"Leaning" on Bids and Offers – How Pros Really Trade

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This is one of the setups which professional day traders look for on a daily basis.

Leaning

“Leaning” is a term used by day traders. It refers to leaning on a bid or offer. In other words, if the market has been ranging between 5 and 10 and it’s currently trading 9 bid / offer 10, traders who are short at 8 and 9 are leaning on the 10s. They are hoping that offer will hold. If it looks like it’s going to go, they will try to buy 10s as they are leaving. Other traders are also looking to buy 10s because they know shorts are “leaning” on them. This means 10 will probably be a good spot to get the edge. However, this is also a spot where big traders make moves.

A trader might be long 8s and be the offer at 10. When it gets heavy bid at 9, he lifts his offer at 10, then turns around and bids 10 (this is called flipping) and this causes other traders to instantly buy at 11 and 12. Virtually no contracts trade at 10. In this situation, the shorts are up the creek. They were looking to risk 1 or 2 ticks and now they are forced to cover for a 4 or 5 tick loss. Other people who had no shot at 10s are going to buy 12s and 13s. This is why you must anticipate. If you think it’s going to go, just buy the 10s. If you don’t get them, you don’t want to be buying 14s. 14 is where the guy who flipped is going to be selling. If you miss it, you miss it.

By the way, most of the time these spots are not support or resistance levels on a chart. There is no technical reason for someone to buy or sell there. You would never know traders are leaning on the price unless you know how to read the order flow. And if you don’t know traders are leaning on a price, you cannot take advantage of that setup.

Johh Grady