and the spread moves with no order flow. Look at a Bitcoin futures DOM on the CME and you'll see exactly what I'm talking about.
These markets are all interconnected whether correlated or not and the entire thing is arbed and hedged to death that it will all move at the same time.
Now again theres drift between products. Also I understand there may be outliers like fucking hogs or some shit. But as far as indexes go its all connected.
Also market orders on both sides almost always always balances out.
I look at this shit on the smallest time frames, that being a 3 second chart and will the DOM itself. The micro auctions - everything is fractal - are going to effect your time frame that maybe higher up than what I use. Also when you enter a trade you are entering on this micro level but may just not see it for what it is because to you its noise you never took the time to learn how to read.
There's small auctions on the smallest time frame. You can draw and get perfect bell curves on these every day. The algos also strategically trap specific prices to a tick. To a fucking tick. And you can see how it forces runs. Now my public youtube doesnt talk about trapping as a full on isolated subject. However in my KO-FI I talk about it a ton...
The market on this small time frame runs on micro stop runs. There's no liquidity. I mean there is but it aint like it use to be and yet the daily volume since before broken liquidity and now is the same. This is why the markets are choppy as fuck and it aint going anywhere. Same daily volume, way less liquidity - more chop means they're cycling specific prices more to get in the size they use to back before the liquidity was broken.
Now the thing is on the micro ranges, and even medium sized to larger ranges the delta or market order sells and buys almost always balance out. It never truly tells you one side is significantly more bought than sold if it breaks up. Only after the break up it will go imbalanced and show that heavy skew.
I mean the point of trading is to be in these fucking things before they go anyways.
Now sure it can be imbalanced, but not by much before a break out. You're talking only a few hundred lots at times which aint shit.
Plus old market orders aren't going to have an effect on the break out that happens several minutes later because you need fresh shit to actually push it.
You can often have a imbalance where the buys are more than sells and it dumps down so IMO shit like delta is useless as the price can and does go bother ways whether its balanced or not. I understand this will upset people and thats fine.
What delta traders and footprint traders are not seeing is the limits, and how crucial that is. Delta does not factor in limits, so when you see it inverse you may think its absorption yet sometimes the delta just moves with the PA. And footprints are the same fucking information as the markets on the inside of a DOM just cut up into chart format. Which footprint is not including the limits.
You're essentially only seeing half the information.
Everything is a derivative of limits reacting to markets - from price action, to profiles, to deltas to moving averages and it goes on.
All these tools and shit neuter the information coming from the source itself thus chopping it up making it not what it is anymore skewing it into some new thing to where we attempt to find some repeatable pattern.
The total market buys and sells almost always balance before a move and again after the move it skews. So how is the market moving?
Order flow is no secret and hasn't been - so bigger players have to be craftier. If the markets skewed all the time where more buy orders are seen consistently for break outs, then you retail traders would exploit it and why wouldn't the algos and HTFs just take that from us, to create a more efficient market?
Traders also seek out MBO because they think that can give some information and again that's no secret either.
It's limit orders pulling that creates a lot of these movements. You can have more buy orders than sells in a micro range and the fucker collapses down, and its because the limits pulled, thus less market sells can push the market further than what is required to go up.
These FOMC, CPI rips are because the fucking limits thin out and pull. Plus a heightened increase of actual volume, and ---- correlated moves syncing up.
Chances are market makers on the CME in futures are not specializing in making just ES. Chances is these market makers are across multiple assets. They obviously use technology to move limits faster than a human. I mean look at a bitcoin DOM or notice an NQ DOM you can see 100 - 50 lots straddle several points away from the spread on both the limit buy and sell. Always pulling and straddling almost the same exact distance from the spread never staying on into the the spread. Pulling and stacking just as quick as price moves.
When there's a kooky orderflow event these market makers pull and pull across multiple products at the same time. Also there's a huge correlated flow on market orders across multiple assets as well when this happens so there's something there as well, which this shit just goes to show how connected it is.
