Understanding Liquidity and Market Pullbacks

NexusFi · 2018-08-11T10:18:14-04:00

I hear what you saying, but it is easy to accept that the aggressor at the bid is the seller, they initiated the move for what ever reason verses a limit at the bid that is waiting for the market to come to them. And sitting sell orders below the bid must turn into market orders before the are filled. As it was explained to me, this is how the futures market works. What price do you get if you use a sell market order? You typically get the bid, you want to sell aggressively right now. When you make a trading …

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Updated August 11, 2018

Understanding Liquidity and Market Pullbacks

August 11th, 2018, 10:18 AM	#41 (permalink)
Fugitive69 Austin, TX Elite Member Experience: Intermediate Platform: NT8 Trading: EU, SP, Crude CL Posts: 90 since Jul 2018 Thanks Given: 33 Thanks Received: 105	Awesome explanation of Liquidity by Dionysius - Thank You. Making the assuming that market movers are on a hunting expedition - hunting liquidity - it would be a great help to filter out data that is distracting - or in other words prevents me from concentrating on liquidity. Tools such as Jigsaw and other similar software platforms do provide a glimpse into liquidity. But as mentioned above they do not display "invisible data" - hidden orders, HFT programs, or the intentions of a big market mover to suddenly make a play seemingly out of nowhere. And, of course, there is fake liquidity that appears to exist for a little while only to vanish before your very eyes. On one hand it seems a noteworthy goal to filter out any distractions that keep me from examining liquidity. Yet on the other hand I cannot examine "invisible data" - information I can neither evaluate nor predict. So if my goal is to eliminate "noise", I better first derive a very exacting definition of the meaning of the term "noise". And that is one overwhelming proposition.