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"Bank Flow" Trading - Resources?

  • Post #1
  • Quote
  • First Post: Mar 3, 2008 2:46am Mar 3, 2008 2:46am
Reading some trading commentary, I saw reports of where major bids, offers, or stops were "seen". How does the writer "see" these orders? Is this information likely coming from somebody who works at a major bank? More importantly, is there a source available to smaller traders that would report, on an ongoing basis, this data?

It seems as though knowledge of the placement of major market-moving orders would give a significant edge to a trader. Does anyone here use this data in their trading strategies?

Thanks to all who reply. The discussions I've had so far with members here have proven truly invaluable.
drummer: You will need to be trading on a platform that offers Level II exchange data, i.e "open interest". This shows the volume of currency that can be ordered at a particular (set of) market price on the exchange. Darkstar's 4th post ilustrates nicely here:

http://www.forexfactory.com/showthread.php?t=7484



So far I have not found an easy way to get this sort of data without being registered with an ECN with a live account. Others will surely correct me. And while you guys are at it, is there any way to demo the Tradestation platform? I've been dying to make the move for ages.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
Quoting Plutonite
drummer: You will need to be trading on a platform that offers Level II exchange data, i.e "open interest". This shows the volume of currency that can be ordered at a particular (set of) market price on the exchange. Darkstar's 4th post ilustrates nicely here:

http://www.forexfactory.com/showthread.php?t=7484



So far I have not found an easy way to get this sort of data without being registered with an ECN with a live account. Others will surely correct me. And while you guys are at it, is there any way to demo the Tradestation platform? I've been dying to make the move for ages.
You can try it free for one month, and if you arent satisfied, they will refund the monthly fee ($99) they charge for the use of their platform.
Quoting Plutonite
drummer: You will need to be trading on a platform that offers Level II exchange data, i.e "open interest".

Right. I have access to MBT's Level II data, but it typically does not show any large orders far away from the current price. On stock/futures exchanges, such Level II data seems to be more reliable due to the centralized nature. I guess what I'm really asking boils down to:

What is the best place to get Level II data about the Big Boys' (hedge funds, etc) pending limits and stops?

Or is there no chance that a trader with an account under $10k could get access to such data, in which case it would be best to simply follow the type of market commentary I mentioned in my first post?
Quoting drummer486
Right. I have access to MBT's Level II data, but it typically does not show any large orders far away from the current price. On stock/futures exchanges, such Level II data seems to be more reliable due to the centralized nature. I guess what I'm really asking boils down to:

What is the best place to get Level II data about the Big Boys' (hedge funds, etc) pending limits and stops?

Or is there no chance that a trader with an account under $10k could get access to such data, in which case it would be best to simply follow the type of market commentary I mentioned in my first post?

Drummer,

It doesn't matter how big your account is - you will not get the info beyond the ECN level2 data on the surface....and even those do not accurately display where the bulk of orders are.

ECN users have the ability to "hide" part of their order size through iceberg orders or hide orders completely from other market participants. (If I was a bank/fund/similar and had a chunk to place in the market, I would not want others to know where that is because of price protection)

Some market participants can see the flows better than others (like the big institutions, some large brokers and funds) but the entire market depth is goes far beyond what anyone can really see.

What is helpful though on occasions, is to know when the bigger option expiries are happening.

regards
daytrading
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  • Post #6
  • Quote
  • Edited 11:42am Mar 3, 2008 11:02am | Edited 11:42am
Quoting Plutonite



So far I have not found an easy way to get this sort of data without being registered with an ECN with a live account. Others will surely correct me. And while you guys are at it, is there any way to demo the Tradestation platform? I've been dying to make the move for ages.
TradeStation is coming out with a demo in the very near future. It's in beta testing now. TS is a great platform but learning and exploring all its functions with real money is a bit unsettling.










.
unfortunately, i doubt anyone knows how we can get our hands on bank order flow (unless fti can help us out here?).

i use the CME level 2, thats as good as it gets as far as i know
Relax and be happy.
Quoting billflet
TS is a great platform but learning and exploring all its functions with real money is a bit unsettling.
dont let that stop you man! TS is the real deal, well worth the risk of practicing with real money. just keep it small and you will be fine. btw, the learning curve for TS is VERY steep, dont get frusterated just take your time and it will all start to make sense. once you learn the platform you will wonder how you ever traded without it!
Relax and be happy.
Quoting merlin
dont let that stop you man! TS is the real deal, well worth the risk of practicing with real money. just keep it small and you will be fine. btw, the learning curve for TS is VERY steep, dont get frusterated just take your time and it will all start to make sense. once you learn the platform you will wonder how you ever traded without it!
Yeah, I've been using TS for a couple months now. I made a couple execution goofs early on, but I'm getting comfortable now. I'm definitely happy I made the move. Someone else referred to my move as a "flight to quality."

