Evening all,
Just a quick couple of questions with regard to large orders that come into the market and the approach that others take;
I am often finding that on markets that attract a scalping strategy and a small drift say is taking place, suddenly a large order (taking the best available price) gets matched causing the price to dramatically 'bulk' and come in. Of course I am left 'high and dry'!
How do others deal with this scenario - to cut out? To wait for the price to return*? Is there a way of foreseeing this happening although the price has already gone beyond the highest resistant point shown on the volume bar?
* Just a few quick notes to add to this in what I do know and highlight what I don't.
If the scenario is reversed and price is coming in and then jumps out suddenly - it could be worth the mention that the market price has given an opportunity for the 'arbers'. Perhaps having the bookies prices on a screen may help with foreseeing this.
Would my observations be correct to say that when such a scenario occurs that the market will often (but not always) go back (albeit some quicker than others)to their original position? Thus an opportunity arises to jump in, knowing the direction?
Do others hold for the market to rise again to pick up their lose money or cut out to take a loss and start over again?
My question is obviously based on markets that attract a scalping scenario.
Thanks all in advance for your time and help!
Ben
Large Orders!
Hello Ben my advice to you is watch as many video,s and read as much as you can, comming to a forum like this with those scenario,s the majority will ignore. You have to find whats right for you, all i can tell you is use your stop loss, no one can do anything about big orders, when they arrive get out, would you wait for a tidal wave to return or risk the chance of being drowned, trading is the smae thing, many moon ago i use to hang on in hope, not anymore it takes time to throw habitsBennyBlanco wrote:Evening all,
Just a quick couple of questions with regard to large orders that come into the market and the approach that others take;
I am often finding that on markets that attract a scalping strategy and a small drift say is taking place, suddenly a large order (taking the best available price) gets matched causing the price to dramatically 'bulk' and come in. Of course I am left 'high and dry'!
How do others deal with this scenario - to cut out? To wait for the price to return*? Is there a way of foreseeing this happening although the price has already gone beyond the highest resistant point shown on the volume bar?
* Just a few quick notes to add to this in what I do know and highlight what I don't.
If the scenario is reversed and price is coming in and then jumps out suddenly - it could be worth the mention that the market price has given an opportunity for the 'arbers'. Perhaps having the bookies prices on a screen may help with foreseeing this.
Would my observations be correct to say that when such a scenario occurs that the market will often (but not always) go back (albeit some quicker than others)to their original position? Thus an opportunity arises to jump in, knowing the direction?
Do others hold for the market to rise again to pick up their lose money or cut out to take a loss and start over again?
My question is obviously based on markets that attract a scalping scenario.
Thanks all in advance for your time and help!
Ben
one thing to really grasp to be a good trader is disconnect with the money, the liability, the PNL (hows it doing etc) and just trade with a at least 60% strike rate.
If I have layed and the horse starts to drift nicely, I always keep a stop loss a few ticks behind incase this situation happens, which it often does.
Then I usually lay again once it starts to drift again.
What I believe happens here is that if a horse starts to drift with a bit of momentum, it means the majority of people in the market believe that the horse isn't worth its current back price. If someone comes in with a single heavy back bet, it means that his opinion is in the minority and although a few traders will panic and join in (believing it will reverse the trend) the majority soon rules again (especially at a better lay price) and the trend will continue to drift.
The exception and one to be careful with is low priced runners. A big back bet, especially 5 - 10 minutes before the off can signal a significant downward trend.
Then I usually lay again once it starts to drift again.
What I believe happens here is that if a horse starts to drift with a bit of momentum, it means the majority of people in the market believe that the horse isn't worth its current back price. If someone comes in with a single heavy back bet, it means that his opinion is in the minority and although a few traders will panic and join in (believing it will reverse the trend) the majority soon rules again (especially at a better lay price) and the trend will continue to drift.
The exception and one to be careful with is low priced runners. A big back bet, especially 5 - 10 minutes before the off can signal a significant downward trend.
