This is an old thread, but very intresting subject. I have started a thread on this topic on a different message boad. Here is my first post and the link:
Most of the people on this forum heard or read about ACV (accumulated volume) and Wall (large) size on bid/ask appearing on the DOM.
ACV was introduced by VSTscalper in the thread ⌠Scalping_My Way with ACV■. Wall was introduced by Jack Hershey in numerous threads, and was/is discussed in Spyder futures thread.
The concept of ACV is that when bid/ask ratio (5 levels of bids and asks in DOM added) is 2:1 or greater, the price will move towards larger side. Which is a bit counter intuitive because one would think that large size means that the resistance will be stronger, and therefore the price should bounce of it.
This is where WALL (large size of contracts on 1 or 2 levels of DOM) comes into the picture. The idea behind using the wall is to see what happens to the price when it touches the wall. If it can not penetrate the wall, that means the change in price direction is taking place and therefore either reverse the current trade in that direction or establish a new one.
One of the things that needs to be monitored is when the wall disappears because orders are cancelled, Time and Sales can be useful as it shows all actual trades.
At first glance ACV and WALL contradict each other. But I found and interesting way to use them combined. If the price penetrates the wall, in the direction of higher ACV ratio (at least 2:1), the momentum is very strong and the probability of the trade continuing is very high. If however the wall holds, then the momentum is in opposite direction since wall and higher ACV act as resistance.
Let▓s discuss this further. It would be interesting to hear other thought and ideas.
Forums - DOM ACV and bid/ask WALL used tgether
Regards,
redduke
but still my morning balance is negative...
