Indicator for seeing when "they" come in

[EasyRantisi]

The top gainers of the day typically have multiple players in there that are using algorithm trading (hedgefunds) to run up the price/short squeeze (if it that kind of play). Usually, at the top of a play, you see a big exchange happen where the longs are exiting their position. Bids/Asks Firm up and become really thick, then when the exchange of $ is done the play becomes liquid again and the fade happens. Has anyone successfully written a script to indicate when the buyer in the tape or that algo has exited the play or has stopped pushing up the move? Some sort of price action indicator? Thanks

 

[Tidan]

I find higher timeframe standard deviation to be quite accurate for this. Being that price action only has less than .3% chance of staying above a 3rd deviation, it's often a good place to short even if the price continues up for a bit.
I've had success in predicting price action to the penny using this method.

 

[zeek]

There are several ways to see this "exchange" you talk about,

- On the tape, look for big blocks being sold on the bid. On the way up during the squeeze, you will typically not see those transactions but once the buyers turns into sellers, you will see large blocks 10k, 20k, 50k etc sold on the bid. That´s a good sign of buyers drying up and sellers stepping in. I recommend having two time&sale windows open for each ticker, one that shows all of the prints and then you have another where you filter out only the large size orders for example min 10k

- When the exchange happens, you will also typically see a type of "shelf" forming at the top where price bounces back and forth within a smaller tight range and that´s where "big hands" are getting out of their long postions and flip to short, this takes time because of how much volume needs to change hands so that´s why you will see these shelfs forming just before a down reversal.

- If you have access to orderflow tools, you can analyse the transacted volume at each level and see if buyers are more aggressive on the offers or if sellers are hitting the bids harder. There are some buy vs sell volume indicators on this site you can use to see this in realtime. I recommend looking at Welkins Advanced Volume indicator which has a lot of useful tools.

- Like Tidan said above, looking at higher timeframes also helps to get a better idea of where buyers are exhausting and sellers taking over

 

[drasp]

volume, learn how to read it. It is the biggest tell.
I'd recommend a book called master the markets by Tom Williams.