Using Iceberg Orders and DOM Pressure Pattern In Day Trading

You can find iceberg orders and DOM pressure functionality in mzBigTrade indicator.

Iceberg Orders

An iceberg order is a special limit order. The main size of an iceberg order is not shown in the order book. You will never know the size of the hidden part of the iceberg order, without analyzing algorithm running in real-time.
Fortunately, mzBigTrade indicator includes such searching algorithms.

Significant iceberg orders normally are exposed on reversals of local trends.
A SELL trade may trigger BUY iceberg orders.

Iceberg orders are shown with fuchsia contour.

DOM Pressure

We use the DOM pressure term to describe the behavior of liquidity on the way of a market order.

Any trade, you see in mzBigTrade indicator, is the result of matching market order, with a limit order, resting in the order book or DOM (Depth Of Market). This matching occurs at the best Bid or Ask prices, depending on the direction of the order, sell or buy.

DOM pressure can be negative or positive. Positive DOM pressure means adding the liquidity on the best Bid or Ask price right after matching. Negative DOM pressure means removing the liquidity on the best Bid or Ask price right after matching.

Positive DOM pressure always occurs at the opposite side of the order and is a resistance to the trend.

DOM pressure is shown as a triangle. Note, that expensive level 2 data, are not required for the indicator.

Example In The Video

Download .XML chart template, click Save As: MZpack – Order Flow Reversal Clusters

In this particular case, we can see a huge group of sell orders with buy iceberg orders, along with dom pressure. We call this a Reversal Order Flow Cluster.

The next occurred reversal order flow cluster is a smaller one. It contains fewer sell iceberg orders and dom pressure volumes. The price broke the level of the cluster and did test the second cluster. This could be your buy entry point, with the stop-loss order just below the first reversal cluster.

Use Reversal Order Flow Cluster pattern in conjunction with other MZpack indicators for better results.

Further Recommendations

Always look at the big picture first. Then drill down to the order flow and market microstructure.