“Leaning” bids and offers – how the pros really trade
This is one of the setups that professional day traders look for on a daily basis.
“Slant” is a term used by day traders. Refers to leaning on a bid or offer. In other words, if the market ranges between 5 and 10 and 9 bid/offer 10 is currently trading, traders who are short the 8 and 9 are banking on the 10s. They hope the offer will stand. If it looks like it’s going to work, they’ll try to buy 10 as they leave. Other traders are also looking to buy the 10s because they know the shorts are “leaning” on them. This means that 10 will probably be a good place to get an advantage. However, it is also a place where big traders are making moves.
A trader can be long 8s and be the bid at 10. When he gets a high bid at 9, he raises his bid at 10, then turns around and bids at 10 (this is called a reversal) and this causes other traders to immediately buy at 11 and 12. Virtually no contracts trade at 10. In this situation, shorts are up. They wanted to risk 1 or 2 ticks, and now they are forced to cover a loss of 4 or 5 ticks. Other people who didn’t get a chance for the 10s will buy the 12s and 13s. That’s why you need to anticipate. If you think it will work, just buy the 10s. If you don’t get them, you don’t want to buy 14s. 14 is where the person who flipped will sell. Miss it, miss it.
By the way, most of the time these spots are not support or resistance levels on the chart. There is no technical reason for anyone to buy or sell there. You will never know that traders are relying on price unless you know how to read the order flow. And if you don’t know that traders rely on price, you can’t take advantage of this setup.
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