Wednesday, August 17, 2011

Trading Plan: Level 2 trading works great on Eurex Futures (FGBL and FESX)

Its easy to tell if the stocks will rise if the move is confirmed by
falling bond prices, however in the following screenshot the opposite is
the case (stocks will no rise as the bonds are already on an upmove):




Have a look at the FESX chart there where 4000+ contracts asked for at the 2190 level at 8 am and finally market reached that level after 9 am (so 1 hour in the future I was able to tell when the up move will start). If there is a fast up move you can also tell when this move will end just by looking at the level 2 bid ask ratio, as usually there are more contracts offered at the bid than on the ask side (above current price) when there is a down move.






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