It is correct to assume (and base a strategy on) the ES is primarily institution driven and retailers have no real influence on it? Institutions are purpose driven, focused; they trade based on their statistically backed, AI backed, quantum based, etc... edges which allow them to profit. They simply don't care about you, your trades, your stops, your retail based focus. Retail traders are simply noise. Sure they will consume the liquidity you provide as that's part of their master plan. But the bottom line is when price moves it is because of them, their plans, their focus, their manipulations.

Thoughts?

If you expand the conversation from ES to 'The US Equity Complex in total" and Institutions to include companies like Citadel rather than just the Banks and Money Managers, then I personally would agree with most of your statements.

tulanch 

It is correct to assume (and base a strategy on) the ES is primarily institution driven and retailers have no real influence on it? Institutions are purpose driven, focused; they trade based on their statistically backed, AI backed, quantum based, etc... edges which allow them to profit. They simply don't care about you, your trades, your stops, your retail based focus. Retail traders are simply noise. Sure they will consume the liquidity you provide as that's part of their master plan. But the bottom line is when price moves it is because of them, their plans, their focus, their manipulations. Thoughts?

On a macro level yeah it makes sense that the users will multi billions to trillions in assets move the market compared to the day trader with 5-500k in their account. On the smaller timeframe I the smaller players have more of a seat at the table and are seen as the liquidity facilitators.

Does price move only because of larger players? No, but if they want in or out, then dont stand in front of them else you’ll get run over.

“they trade based on their statistically backed, AI backed, quantum based, etc... edges which allow them to profit.”
Well I see it more as one of two things, one their end customers want in/out and they are just facilitating it and piggy backing off that information - or 2 their trading desks have a proprietary method that are trying to find an edge.

But the sheer vast of hedge funds out there and profitable ones show that AUM doesnt mean the best success, So do I care what the big players are doing? Of course. Do I feel like retailers don’t mean anything in terms of influencing the market? Unless its a major coordination then I agree a few retailers wont have much influence, but I am also agnostic as I’m day trading to make a profit not exact influence

I’m a price action scalper. I think it’s fair to say the most difficult read is TnS, then the DOM, followed by charts. I also believe in the Keep It Stupid Simple (KISS) approach. But, charts are an “arbitrary” view of price action; 1 tic, 5 min, 2 point range, 1000 total volume, 2000 trade volume, etc... Of all of these chart types, I believe trade volume is the easiest to use and most in alignment with in-the-moment price action because the trade volume chart type is based on trades. As in all trading, nothing works all the time but there are interesting observations with charts based on this chart type. Take for example when the DOM is jiggy at a price. Bam, bam, bam, the market hits a price the market simply won’t exceed. The tails/wicks on a trade volume bars many times illustrates and aligns with (more so than any other chart type) this DOM price action. Another observation is when price accelerates on these chart types, trade volume bars many times close on their extreme (close on high/close on low). This is why I raised my question about big guys, because in these instances it sure seems to reason it is not retailers, more so it’s the big guys moving the market. These “markers” if you will, are waypoints to where the big guys are playing. It is also interesting seeing how these align with volume profile, high volume nodes, displayed (using displayed bars) on these chart types. There is definitely an edge trading with the big guys, if only they would tell us where and when.

tulanch 

"the ES is primarily institution driven and retailers have no real influence on it?"

I would say yes. ES is the hedging vehicle for SPX options which is the go-to facility for all institutions worldwide to manage their equity exposure. SPX market makers hedge using ES. Of course, speculators and large funds can trade it outright directionally, but it is largely a hedging vehicle. Among all of this is the retail trader, who is probably about 5-10% of all volume, maybe, and thus has no major influence on it.

tulanch 

"They simply don't care about you, your trades, your stops, your retail based focus."

I'd agree with that. However, markets move to facilitate trade and find liquidity. No doubt retail liquidity overlaps with institutional liquidity at times. I would guess that some of the market making programs are coded with "retail behavior" in mind, because while it may not move markets, the market makers are playing for a tick or two average, and on slow days it certainly seems to go where a retail trader hides.

In short, I wouldn't worry about the distinction too much, especially labeling retail "dumb money" and institutions "smart money." Often you observe huge volume hit into a level, bids hold, market reverses hard. This isn't retail selling to big entities. This is big entities transacting with each other. Which one would you "side" with? Don't worry about categorizing it too much. Just ask yourself which auction/rotation/trend is the one you want to be on, and go with it. Just my opinion.

There sure seems to be something about using volume bars based on trades.

Thinking about it, why is there any significance to time in trading? Logically it does not seem to be a factor other than a easy target for someone with a purpose of eating others stops.

I keep thinking about an auction where say a car is sold. There is an overall "session" but the bids come in when they come in.

In some respects that's akin to what volume bars, based on trades, illustrate. I'm sure we all have seen WTF bars. Imagine what this price action looks like on different charts. Where do these actions come from and why? It could just be the old bean trader saying time to sell. Who knows, better yet who cares? Just learn to take the appropriate action when the market shows/tells you what's up.

This then leads to credence that a "shaved" bar (no tail no wick on trade based volume bars) illustrates the intention of the involved. Which in turn leads to more credence in the common price action patterns on this chart, such as 2nd entries, failed 2nd entries, LH, HL, and 2-legged pull backs. These become even more interesting on this chart when using the EMA 9,21 and 200, Volume Profiles, SnR lines, Trend Lines, Trend Channel Lines, and MACD for "guidance". These indicators/studies do not provide a signal, rather they provide guidance and reenforce good judgement, setting up an anticipated decision. Interestingly these anticipated decision, key entry points seem to be recurring. Oh and never forget common sense money management, scalp to fund your runners.

The most important aspect of it all is Market Context.

You must see it and feel it for yourself. Listen to the little voice that is currently reading this post.

Amazing this is nothing new, nothing special, nothing magical.

Never stop learning, never stop investigating.

I fine tune and solidify "my plan" with the purpose to build confidence in it.

You don't like this, that's fine, cause it's mine, so be it and think what you want to think.

I find this stuff utterly fascinating.