Hubert Senters here.
Question I get all the time is how important is this matrix tool or a lot of platforms call it dome which stands for depth of market? Back in the 90s it used to be way more useful than it is now a days. So I’ll put a stock appear. Let’s just go AMZN, Amazon and it’ll link to the same thing and you would have. We can’t do that. That’s not going to work for you there. Hold on just a second.
So I’m just going to use the bond market here. So as you can see there are bids on this side and there are assets on this side. So I like that there’s a lot of games that are played with this. And when I trade gold in the evening lots of time I am the gold market. If I’m using more than say 10 contracts I can push the gold market around a little bit combine.
And I’m like ‘’oh, my goodness, how I’m going to sell it too, there’s nobody else sitting here bidding the high side because it’s a little thin’’ So there are a lot of games that can be played in this. I don’t recommend that you pay attention to it because there’s a lot of shenanigans that’s played and then the stock.
Now, back in the 90s you used to be able to do what’s called shadow the acts like you could figure out who was on the bidding the high side and if it was Merrill or Goldman Sachs and with size you’d always try to stay on the side of the big boy orders. You can’t really do that anymore because everything’s traded in pennies per share and the stock market is really hard to do so.
Unless you’re either just really micro scalping equities or unless you’re a high frequency trading firm I wouldn’t pay attention to it too much. What I would pay attention to is not what. This is an implied I want to buy and this is an implied I want to sell it. It doesn’t mean that’s actually what they’re going to do. They can put a fill or kill order in there. They can do an iceberg order. They could do partial orders. They can say ‘’hey, I want to sell 200 when it gets there back away from the order.’’
So it’s not so much important what they’re implying they want to do. The most important thing is what actually goes through the cash register and that tool is called time and sales. We can cover that tomorrow.
Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
