a picture is a thousand thoughts....
a large player can slice through bids, trapping the bidders, the advantage the large player has against numerous small players is instantaneous force. Whereas numerous small players have to be entrained into action over a period of time.
the average for every tic of slice is around 500 contracts, 500 x 4 x 10 = 20,000 contracts for every 10 points of slicing. A 30 point move in ES entails 30 = 60,000 contracts contracts, with no capital revitalization. How much margin is required for 60,000 contracts by the exchanges? 7088 per ES contract. 500 million, not much really if you look at the capital flows some of the large funds control, and not to mention some large families.
lets even double that number to 1000 per tic, so a billion. A billion dollars dumped into index futures can alter sentiment of a nation when its timed during news events irrespective of the actual news. Thats how the game is played.
the average for every tic of slice is around 500 contracts, 500 x 4 x 10 = 20,000 contracts for every 10 points of slicing. A 30 point move in ES entails 30 = 60,000 contracts contracts, with no capital revitalization. How much margin is required for 60,000 contracts by the exchanges? 7088 per ES contract. 500 million, not much really if you look at the capital flows some of the large funds control, and not to mention some large families.
lets even double that number to 1000 per tic, so a billion. A billion dollars dumped into index futures can alter sentiment of a nation when its timed during news events irrespective of the actual news. Thats how the game is played.
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a billion dollars timed with a news event will buy you 30 points in spooz. Psychology during news events has been trained to believe that it is a real event, that same psychology has been engineered over the years. FOMC dates, economic reports...central bank speakers...
during news events, price can traverse the ladder since the tic average is far minimal, its just air. On FOMC day all it took was a billion dollars in index futures.
It takes much more cap to move price, when there is no news.
during news events, price can traverse the ladder since the tic average is far minimal, its just air. On FOMC day all it took was a billion dollars in index futures.
It takes much more cap to move price, when there is no news.
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So if this how he game is played. One should sell tops and buy buttoms, like the big guys. Except, nobody knows when they will ove th market like this. There is no easy way to profit from the market that I know of.
you can only tag the big boys, follow price action, or follow the summation of orderflow. Going against price action is suicide.
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these are all just imprints of orderflow, and its suicide to go against it, for swing trading, you can use the summation of the weeks action to determine who won, the bulls or bears..
notice last few minutes they gapped it up, because at the current moment, the market climate is still buyside.
notice last few minutes they gapped it up, because at the current moment, the market climate is still buyside.
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take a look at the COT report from the CFTC, 8 or less of the largest traders control 34% of the open interest. With net long going into October about 2%...or 40K contracts.
http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm
http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm
all of it (futures trading) is big boys' game where they try to milk retail trader from $$$$$. Queston is how to milk them?
you can only move with them, and when you see distributive type pattern, you can frontrun them before they harvest.
edit: you have to think like them, and have similar considerations in terms of liquidity and positional sizes. If you see prices gapping during low liquidity times, its an indication of underlying bias or interest or manipulation. During AH trading, prices initially fade(run stops) on the forthcoming gap bias. A core position is obtained whether it be long or short, then rest of capital is used to gap the price, and at the new level, distribution occurs and cap reserves are raised. Then this pattern is repeated. Basically recycling cap reserves becomes paramount, since if you keep yourself mostly invested, you loose force in the market and cant challenge rogue capital pools who aren't on the same page as you.
At any given time there is a path of least resistance. And its easier to take prices in that direction on a temporal basis.
edit: you have to think like them, and have similar considerations in terms of liquidity and positional sizes. If you see prices gapping during low liquidity times, its an indication of underlying bias or interest or manipulation. During AH trading, prices initially fade(run stops) on the forthcoming gap bias. A core position is obtained whether it be long or short, then rest of capital is used to gap the price, and at the new level, distribution occurs and cap reserves are raised. Then this pattern is repeated. Basically recycling cap reserves becomes paramount, since if you keep yourself mostly invested, you loose force in the market and cant challenge rogue capital pools who aren't on the same page as you.
At any given time there is a path of least resistance. And its easier to take prices in that direction on a temporal basis.
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scaling in entry. Reductive, ie...5,000 4000 3000 2000 1000, its not as profitable if you buy the same amount as the price gaps up or sell the same amount as price gaps down. Thus scaling in, and notice after each gap, there is a distributive phase, the gap heights are becoming less and less, and gap size increased to the downside. It basically gives indication of underlying intent.
Even though, my long term bias is up for equities, retracing the ATR will washout players who are coattailing the bigboys in terms of positions.
Even though, my long term bias is up for equities, retracing the ATR will washout players who are coattailing the bigboys in terms of positions.
