In this video, we’ll look at the new market balance indicator on the pace of tape gauge. The pace of tape gauge us a very easy way to view the pace of trade across a number of markets. At the bottom we can see the Dow, Nasdaq, S&P500 and Russell 2000. So at a glance we can see if the markets are all experiencing highs and lows of volume at the same time which gives us a feel for how likely any moves will follow through.
We have now added market balance to the Pace of Tape meter, so not only can you tell if traders are coming into your market at the same time but also – if they have the same opinion too.
The needle on the gauge here shows us the pace of the tape and the new inner section shows balance of trade. Blue for an imbalance to the buy side and red for an imbalance to the sell side.
A lot of the time there will be no or little imbalance but sometimes as here you will see there is one. This is most significant when it’s happening across related markets.
Now this will seem a little strange – but remember we do test these things out ourselves before releasing. If we look at the settings – the default lookback for the balance is longer than the lookback for the needle. There’s a few reasons like that. The needle on the pace of tape is right here right now. So it’s much shorter.
With the volume, we want to see if the current volume is one sided but also if that imbalance is enough to overcome arlier trading too. This longer period smooths things out a bit so you don’t end up jumping at minor moves.
Anyway – try with these settings first, we thing you’ll find they work well together.