Hi Benny
IMHO, it's impossible to predict what will happen.
There's a school of thought that says a big spike will cause everyone who was following a trend to head for the door, which could cause a strong move in the opposite direction. And if the price has been rising, and the layers have just been hit with a massive back order, are they going to be in any mood to take the price back up again and risk getting walloped for a second time?
That said, much of what you see in the markets is smoke and mirrors. Someone might send the market one direction in order to scare people into exiting their trades, creating liquidity, and then send the market in the opposite direction.
Personally, I'd react to the market, and cut my losses and let my profits run, rather than predicting it...
Jeff
IMHO, it's impossible to predict what will happen.
There's a school of thought that says a big spike will cause everyone who was following a trend to head for the door, which could cause a strong move in the opposite direction. And if the price has been rising, and the layers have just been hit with a massive back order, are they going to be in any mood to take the price back up again and risk getting walloped for a second time?
That said, much of what you see in the markets is smoke and mirrors. Someone might send the market one direction in order to scare people into exiting their trades, creating liquidity, and then send the market in the opposite direction.
Personally, I'd react to the market, and cut my losses and let my profits run, rather than predicting it...
Jeff
Very often big jumps in price revert back towards their previous trend. But not always. I tend to carry on with what I was doing if it jumps away from me. But will change tack if I think somebody is backing or laying it consistantly. I don't think there is really a universal rule.
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JollyGreen
- Posts: 2047
- Joined: Sat Mar 21, 2009 10:06 am
Just to add some more info to what Ruler said. You have to be aware of the time remaining before the race starts. If there is only a short time left i.e. 30 seconds or less and a big order hits the market there may be insufficient time for the price to revert back towards it previous level.
not always J sometimes it can be so obvious where the price or what the puters are thinkingFerru123 wrote:
IMHO, it's impossible to predict what will happen.
The best way, the next trade maybe a bigger swing.Ferru123 wrote:
Personally, I'd react to the market, and cut my losses and let my profits run, rather than predicting it...
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BennyBlanco
- Posts: 42
- Joined: Tue Jan 05, 2010 7:35 pm
Alpha322, stevequal, Ferrur123, Euler & JollyGreen;
Many thanks to you all for spending the time today and making your comments.
Alpha322 - Agree regarding the use of stop loss. I use this for sure with a swing trade, but perhaps will adopt his more when scalping - I'll try it out over the next week or so. Point taken on drowning!
stevequal - Thank you for your take on such a scenario, which is something that I have not thought/realised before. Certainly 'food for thought' on what exactly is going on in the market.
Ferru123 - Agree. I certainly find it difficult to read at times!
Euler - "I tend to carry on with what I was doing if it jumps away from me." Are you saying here that you may take the decision to hold, unless it is clear it is off in the opposite direction?
JollyGreen - Appreciate that. Only leaves the one option I guess.
Many thanks again all. I may well have future questions (if it is okay?) to start a thread and ask you all! I feel I am really starting to make progress and getting a feel on the pre-off horse racing markets.
I certainly enjoyed the swing at the last race of the day at Chepstow!
Many thanks to you all for spending the time today and making your comments.
Alpha322 - Agree regarding the use of stop loss. I use this for sure with a swing trade, but perhaps will adopt his more when scalping - I'll try it out over the next week or so. Point taken on drowning!
stevequal - Thank you for your take on such a scenario, which is something that I have not thought/realised before. Certainly 'food for thought' on what exactly is going on in the market.
Ferru123 - Agree. I certainly find it difficult to read at times!
Euler - "I tend to carry on with what I was doing if it jumps away from me." Are you saying here that you may take the decision to hold, unless it is clear it is off in the opposite direction?
JollyGreen - Appreciate that. Only leaves the one option I guess.
Many thanks again all. I may well have future questions (if it is okay?) to start a thread and ask you all! I feel I am really starting to make progress and getting a feel on the pre-off horse racing markets.
I certainly enjoyed the swing at the last race of the day at Chepstow!