Day traders' after-market lounge August 25

Originally posted by buddi: ↑

Hi @Jnnl hope you are doing well mate.

I was intending to ask this question in the weekend thread, but since you brought it up, I might as well ask now. Not specifically cornering you btw, anyone else here who has an opinion please do share if you are willing to.

If you see a strong PA and an excellent chart and rise, would a strong broker data sway you one way or another? I'm interested in what you meant by smoke and mirrors.

1) If you see one or two brokers accumulating heavily and retail selling out, do you see this as a positive?
2) If you see lots of churn but there is no one clear buyer (especially) or seller, do you see this as a negative?
3) Or, simply ignore #1 and #2, and don't care about broker data and just follow PA?

Here is a scenario that I noticed recently in IOU, which kind of falls into #2 above

View attachment 3517574

When the first breakout happened (first arrow on the 3rd Aug), the PA was mental with 2-3mil orders pushing the bid side up and up clearing lines. But the broker data wasn't strong...looked as couple of instos taking big positions and distributing one or two pips above.

View attachment 3517586

Out of 40mil volume churned, the largest net buy volume was only 1.3mil by CS. And you can see that UBS, Barclays, 3P all were churning volume for a pip or two. I initially thought that these guys are setting the book up for further runs, but the subsequent rises (the other two blue arrows on the chart) on the 13th and 19th Aug also followed similar pattern.

If I remember the PA of all these three days, they cleaned up couple of bid lines, put a large 2-3mil bid as a prop/sometimes even take half or even full hit on that prop, and re-load sells to distribute. Is this what you meant by ..."very 'pronounced' in their approach to ensure SP doesn't slide but at the same time ensuring they don't blow it up and get a haircut".

I totally understand that none of this is out of the ordinary, and run of the mill stuff for brokers that you've seen time and time before. I'm just interested on whether traders in this forum care about broker data in making their decisions or not.

BTW, for any newbies like me, here is a link that would help you map broker data with retail/instos.

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hey mate all good.

I don't rely too much on broker data for my trading. Folks like @bossivic are more into this realm.

Netherless, see below for my personal views:

"If you see a strong PA and an excellent chart and rise, would a strong broker data sway you one way or another?"
Yep chart and PA is above all for me. Broker data is a bonus not a must

"I'm interested in what you meant by smoke and mirrors.
With the smoke and mirrors reference, its mainly due to
1) The notion that the data can somewhat be manipulated as their is a 2 day delay on data. Countless times (especially the spikes) retailers are buying off smart money. Then you got those with a reputation like CS buying and selling in quick succession as noted in the FNT debacle last week.
2) Non-retail brokers and their clients get it wrong too.

1) If you see one or two brokers accumulating heavily and retail selling out, do you see this as a positive?
Yes, but wouldn't weigh heavily on my decision making to hold/buy if chart looks poor. Brokers get it wrong too. However i do give credence to stocks where there a fewer parties dominant in the broker data as it may indicate they may have more control to push the price up.

2) If you see lots of churn but there is no one clear buyer (especially) or seller, do you see this as a negative?
Personally no, but would be great to see some strong conviction from some non retail brokers and fewer parties to show someone is in control of the SP and PA.

3) Or, simply ignore #1 and #2, and don't care about broker data and just follow PA?" If chart and PA is superb, and its for a day trade then broker data becomes less relevant imo. ST-MT might be more relevant depending which brokers are involved.

"Here is a scenario that I noticed recently in IOU, which kind of falls into #2 aboveWhen the first breakout happened (first arrow on the 3rd Aug), the PA was mental with 2-3mil orders pushing the bid side up and up clearing lines. But the broker data wasn't strong...looked as couple of instos taking big positions and distributing one or two pips above.Out of 40mil volume churned, the largest net buy volume was only 1.3mil by CS. And you can see that UBS, Barclays, 3P all were churning volume for a pip or two. I initially thought that these guys are setting the book up for further runs, but the subsequent rises (the other two blue arrows on the chart) on the 13th and 19th Aug also followed similar pattern.

Data over last 2 weeks shows overal stronger non-retail selling . However if it breaks out above 29.5 then im in for the trade regardless. It did give the breakout a shot on Friday as expected but unfortunately no demand so fell back. Will sitback and continue to watch what it does next.

If I remember the PA of all these three days, they cleaned up couple of bid lines, put a large 2-3mil bid as a prop/sometimes even take half or even full hit on that prop, and re-load sells to distribute. Is this what you meant by ..."very 'pronounced' in their approach to ensure SP doesn't slide but at the same time ensuring they don't blow it up and get a haircut".

By pronounced i meant that those large orders down the low to high 9s likely weren't standard fake props we are use to seeing as price hasnt reached their target yet, but were used to stall selling and absorb loose shares before pushing up further. Rationale is that a fair few got some chunky sells into it and buying was reloaded then price continued to rise (key point) which is a good sign at that point (in the 9s).

Hope it makes sense