The SFE-SPI200 futures market is dominated by algorithmic trading systems.
The ability to recognise algorithmic activity is an essential skill for retail SPI200 traders.
During slow periods of intermitent activity, where the market maker simulates action with offset orders, filling the order book with spoof (tease) orders, a retail trader can execute an order, get filled, and 30 seconds later find themselves 8 points under water. In these modern electronic times the need for "small" retail traders to learn the art of tape-reading has increased, not decreased. It's essential.
The skill is the recognition of the market-maker on both sides of the order-book. Before the electronic market, "locals" performed the function of market-makers. They've been replaced by a single computer system which can populate, de-populate and re-populate the order book in a nano-second. Re-arranging the order-book instantly.
The lone-trader must be able to detect when the market-maker is the sole occupant of both sides of the order book ("market depth"). During this time the market-maker will know when they have filled a lone-wanderer, immediately withdrawing 10 levels from the order-book, pulling the rug out from underneath the lone-trader, testing their resolve.
If we were developing an electronic-algorithmic trading system, that's how it would be done.
See the screenshot below. We would know the total depth. We would know how many were ours.
If someone bought one off us at the front of the ask queue, we would pull our buy orders out, and sell 1 lot, 10 levels down, to see if the buyer had a stop entered.