NexusFi: Find Your Edge


Home Menu

 





Question about very large, rapid whipsaw movement


Discussion in Commodities

Updated
      Top Posters
    1. looks_one mwtzzz with 5 posts (7 thanks)
    2. looks_two bulge with 4 posts (1 thanks)
    3. looks_3 PK 1 with 3 posts (3 thanks)
    4. looks_4 DavidHP with 2 posts (2 thanks)
      Best Posters
    1. looks_one mwtzzz with 1.4 thanks per post
    2. looks_two PK 1 with 1 thanks per post
    3. looks_3 DavidHP with 1 thanks per post
    4. looks_4 bulge with 0.3 thanks per post
    1. trending_up 3,476 views
    2. thumb_up 14 thanks given
    3. group 7 followers
    1. forum 19 posts
    2. attach_file 1 attachments




 
Search this Thread

Question about very large, rapid whipsaw movement

(login for full post details)
  #1 (permalink)
mwtzzz
Sunnyvale, CA
 
Posts: 171 since Dec 2012
Thanks Given: 8
Thanks Received: 107

Once in a while in gold (gc) or oil (cl) you'll see a very large, almost instantaneous movement of twenty or thirty ticks in one direction, followed by an equally large and rapid movement in the opposite direction. This isn't the normal trading movement. What is the reason for this?

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
ISO Equity Curve Indicator
NinjaTrader
NT7 Indicator Script Troubleshooting - Camarilla Pivots
NinjaTrader
Request for MACD with option to use different MAs for fa …
NinjaTrader
Volume profile TradeStation
EasyLanguage Programming
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Tao te Trade: way of the WLD
30 thanks
GFIs1 1 DAX trade per day journal
28 thanks
Supertradersams Thread Journal on NQ/MNQ
27 thanks
Just another trading journal: PA, Wyckoff & Trends
12 thanks
Deaddogs Stock Trading
11 thanks

(login for full post details)
  #3 (permalink)
 
xplorer's Avatar
 xplorer 
London UK
Site Moderator
 
Experience: Beginner
Platform: CQG
Broker: S5
Trading: Futures
Posts: 5,902 since Sep 2015
Thanks Given: 15,363
Thanks Received: 15,177



mwtzzz View Post
Once in a while in gold (gc) or oil (cl) you'll see a very large, almost instantaneous movement of twenty or thirty ticks in one direction, followed by an equally large and rapid movement in the opposite direction. This isn't the normal trading movement. What is the reason for this?

I happened to see one such event today on CL - my take for the almost instantaneous snapbacks is that they are algo-driven. Just some HFT programs, perhaps trying to profit from some temporary order imbalance.

Reply With Quote
(login for full post details)
  #4 (permalink)
 SpeculatorSeth   is a Vendor
 
Posts: 780 since Apr 2016
Thanks Given: 22
Thanks Received: 1,018

The volatility creates a volatility vacuum in it's wake causing price to come back on itself. The initial move could be anything. News or just some big trader wanting to make a splash.

If you are certain about the direction you can wait to see reloading at one price when it comes back and catch an after she goes trade.

Reply With Quote
(login for full post details)
  #5 (permalink)
 
PK 1's Avatar
 PK 1 
Kassel / Germany
 
Experience: None
Platform: MC
Broker: IB
Trading: CL/NG/ES
Posts: 72 since Aug 2011
Thanks Given: 128
Thanks Received: 62


xplorer View Post
I happened to see one such event today on CL

what time was it? Can't see it from my side or do you mean the 15min lasting $1 move?

I wonder whether the well positioned trap-orders outside the normal ranges could lead to such spikes. Orders one can see often in options and without limit people get caught there (but shouldn't be in case of futures)

Reply With Quote
The following user says Thank You to PK 1 for this post:
(login for full post details)
  #6 (permalink)
 
xplorer's Avatar
 xplorer 
London UK
Site Moderator
 
Experience: Beginner
Platform: CQG
Broker: S5
Trading: Futures
Posts: 5,902 since Sep 2015
Thanks Given: 15,363
Thanks Received: 15,177


PK 1 View Post
what time was it? Can't see it from my side or do you mean the 15min lasting $1 move?

I wonder whether the well positioned trap-orders outside the normal ranges could lead to such spikes. Orders one can see often in options and without limit people get caught there (but shouldn't be in case of futures)

It happened at 12:09:20 GMT, for about 10 ticks. It spiked down from about 63.31 to 63.27 and then back up to 63.37 one second later.

Reply With Quote
The following user says Thank You to xplorer for this post:
(login for full post details)
  #7 (permalink)
 
PK 1's Avatar
 PK 1 
Kassel / Germany
 
Experience: None
Platform: MC
Broker: IB
Trading: CL/NG/ES
Posts: 72 since Aug 2011
Thanks Given: 128
Thanks Received: 62


xplorer View Post
It happened at 12:09:20 GMT, for about 10 ticks. It spiked down from about 63.31 to 63.27 and then back up to 63.37 one second later.

Ok, this seems to be your case. Checking similar patterns today the volume is causing the bigger move related to the surrounding moves.


Reply With Quote
The following user says Thank You to PK 1 for this post:
(login for full post details)
  #8 (permalink)
mwtzzz
Sunnyvale, CA
 
Posts: 171 since Dec 2012
Thanks Given: 8
Thanks Received: 107


xplorer View Post
It happened at 12:09:20 GMT, for about 10 ticks. It spiked down from about 63.31 to 63.27 and then back up to 63.37 one second later.

Sorry, but that's not the kind of event I'm talking about. I'm talking about where the price goes about 20 ticks in one direction within a matter of a second or two. Then comes immediately back in as short a time.

Reply With Quote
(login for full post details)
  #9 (permalink)
 
PK 1's Avatar
 PK 1 
Kassel / Germany
 
Experience: None
Platform: MC
Broker: IB
Trading: CL/NG/ES
Posts: 72 since Aug 2011
Thanks Given: 128
Thanks Received: 62


mwtzzz View Post
Sorry, but that's not the kind of event I'm talking about. I'm talking about where the price goes about 20 ticks in one direction within a matter of a second or two. Then comes immediately back in as short a time.

there can be sooo many reasons. Sometimes an action at the market can cause a spike which changes to a continuation towards the spike and in other cases stays a spike. Some CFD and MT4/5 Brokers liked to catch SL causing a spike only to be seen inside their pool. Also such trap-orders (how I call this / see above) could cause a spike. In a very liquid market there can be lots of transactions within a second causing the outcome of a spike. The example above gives you an idea how bigger volume (compared to the time before and after) can cause a short and strong reaction, sometimes resulting in a spike, sometimes continuation, sometimes stalling, ... Maybe not the best example of a spike but there are similar cases which indeed look like a spike.

Reply With Quote
The following user says Thank You to PK 1 for this post:
(login for full post details)
  #10 (permalink)
 
SteveJewels's Avatar
 SteveJewels 
Dayton, OH USA
 
Experience: Intermediate
Platform: TradeStation
Broker: TradeStation
Trading: MES
Posts: 38 since Sep 2017
Thanks Given: 10
Thanks Received: 11


Take a look at the volume for that candle compared to the volume of the candles before and after.

1 minute candles on GC run a few hundred to a few thousand during the day. Once in a while there is a candle that is a few dollars from high to low and the volume in 5,000 or more.

Someone threw in a large buy or sell order.

Reply With Quote





Last Updated on June 27, 2018


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts