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Author Topic: My Aha! moment trading  (Read 98 times)
Mr_Akbar (OP)
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July 23, 2019, 01:51:08 AM
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Have you ever had that moment of clarity when everything just kinda of... clicks?
When all the pieces of the puzzle fall into place and for the first time you step back and... "get it."

Moments like that are rare, but can be incredibly valuable - especially in trading.

I remember having that feeling watching the depth chart.

It's easy to understand the depth chart on paper. It's just a visual representation of the order book - the open buy and sell orders.
The chart is live, so as traders place orders (or have second thoughts and remove them) it changes.

But it shows so much more than that...

My aha moment was when it finally clicked how the depth chart moves as people start getting emotional (aka FOMO)

Watching buy orders trickle up, slowly at first...
I can almost hear them think, "I can't let the price go up without me!"

After the first few traders move a little bit, others start to catch on.

All of a sudden the traders are climbing over each other just to get to their orders filled.
A few get impatient, and start slamming market buys.

Now price starts moving up, and the FOMO really sets in.

More market buys, more people moving up their orders... Now some big buy orders are getting placed, followed by lots more excitement.
Sellers start moving their orders thinking they can get a higher price, the buyers keep chomping up the sell orders that don't get removed in time.

Now price is really flying! 🚀

It's during all that excitement that the first few traders will start to take profit...
...a few big sells scattered among the tsunami of buys.

Few traders take notice and move their sell orders down, slowly at first...
I can almost hear them think, "I can’t let price drop with me in it!"

And so the whole cycle repeats itself, just this time in the other direction.
Back and forth it goes, as predictable as it is chaotic.


Have you ever had an aha moment?

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