In today's electronic markets where over 70% of all transactions are executed by automated
trading bots its quite helpful to know what these automated trading bots are up to in
real time.
Welcome to your daily S&P 500 'Follow The Bots' market recap sponsored by sceeto.
I'm Carl Weiss, the chief algorithmic architect here at sceeto and it is my hope that we can
help you trade with the bots…and not against them.
Today is Thursday January 24th and you are looking at a 4 tick range bar chart in the
forward e-mini S&P 500 futures contract.
Now after yesterday's doldrums volatitlity picked up nicely today.
We're going to show you some setups that we have been highlighting over the last couple
of weeks and they are the same setups that you have seen before and will see again in
the future and what I think is really cool about that
trader's want consistent setups.
Traders want the same behavior over and over again.
And what we try to do here at sceeto is give you the toolsets to peer under the hood of
the market and see what's going on in order flow and bot behavior.
And I believe that order flow and bot behavior is the primary determinant of price changes
so if you get comfortable you know,reading the tape, becoming a modern day tape reader,
being a twenty first century tape reader you will see the same setups over and over again
you will see the same changes in terms of supply and demand imbalances and ongoing future
price discovery and I think that this can be a really good approach and healthy approach
for a trader so let's just wee what happened today.
Here we have our ever loving spikes in MacDaddy you'll see a green spike and a price move
and two red spikes and nice price moves there.
Here we have trading bot footprints and other order flow insights surfaced by our Order
Flow Monitor that can be used by a trader to deduce whether the Buy Bots or the Sell
bots have dominance in the market.
This is important information as 70 percent of all trading is done by automated algorithmic
trading bots.
Since these trading bots are the primary determinants of supply and demand and since changes in
supply and demand are the primary determinants in changes in price, it behooves the 21st
century trader to be able to discern how to follow these bots.
In this screen shot we have insights surfaced by sceetos Tape Meter...you can see that when
either a blue or yellow dot is plotted below price then it is a good time to consider buying
and when either a blue or yellow dot is plotted above price it is a good time to consider
selling.
This is a view of just price in the upper pane and in the lower pane we have a white
line which is retail MacDaddy or retail order flow momentum and we also have in the lower
pane a green and red line which is institutional order flow.
I think that if you have been following some of our videos we know as a rule of thumb in
an uptrend we want to see retail below institutional and in a down trend we want to see retail
above institutional.
The reason for that is in a downtrend if retail is above institutional it means that they
are more bullish and why be bullish in a downtrend.
Conversely in an uptrend we want to see retail below institutional which means that retail
is more bearish.
Our philosophy is that retail tends to be wrong and we want to trade against retail
and this is how we do it.
Now we had two distinct uptrends in the market today.
Here and here.
And during these uptrends there are plenty of times when retail crosses below institutional.
That means retail is getting bearish even though price is moving up and that is probably
a good time to buy.
You can see that here and again here and again here and again later in the day and here.
Now in a downtrend.
We have two distinct down trends.
Here and here.
But in this primary downtrend we retail move above institutional here which is a great
place to get short and here which is a great place to get short and here which is a great
place to get short.
Now this view is a standard sceeto chart template.
It may appear to have a lot of information its got retail versus institutional macdaddy
in the lower pane.
Wind above that.
MacDaddy abov that.
Also with ellipses encirling spikes in MacDaddy.
And above that in the price pane we have tape meter and order flow monitor.
And it may appear to be a lot of information but I think that once you understand each
component and how to lay that up with price and your trade entries and then combine these
you will have a tremendous amount of contextual information with which to help your trading
along to follow the bots you follow the primary order flow which is going to be the primary
determinant in changes price so I hope that this tutorial helped out.
Thanks for stopping by.
sceeto's advanced algorithmic monitoring data can be surfaced in real time in
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register for a free trial at www.sceeto.com