Time & Sales… Really?
Are you seriously staring at a Time & Sales window?
That is absolutely archaic!
Why in the world would you want to stare at a bunch of numbers whizzing by your eyeballs at sometimes lightning pace- somehow trying to ‘remember’ how much size was traded, whether it was on the bid or the offer, and then stringing that all together to recount how much total size is getting hit at certain prices?
There’s no need to be Rain Man over here!
There are tools that will do that for you- that is ‘read the tape’ or ‘read order flow’ whatever you refer to it as. We can do it, and do it well.
I suggest two tools for you. The first is a basic indicator called Cumulative Delta, and the second is called a “Footprint Chart.”
Cumulative Delta
It’s nothing more than a cumulative, running tally of how much volume for the session has been done at the Ask, minus how much volume has been done at the Bid. Most traders are visual people. So instead of keeping mental track of that those numbers whizzing by and adding them up…. let the damn computer show you a graphical representation of that exact same mathematical buying/selling pressure.
Are you also against using a CALCULATOR too?
Bonus points if you want cumulative delta and pay attention to the price chart above it. This will now take it a step further and allow you to see things like, “Oh, there’s been five-thousand contracts slammed into the bid here, and we aren’t dropping 34.25. Important to note! And easier to note with the nice little graph showing us this, rather than out there Rain Man’ing it.
A Footprint Chart
Another great tool that evaporates the need to stare at a T&S window.
This one is, in my mind, more granular than cumulative delta. It’s going to show you precise numbers but in the format of a chart. You can set your ‘bar’ to be any periodicity you like to fit your needs. The difference is that this bar (say a 1minute bar, or a 16tick range bar) has two columns, and a row for every price it traded. The left column is all the volume that’s done at each price level into the bid, and the right column is all the volume at each price level that was into the offer. Here’s what a simple one I use looks like:
Volume into bids on left, offers on right.
So you are probably already saying, “ohhhhhh, nice” If you’re a T&S user this is a game changer. How much volume has just slammed into a bid in the past 30 seconds? Lost count? Yeah, me too. Here it is for you calculated by a computer for your viewing pleasure.
Ditch the Time & Sales Window guys…