It is common knowledge that high frequency, institutional, and market making algorithms account for a large portion of the daily volume in many equities, futures, and forex markets. I understand that there are many different algos at work in these markets everyday that have many different functions...
When I first started day trading in 2010, I focused on crude oil, gold, e-mini S&P's, and Euro FX futures across 4 different timeframes for each market. After a while of "time in the chair", I began to notice some repetitive patterns and movements the markets would make in certain scenarios and the different types of order flow that would come in during these times. Some would trigger at a certain moving average, a Fibonacci ratio, high or low of day etc. Most of them seemed to have the objective of trying to trap other traders with false breakouts and stop runs.
I am curious if anyone has written or has knowledge on these institutional short term algos. Are they based on charts, order flow, time of day, or some other criteria? What are their rules and conditions? Is there anything else about them to be aware of?
I am looking to broaden my trading knowledge and improve some of the algorithms that I am working on. Thanks.
