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Open Feature request MC-2157

Identification of Block Trades by Institutional Traders

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Description

Several companies are now advertising indicators or platforms that allow the amateur trader to identify the "Block Trades" of institutional traders.

Block Trades in futures may be 50-500+ futures contracts, and with stocks it may be 1000 to 10,000+ shares.

Identifying these institutional orders helps traders prevent suicide by accidentally betting against "the Big Boys." If I see 500 ES short contracts placed as a block at $2,250.00, then I know that someone who is very rich and probably very smart is betting that the market will be going down, or else he is about to MAKE it go down as he unloads his war chest on the market. At a minimum, identifying these trades allows me to see that this line in the sand will be extremely important to watch going forward.

The feature request is for an indicator to add a mark to the chart (main or subchart) when a trade size larger than X is triggered, and on which side of market that trade came from. X would be customizable based on the trader's preference and instrument chosen. The long and short colors should be customizable as well.

RESOURCES

This is from NOFT-Traders:

"Thanks to Order Flow Sequence Tracking, you can see these big positions as they're assumed in the form of blocked trades. Simply put, blocked trades are flagged when positions are taken with multiple contracts over a preset threshold. In the ES chart here, the blocked trade setting is at 500 - for buyers and sellers. When the threshold is broken, the tick/price level is marked on both the buy and sell side respectively. If you're looking to avoid getting steamrolled, this perspective is an absolute must - especially when monitoring a market swing.

NOFT

"Pro poker players will tell you that poker is a 'long grinding game of patience and attrition'. It's because of this tedious waiting for a hand that's in your favor that professional players only bet 20 percent of the hands they're dealt. Think about that - 80 percent of the time they're simply watching - but when they go, they go big.

"Understanding that the same logic applies to an institutional trader's strategy - then you'll really want to know when they decide to make their move. Flagging big moves when they're made will put you on alert that there's something afoot at the table of the market - and that you should be ready to move.

"Looking at our same ES example, it's no coincidence that after a block move to sell at a particular price level, price turned around and went the other direction. Monitoring blocked trades at pricing extremes can key you in on high-probability reversals.

"At the same time, blocked trades that follow the direction of a trend - in the middle of a bar/candle - are excellent indications that the institutional traders are interested in driving a continuation.

"Don't let the big moves slide right under your nose. Bring blocked trades directly to your chart and keep your eyes peeled when they take place. Make sure that you have the right setting so as not to be distracted by moves that aren't really that big for your market.

"When they take place - extend the price levels on your chart and keep an eye out for price to revisit that same level. When it does, be prepared to make your move. Keep an eye out for price to revisit these levels with regularity and be patient with your exit.

Comments (1)
#1
user-offline.png  sstheo (sstheo)
Dec 21, 2016 - 14:09

It appears that the graphic didn't show. Here I will try again.noft

Here is the link directly on MS OneDrive: https://1drv.ms/i/s!AgoEErW-ln5buXUhbJJA4UbitDa_

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