Topic 4: Iceberg Orders (The Introduction)

Summary of Key Concepts

What Are Iceberg Orders

• Large orders that don't show their true size
• Example: A trader buys 200 lots but shows only 20 at a time
• When first 20 lots fill, next 20 open immediately
• Used by institutions to hide their market activities
• Also used by retail traders (e.g., 6 lots shown as 1)

How to Detect Icebergs

• Must look at the order book (bid/ask)
• When you buy the offer but it keeps refreshing the quantity without breaking the level = iceberg
• Icebergs holding market up or down are usually at psychological levels
• Volume continues to refresh at certain amounts

What Happens When Icebergs Are Exhausted

• If icebergs are finally out → market can break out very quickly in that direction
• An iceberg can serve as a form of ABSORPTION (price absorbed by traders)
• An iceberg might stop a pullback BUT most likely won't stop a TREND
• With a trend: aggressive participants come in and take out levels

Relevance Assessment

• Icebergs in the middle of a range may be irrelevant (could be hedge trades)
• Icebergs at key levels (support/resistance, psychological numbers) = significant
• Finding iceberg orders is "overrated" — too common to add trading value alone
• The traded volume from filled icebergs WILL show up in the order flow chart
• The only way to see what institutional traders are doing = watch Order Flow

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Key Takeaway for Bot

• Don't try to detect icebergs directly — focus on the RESULT (filled volume in footprint)
• When large volume appears at a level that keeps refreshing = institutional absorption
• This shows up as big contract numbers on the footprint = what our gold bot reads