However when its quiet and the pulling isnt aggressive the price will rotate exact ticks creating traps, trapping these penny pinchers like market makers or HFTs forcing stops, and stops can be further forced by limit pulls.
Now I don't think there's one dominate force at play. I think they all fight each other but it just happens to be at the smallest time frame. Which can yield great money. I mean you can make a hell of a living on 2 points per day in the ES on a little bit of size.
Again forced micro stops clears inventory and creates another cycle that does the same thing, which effects every time frame above that. If its hard for me to run a trade to a some what conservative target these days then I know it effects you guys on larger time frames because I also leverage HTF setups that can often fuck check your entry multiple times over and attempt to stop run the original entry multiple times over.
The fucking thing is stopping both sides on the micro several times over especially in a low liquidity lower VIX environment. Even on hard volatile moves these days and the open we still get to the tick overly abused rotations causing traps.
A good environment that traders thrive in is when rotations on the micro bleed a bit and rarely hold to the tick on rotations.
Just saying. I hear folks on HTF complain about this environment but the thing is understanding the micro is key to understand why this is the way it is. When you understand why - then you can adapt.
I made a video on why you should scalp in 2024 - https://t.co/3qoYAb1rKi
And this post is to follow up to that.
Knowing this shit raw bar to bar movements shows who and where is getting trapped. The crux of my "momentum trading" has always been tracking these areas.
Stops are not universal either. This is one of those subjects that retail traders horribly over broaden. Stops and the way stops are forced come in many flavors and can be met with reloading to prevent a further blow out, or sometimes the stops fizzle out way quicker than one would expect. This is when it becomes a poker game. Your aces maybe great but as the turn flop and river come the price action in this case will tell you your hand is now shit and you need to fold.
Because in the end -- There's an element of luck on getting your hand to actually carry through. So the skill set of solid management is needed. Also as someone who attempts to trade as precise as possible, the reason for that is it simply takes risk off the table.
The more precise you are and I mean to the tick, because after all the market traps to the tick, and that can be the difference. The more precise the less risk. You took out a ton of risk by doing that.
The less precise the bigger your stops need to be, the bigger the stops, the bigger the targets - or scale outs because targets often dont get hit before the trade rotates back on you. If you're running bigger stops and bigger targets than you will have to sit in a trade longer. The longer you're in a trade the more you're exposed to risk. The more you're at the mercy of time - the more random PA gets - Thus going back to what I've said earlier. They stop run constantly by trapping and moves get going on a lot of limit pulls. So they can stop their way all the way back to you and stop you out multiple attempts before your target. I mean this is why I think management by pure targets and stops with no hands management involved can be the difference between green and red as it certainly is for me.
Another thing I forgot to mention is limit pulls for moves are genius.
Why?
Because everyone sees order flow yet no one, and I mean no one can see if a limit will pull before it pulls. And by the time it fucking pulls it's too late. Now some algos may see it and pull too and will this is why you get these quick fucking runs, which almost always reclaim back but those runs are enough to fuck some traders up pretty good and sometimes the reclaims aren't smooth or dont immediately hit back. See this for reclaims: https://t.co/CVaoXnJqn9
The order flow can only be gamed so much. It lives in a world where it can only do so many things. Its been spoofed in the mid 2000s and when that stopped working the spoofing stopped. The new meta is limit pulls.
I wouldn't call it new. But when I looked at delta for 7 years and the shit never made sense, on why it was always balanced before break outs for the most part or stop runs or it inverted, I soon realized it was limit pulls that really dominate some moves. Limits pull can't be detected in any indicator as again indicators simply pull raw DOM data and skew it up. And as far as I'm aware nothing in the DOM really will let you know if the limits will pull. Now it can be somewhat seen in reclaims, slips, or price action, but again an element of luck is needed for the sustained stop to even carry out, so the skill set of setup quality, and correlation quality is needed as well as fantastic management.
