Last Updated:

ES 09-18 / 25 June 2018

wtl Daily Digest

In my opinion objectivness in trading is to a certain degree only possible if a trader understand how an order books works. With the accurate data feed and based on order book he can see and recognize what is actually happening and what is likely to happen. 

A good comment on Twitter about: "Market is acting base on news. My experience suggests its difficult to fit in logic in such trend n times. Market auctioning will be back to normal soon but it doesn't due to news then need to analyse the size n impact of fundamentals n manage risk.", makes me think about it more deeply.

My experience support this meaning. With sudden eco or political news it is not possible to predict where the market is heading. Simply stay out and wait. 

See this screenshot: 

But when the dust settles you can begin to follow the order book track. 

Look here: 

I've missed the selling from beginning and my strategy is to wait patiently until a reversal or retracement takes place. This was the case @2733.50 around 9am (EST) as you can see in the pictures above.  

My tweet: 

I wish I could see that every day in that clarity. I wrote in MAE and MFE post:

My Conclusion

Is this science? In my opinion it is not. It is all about reading the volume, seeing liquidity filling or missing in the order book. Where are the "Ceilings" and "Floors"? Which side is strong and which is not? Where is the price vacuum?

And at the end: There is always luck involved in trading! 

It is just not what you think it is. The luck is not whether you make money or not during your trading career. The luck is how much you make. 

Here's some examples from my trading experience:

You see liquidity comes in on the screen, in time. You place the trade. It goes in your favour for, let's say, 10pts in ES. Next day you see the same set up, liquidity shows up, you take the trade but you make only 2 pts in ES. Or in worst case you are being stopped out. 

It depends of the day and time if other big market player want to play or not. It doesn't depend on you. However, if you make right trading moves, you'll still make money. 

Stay in touch and leave a comment.