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Trade Strategies: Price Ladder Trading with a Disguised Large Order

DAX 21 January 2019

A large order can provide a clear place to enter a trade as a front run – selling in front of a large offer for example. The principle of the trade being that if the large order and offer can’t get filled at the price it’s resting at, it may have to move lower and drive selling as traders attempt to get short ahead of the large order. For this reason the person trying to get the large order filled may attempt to disguise the full size of the order showing only smaller parts once one part has been filled so as not create an urgency to sell ahead of the order.

In this example a trader shows an offer of 100 lots – significant size for a market that rarely has more than 20 lots on any bid or offer – when it gets filled selling continues but the order doesn’t come back immediately, implying that the downwards pressure from that order is not longer there, however as price moves lower another order of approx 100 lot comes back at the same price, this is an attempt to disguise the total amount to be sold by waiting to replace the order so as not to show too much urgency to sell.

We join this AXIA debrief after the first 100 lot has been filled at 11150 and the DAX trades back to it and fills it once again before it comes back on the offer; the willingness to keep selling 50 should elicit further selling, however a failure to do so and inability to trade through the low after 500 lots has been sold becomes a warning sign and a potential trade. The initial short as well as the reversal are covered during this debrief.

Large order exercises are covered in module 8 of the Axia Price Ladder Course where more drills and exercises enable you enhance your edge in these trade types.

If you are looking to develop a career as a trader within a professional and successful environment then the Axia Futures 8 week Intensive Trader ​Training is the most comprehensive in the industry based​ ​upon​ ​skill​ ​development​ ​within​ ​the​ ​proprietary​ ​futures​ ​trading​ ​environment. 

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