liquidity overturn on e-mini nasdaq futures

against late buyers in undervalued nasdaq 100 futures. here i have set up more advanced times and sales setting which i was testing for a couple of days or weeks.

sierra chart provides a good interface for times and sales and hopefully somewhere in the future i will provide a more in-depth description of what i observe on the tape

exit after seller´s eruption

htf smart selling activity

today on dow jones futures - hft algo as a response to offered liquidity. they tested the stability and hit the quoting bid.

i could not trade this situation because it didn't fit into my risk management. i waited for the price to make a little pullback up so that i could jump in, but it didnt.. and it continued downward

here is the chart

i suppose these selling guys are smart, because they first tested if the offered liquidity is real, and when it appeared as true, they hit the waiting limit with a bigger sell market afterward - this "liquidity test" activity is useful for a subject that needs to open a bigger size and - and the same - doesn't want to move with price (zero  slippage).

imagine, if you want to open a big sell position quickly (let's say 200 contracts), the best thing to do is to hit a big waiting limit on one level. but first, you need to be sure that the quoting limit is real, that it is real, not fake liquidity that will disappear when you pull the trigger.

so first, before you send a big market order, you send a "probe", a couple of small market orders to see, what will happen. if the quoting limits still stay there after being matched with your probes, it is REAL - the liquidity is there, waiting. if they disappear, it is NOT real and you should not open the bigger sell into it.

this is a technique of a subject that (1) wants to open a bigger size and (2) has a similar risk like me - because it is very precise when it comes to entry price, i can assume that the position will be liquidated in a very short time (just like mine)

here is how the footprint chart looks like in this area. an interesting thing to notion is that the falling market goes against deep buyers. this is a good orderflow context for short