I know this will piss off the delta boys, because for some reason that indicator has a cult like following. Sure you guys can see shit in it I cant see, but keep in mind I've looked at it longer than most and I could never fucking see it. I've use it in unconventional ways to some success in the past and maybe that's what to be done?
But in the end Ive explained why it self contradicts itself.
In 1965, Paul Harvey broadcasted “If I Were the Devil.” It is really amazing to realize over 58 years ago how accurately he “prophesied” the future spiritual condition of the United States. Many of his statements were considered ridiculously outlandish at that time in history. Yet, we find ourselves today experiencing what he predicted. 🔥🔥🔥
Thanks for the video @MaxEvansUMP
There's something called the 'crab mentality', I learned about it over 10 years ago when I was just starting to develop my dream of becoming a professional gamer.
The metaphor is that when there are crabs in a bucket and each one can easily escape... when one attempts to climb out, that crab gets dragged down by other crabs whereby no crabs can escape.
This is exactly what people do to each other by way of discouragement, peer pressure and shaming.
I learned very early on that it's important to focus on taking action and quit trying to explain myself or appeal to others. People will say what they say, they'll put their self-limiting beliefs onto you and they will even mock or bully you for being courageous enough to try.
Maybe it made them feel better or maybe they thought I would notice, but the truth is that I kept my focus on just taking the very next step... one by one.
I always believed that talk is cheap and that success was self-evident, I'd rather make myself known than say myself known.
Having achieved my dream, I left to pursue trading as a career, another impossible task without saying a word. I ditched my old twitter account and literally started in the finance world with 0 followers.
I never officially retired or proclaimed that I would become a trader, I just did it. As I started to gain a bit more popularity it became known that I was trading and, again, people in the gaming world scoffed and mocked the idea.
The truth is that I never let myself listen, I never checked what they said or how they'd said it. I only recently saw some comments on old internet threads today mocking me a few years back in preparation for my upcoming presentation!
It really inspired me actually to write this post because I honestly believe the difference between those who succeed and those who don't is just following through with action in spite of it all.
I never returned to the gaming world and said, "See I told you so" yet so many of my former colleagues have reached out for advice and I have been helping them the best I can. Many are looking to transition just like I did and I think that's incredible, there's a wave of competitive gamers who are eager to dive in.
All this to say that I am not only thankful for haters because they gave me the motivation to succeed, but also thankful that I never entertained those voices.
I think that if I had listened, then I would have surely failed in both gaming and trading because nearly everyone you will ever encounter will commit you to being a dreamer with no future.
I'll end by quoting Theodore Roosevelt's famous speech, 'Citizen in a Republic' aka 'The Man in the Arena':
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
people always ask me “how long” it took for things to click but there’s no definite answer to that because it’s not so much about things “clicking” but moreso our ability to change, by implementing discipline, patience, and consistency. That is entirely dependent on your willingness.
Hey guys I went kind of insane and wrote a massive blog about something that is extremely important to me and a timely representation of how things are going today and an update to some previous models regarding treating trading as a business.
Read here:
https://t.co/Nhtkr3FxMP
I did it all in one 5hr take so hopefully it makes sense, enjoy.
✅Over-trading is really at the core of THE MAJORITY of problems faced by the short-term Trader.
✍️It has many cousins...and is incredibly insidious.
▶️This video sets the foundation on the topic and will help you to understand WHY you KEEP doing it!
https://t.co/Tp8aFIQA9B
Price advertisement. Act now & pay $4100. Sale ends tomorrow & price returns to $4200. Possibly. Also possible is a deeper discount gets offered. So what’s the cost to manufacture? What’s the wholesale price? What’s the MSRP?
People really be kicking it at the gym. I probably look insane because I got one focus going into the gym. No convo, don’t ask me how I’m doing, nothing. Let’s get straight to it. Everything else is a distraction.