TA + DOM Trading

faat

Junior member
15 0
Hi everybody,

Does anybody use a combination of both technicals and DOM to trade? I guess this applies mostly only to day trades as DOM would be of more significance if you are entered a trade at that moment and scalp for a couple ticks or points.

Basically, you will wait for price to reach an area of interest and you watch the DOM to try to figure out if the bulls/bears have won and enter a trade based on what you have figured out. This will fine tune entry points as opposed to waiting for a signal bar to form or even worse, a signal bar may not form and market just leaves without you.

Thoughts on this?
Willing to elaborate further if you guys don't understand what I'm trying to put across.

Cheers!
 

timsk

Legendary member
7,122 1,897
. . . Thoughts on this?
Hi faat,
In general, my perception is that thoughts range from the DoM being pretty well redundant these days in the face of HFT - to being absolutely critical to a trader's success. As with anything trading related, it doesn't much matter what others think and believe; all that matters is what you think and believe and what works for you. One thing I would say is that if you're going to look into it seriously, then it's imperative to have quality data to work with. Don't assume that what your broker gives you is up to the task - as it may not be.

If you're wanting to read around the topic here on T2W, then the forum guru is Peter Davies, aka 'Dionysus Toast'. Here's one of his threads and an article by him to whet your appetite:
The Order Book - Why Bother?
Understanding Liquidity and Market Pullbacks
He no longer posts here but, if you want to make contact with him, he has his own DoM tools that he sells via his website: JigsawTrading.
Tim.
 
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faat

Junior member
15 0
Hi faat,
In general, my perception is that thoughts range from the DoM being pretty well redundant these days in the face of HFT - to being absolutely critical to a trader's success. As with anything trading related, it doesn't much matter what others think and believe; all that matters is what you think and believe and what works for you. One thing I would say is that if you're going to look into it seriously, then it's imperative to have quality data to work with. Don't assume that what your broker gives you is up to the task - as it may not be.

If you're wanting to read around the topic here on T2W, then the forum guru is Peter Davies, aka 'Dionysus Toast'. Here's one of his threads and an article by him to whet your appetite:
The Order Book - Why Bother?
Understanding Liquidity and Market Pullbacks
He no longer posts here but, if you want to make contact with him, he has his own DoM tools that he sells via his website: JigsawTrading.
Tim.
Hey Tim,

Thanks for the advice and I'll look up what kind of data feed I'm getting but I think it should be fine as my broker is one of the largest and well known in my country.
Thanks for the links and they sound like what I was looking for!

All the best for trading!

Cheers!
 

wartrace

Newbie
2 1
I use the Jigsaw tools but do not use technical analysis to trade. I use the DOM and a footprint chart. All I am looking for is exhaustion, absorption, momentum and order imbalances.

Now I might be called a liar regarding "not using technical analysis to trade". I do Use the volume profile. I do not know if that qualifies as a "technical indicator". I also have a CCI and a T3 moving average on my chart. I DO NOT use these to enter trades; they are used as a "reality check" when considering a trade.
 
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faat

Junior member
15 0
I use the Jigsaw tools but do not use technical analysis to trade. I use the DOM and a footprint chart. All I am looking for is exhaustion, absorption, momentum and order imbalances.

Now I might be called a liar regarding "not using technical analysis to trade". I do Use the volume profile. I do not know if that qualifies as a "technical indicator". I also have a CCI and a T3 moving average on my chart. I DO NOT use these to enter trades; they are used as a "reality check" when considering a trade.
I think I totally understand where you're coming from. I am currently trading using charts but have been slowly incorporating the DOM into my strategy. (Will slowly try to trade using the DOM after going through all of Peter Davies' videos on DOM trading)

I agree the volume profile is crucial in determining the entry of a trade as compared to just the charts since you can't tell from charts the way how the prices were traded.

Don't mind me asking but how long have you been trading using the DOM and how much time did you take to get the hang of it? Peter did mention in his videos that one guy took 14 weeks.

Cheers!
 

wartrace

Newbie
2 1
It took me quite a while to understand the Depth of market. It took me around four months to understand it. Do the drills like "uptick-down tick" and just watching one side of the market.

I will share some of my observations;
1) You would be better served by just watching one market. I just trade the 6E and I strongly feel that if you watch one market you get to know how it behaves.

2) The consolidated tape is useful. Watching the pace of the tape on "all trades" and having a second tape up of large trades helps. You really can't use it to trade though. In my experience it is all about how the limit orders react to aggression.

3) Unless you have a fantastic memory having a footprint chart up is very useful. You can look back in time at the trades.
 

faat

Junior member
15 0
It took me quite a while to understand the Depth of market. It took me around four months to understand it. Do the drills like "uptick-down tick" and just watching one side of the market.

I will share some of my observations;
1) You would be better served by just watching one market. I just trade the 6E and I strongly feel that if you watch one market you get to know how it behaves.

2) The consolidated tape is useful. Watching the pace of the tape on "all trades" and having a second tape up of large trades helps. You really can't use it to trade though. In my experience it is all about how the limit orders react to aggression.

3) Unless you have a fantastic memory having a footprint chart up is very useful. You can look back in time at the trades.
I currently do only trade 1 market and that's the ES during Asian and Euro. DOM isn't that useful pre-Euro because the volume is thin and price moves slowly IMO but it does get volatile at times.

I'm using xtrader right now so do you think that would be enough for the time being to learn the basics before hopping on to jigsaw? I agree the footprint would be useful if not yes you would really need to remember huge orders up or down like 5 levels.

Thanks for you input!
Cheers!
 
Last edited:

Lúidín

Established member
818 61
I currently do only trade 1 market and that's the ES during Asian and Euro. DOM isn't that useful pre-Euro because the volume is thin and price moves slowly IMO but it does get volatile at times.

I'm using xtrader right now so do you think that would be enough for the time being to learn the basics before hopping on to jigsaw? I agree the footprint would be useful if not yes you would really need to remember huge orders up or down like 5 levels.

Thanks for you input!
Cheers!
if you post a picture of what you are using..then maybe you will get some worthwhile comments

in daytrading..data representation is everything..words mean nothing
 

faat

Junior member
15 0
Hey Robinoft,

This is a great one for me and many others I believe.

http://www.jigsawtrading.com/learn-to-trade/free-order-flow-analysis-lessons/

Cheers and good trading!

Hi all,
actually, I have found a few interesting things on YouTube about Order Flow.

Here are the links below :

https://www.youtube.com/channel/UCW-m-lEeboc7OQ8pNTuWpBg
https://www.youtube.com/channel/UCEJQmAIhc83eqP6ymuwfL8g
https://www.youtube.com/channel/UC3HKlZ_7gxRgef9SCxu54Lw
https://www.youtube.com/user/OrderFlowAnalytics

Do you know any other videos or websites with free content ?

Many thanks.
 

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