Thanks for the encouragement.
Quoting merlin
unfortunately, i doubt anyone knows how we can get our hands on bank order flow (unless fti can help us out here?).

i use the CME level 2, thats as good as it gets as far as i know
I know a guy who uses Dustin Pass' service for trading with bank order flow. I guess Dustin has some contacts at some big institutions or banks that move a lot of cash... my buddy is actually profitable with it last time I checked. I think that Dustin is actually managing some of his money...
Mr. Trend
Quoting merlin
dont let that stop you man! TS is the real deal, well worth the risk of practicing with real money. just keep it small and you will be fine. btw, the learning curve for TS is VERY steep, dont get frusterated just take your time and it will all start to make sense. once you learn the platform you will wonder how you ever traded without it!
How is their forex automated execution? I used them about three years ago... love the platform.
Mr. Trend
Quoting Mr Trend
How is their forex automated execution? I used them about three years ago... love the platform.
i cant comment here, ive never been brave enough to use auto execution. i will follow a system with the best of em, but i need to be there to pull the trigger

if you end up trying this out definetely let us know how it goes!
Relax and be happy.
Quoting merlin
unfortunately, i doubt anyone knows how we can get our hands on bank order flow (unless fti can help us out here?).

i use the CME level 2, thats as good as it gets as far as i know
Hi merlin et al,
Just found your mail, sorry had been busy on task lately.
Have been well, thank you. Hope you are too.

About the order book, I am quite sure that it is not interbank flow, unless they are walking thru walls (china walls) in banks. As good as cracking open the money box.

No sir, I do not believe it is possible. Probably something else.

regards
Thanks for the insight, fti. As an aside, reading your historical posts (in conjunction with Darkstar's, SeekingLight's, etc) has been a fascinating endeavor. You all clearly have market experience much greater than mine. I really appreciate that you take the time to post on this board... I hope it takes the edge off of trader's boredom

So it's clear that this is most likely NOT actual "bank order flow" data (china walls would not be breached just for free news postings ). Is it likely that the market commentary is simply written by experienced traders who can make educated guesses where market participants placed their stops/limits?

Do you think that looking for large orders on CME Level II as Merlin suggested would prove beneficial for traders? Or would large orders likely be iceberg or VWAP anyway, and thus invisible to the general market?

It seems like the most reliable way might be to simply predict the placement of large orders based upon past placement. But then again, that's just Technical Analysis, isn't it

Thanks for your input.
Quoting fti
About the order book, I am quite sure that it is not interbank flow, unless they are walking thru walls (china walls) in banks.
well fti, you were my only hope

thanks for responding though!
Relax and be happy.
And there is always the case where the big guys show orders to influence the market the opposite direction you might surmise from Level II or so called bank order flow.
yeah for sure...the first thing you have to learn when trading the level2 info (in any market) is that the executed orders are much more important than the resting orders. 90% of these resting orders come from gamers and automated systems.
Relax and be happy.
Quoting merlin
yeah for sure...the first thing you have to learn when trading the level2 info (in any market) is that the executed orders are much more important than the resting orders. 90% of these resting orders come from gamers and automated systems.
Hesitantly green question here (haven't slept in a while so bear with me):

What are "executed" orders? Executed as in already done/filled?
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
Quoting Plutonite
Hesitantly green question here (haven't slept in a while so bear with me):

What are "executed" orders? Executed as in already done/filled?
yeah
  • Post #20
  • Quote
  • Edited 3:09am Mar 20, 2008 1:58am | Edited 3:09am
Quoting mbqb11
yeah
Thanks mike!
Now that I've slept a little I'm trying to figure out why merlin said executed orders provide insight. If you can see where the previous large orders were (and presumably trade in their direction), how does this help in knowing where the next ones will be, particularly since this isn't at interbank level? I guess my question really boils down to "how do you safely use the level II data to make decisions". I never use order flow and am pretty much a retail broker kinda guy. I'm pretty sure you aren't though, Mike, so feel free to add your 2 cents (you slimy stop hunter you)
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
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