Anticipating Market Orders – Be Ahead Of The Game

Anticipating market orders is a key skill of any futures trader, especially a treasury trader. The concept is extremely simple—yet it’s something most traders don’t think about nearly enough, especially during those moments when they want something to happen and nothing is happening.

Some experienced traders may find this idea obvious. Many newer traders don’t fully grasp it yet. And plenty of experienced traders forget it at exactly the wrong time.

I go much deeper into this topic in my course material, but a straightforward explanation here will help clarify the idea.

Why Price Moves (or Doesn’t)

Imagine you and I are the only two participants in a market.

• I’m working a limit bid at 5
• You’re working a limit offer at 6

If we both sit there and refuse to move our prices, nothing happens. For price to change, someone has to act aggressively.

Either:

• I use a market order to buy at 6, or
• You use a market order to sell at 5

That’s it. That’s how markets move.

A sustained directional move happens because traders keep using market orders—buying higher or selling lower—over and over again.

The Only Question That Matters

If I decide to buy at 6, I only get paid if someone else is willing to buy at 7, 8, and 9.

So before hitting that offer, I need to ask:

• How likely is it that market orders will keep buying higher prices?
• Who is going to hit the next price?

That question—more than indicators, patterns, or opinions—is what trading boils down to.

When Anticipation Makes Sense

If activity is fast and aggressive—

if trades are flying through the tape—

if volume is heavy and price is ripping to new highs—

then it’s reasonable to assume more market orders will continue lifting offers.

People are chasing. Shorts are panicking. Momentum feeds on itself.

In that environment, taking a long trade makes sense—not because price is already high, but because you’re anticipating continued aggression.

When It Doesn’t

Now flip the context.

Price hasn’t moved in thirty minutes.

A couple of trades print at the high of the day.

The pace is painfully slow.

It’s obvious very few participants are involved.

In that scenario, why would market orders suddenly start attacking higher prices?

They probably won’t.

More often than not, what happens next is the opposite:

buyers dry up, patience runs out, and eventually sell orders begin hitting bids.

In that context, taking a long trade makes no sense. If anything, a short makes more sense—but often the best decision is to do nothing.

Why “Waiting for Confirmation” Fails

During active periods, traders often want confirmation before acting.

That doesn’t work.

By the time confirmation appears, the trade is usually gone.

If you see a breakout you’ve seen many times before—and you know statistically that market orders tend to continue hitting higher prices in that scenario—you have to act as the breakout is occurring, not after it’s finished.

If you wait, you become the person buying the high of the day.

Everyone else bought earlier because they were anticipating you buying higher—and when you finally do, they sell to you.

The Simple Pre-Trade Checklist

Before executing any trade, ask yourself:

• Given the current pace and context, how likely is it that market orders will continue driving price in this direction over the next few minutes?

If it looks like you’re the only person interested—and it’s obvious that participation is thin—step away.

Otherwise, you’ll spend your day hitting the worst prices and asking the same frustrating question traders have asked forever:

“Why does it always move when I’m not in—and never move when I am?”

Here are some additional articles about futures traders and order flow you will enjoy:

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Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight.

In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

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