DislikedAfter a while you will notice that many brokers shade their spreads in the direction of the current momentum, specially if you are watching more than one feed, shades are an obvious and visual tell.Ignored
I remember fti complained his broker was shading him but I never understood what it meant and did not have the chance to ask.
What does shading the spread mean?
My guess: if bid is at 1.0001 and offer at 1.0002 (just an example) and I hit offer my order is slipped and filled at 1.0003, I asume momentum is on the buy side and the offer of 1.0002 is already consumed by the time I hit.
In other words I assume price simply responds to the distribution of supply and demand but "shading" implies choice / manouvering is made by the broker, may be something "shady" is at hand. How, what and why please. Not arguing any point, just want some education.
I have read fti posts regarding market maker maintaining his poise in the direction of trend and make market for retrace, duck sweeps and rubber band snap backs in the direction of daily trend, and darkstar / other threads on order flow etc. Each time I think I understand something comes up to present doubts and question marks.
Edit: does shade means the broker consumes the offer of 1.0002 for his own Book to build up his inventory because momentum is on the buy side, if yes, then may be I understand after all.
Regards,
Baifu
Happy Year of the Rabbit!