Using Time and Sales Display to Improve Your Decisions

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Video Transcript:

Hello, traders and welcome to the NinjaTrader tutorial and the fifth module, Time and Sales. In this lesson, I’m going to teach you how to properly color code the time and sales window so you get accurate information for you to make the best trading decisions with it.

Changing colours on Time and Sales Display

Okay, right here, we have the same time and sales crude oil November contracts window with the SuperDOM, of course, and the chart. What we’re going to do is we are going to right click on the time and sales windows and we’re going to click on properties. This will prompt out the time and sales property windows, which we are going to work on right now. Now, the first thing we are going to color code is when a trade hits the bid or hits the ask. Okay?

I’m going to try to explain to you the difference between hitting the bid and hitting the ask. Okay, so, the difference is that, for instance, on the SuperDOM, you can see the orders are placed on the bid side of the market and the orders are placed on the ask side of the market. On the time and sales, you are going to see that the orders that hit the bid and hit the ask. Normally, when an order hits the bid, it’s a sell order, okay? Or when a trader hits the ask, it’s a buy order. Why? Because when these orders get filled, it’s because someone else is buying it and when these orders get filled, it’s because someone else is selling it.

Okay, so, now that we get this, we need to color code, correctly, the ask and bid hits because we want to have a visual representation, just like the one I have right here, of where the momentum or where the volume is going. So, the first thing we’re going to do is we’re going to go to at ask fore color. The fore color is the color of the numbers and letters and we are going to color it blue. Why? Some people might get confused and ask me, why would you color the ask side of the time and sales blue, if it’s the sales side? Well, I color it blue because, as you can see right here, all those trades are hitting the ask, are hitting the sales side, and they are hitting it because they are buyers that are buying these sales orders right here. So, we’re going to color it blue because when it hits the ask or the sell side of the market, it’s a buy momentum.

And the next one is the bid fore color, which we are going to color it red. Why? Because when orders get filled on this side, it’s because traders have hit it at the bid or are trying to sell and strip these buyers out of the market. You can see in these examples that all the colors from 50-89 trade were blue because they were hitting these orders right here, these sale orders right here.

Now, another important thing that we need to color code is above the ask color and below the bid color. Why? Because what we just color coded here are passive orders, okay? They are passive orders because these orders are laying here, at these levels, waiting for them to get filled. When an order gets filled above the ask, it’s because someone is aggressively buying. When an order gets filled below the bid, it’s because there’s someone that is aggressively selling. So, we are going to color code the back of the time and sales. I have color coded right here. Can you see this? This is exactly what I was talking about. These orders were a hit below the bid and these black orders were hit above the ask. So, you can see that we have both aggressive sellers and aggressive buyers.

Now, I have color coded above the ask as black and below the bid as red. You can do it the way you want but this is the way I have done it. And, of course, the third color coding that you need to do is the daily high and the daily low because, for instance, if a price starts to rally or if crude starts to rally and goes above the 51-40, you need to know it if you are just looking at the time and sales and you will know it because it will color the back of the time and sales green, if we are hitting new daily highs, or red if we are hitting new daily lows. Well, I’m going to change the red because I have too many things that are red. I think I’m going to choose an orange for new daily lows because, honestly, I have too many reds going on and it can be very confusing.

But this is how you color code it and, of course, you can choose to have more than 65 rows. I have 65 rows because I like my time and sales to take the entire screen but if you like a smaller time and sales, you can do it too. Now, this is another thing that is important. Block trade alert. I have a block trade alert for 100 contracts. And it’s important to know when a block trade is happening because a block trade involves a significantly large number of shares, bonds or, in this case, crude oil contracts being traded at an arranged price between parties outside of the open market. This means that the block trade will not be featured on the ladder, because it is arranged between the parties and it is not settled in the open market. So, you have to have that alert on, because it will not appear in the ladder, but it will appear on the time and sales.

So, this is basically how you color code it and how you know that you have it right and how you can know, with the time and sales, where momentum is actually hidden.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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