How to Trade With Bookmap: a Detailed Step-By-Step Guide
In addition to its basic features and innovative ways of visualizing the market, Bookmap has a lot of other capabilities. All of these can really make a trader’s life easier.
This is the guide that explains the fundamentals of Bookmap – a trading platform which provides you with the most transparent way to view the market.
The article consists of four parts:
1. What do you get with Bookmap?
First off, what is Bookmap? It’s a trading software that visualizes liquidity (the order book) in an easy to understand manner. You can see data, which was previously unseen: the evolution of the order book, every order on the market, in addition to algo activity. It opens a lot of new ways to see patterns and make profits in trading
With Bookmap, you can:
- Debrief your trading sessions with replay mode. It allows you to constantly improve your skills, learning from your failures and successes
- Trade futures, stocks, and crypto
- Use our proprietary indicators, like Iceberg & Large Lot tracker, Imbalance in order Book, etc
- Learn from our educational materials on order flow trading
- Connect to Bookmap educator partners and study how they use Bookmap
2. Setting up Bookmap
Note: Skip this section if you have already installed Bookmap.
Before you start, here are some important notes:
- After signing up, you will get to a page with your login and password. Also, you will receive an email with instructions
- Bookmap is not a data provider or broker, which means you will have to connect to one first. You can choose from the list of connectivity partners on our site
- If you just want to check out Bookmap functions, you can use the free Digital package
- If you’re interested in crypto, you can start with the Digital or Digital Plus packages
- If you’re interested in futures or US stocks, subscribe to a Global or Global Plus package. Go to the packages page
- If you wish to get data for futures, Bookmap supports many providers, however, we recommend Rithmic, OmniFeed or dxFeed as only they support full, in-depth data
- If you desire a US equities market depth data feed, we recommend OmniFeed or dxFeed
Here are the four steps to get you up and running:
- Install Bookmap. Here is the link to the latest production version. For a complete tour through the platform interface, visit Bookmap Knowledge Base.
- Copy your license key from the Get Started tab in your user portal on the Bookmap site or from the email you were sent when subscribing. Launch Bookmap, insert the license key.
- Every time that you open Bookmap, you see the run mode window. You have a choice of 3 run modes – simulation, trading and replay. However,when you open Bookmap for the first time, you can only choose the simulation mode.
- Simulation mode allows you to send orders via the internal Bookmap simulator while viewing real-time data transmitted from your data vendor or exchange.
- Trading mode allows you to send orders via your broker/exchange while viewing real-time data transmitted from you broker/exchange.
- Replay mode allows you to replay market depth data files that you previously recorded.
- After launching Bookmap, click on “Connections⟶Configure” in the upper menu bar. Add all the connection you need, enter your data provider credentials, click “OK.” Click “Connections” again and choose the data providers you want to connect. After that, click on “Add Button” and pick a symbol you want to subscribe to. That’s all, you are ready to work with Bookmap. If you need a more detailed explanation of how to connect to data feeds, watch the video below.
3. Features explanation
How does Bookmap differ from other trading platforms? Mainly it’s because of its three key features:
- Heatmap — See Market Depth or passive orders at all price levels. This allows you to see the distribution of liquidity in the market, spot algo activity and therefore find better entries & exits.
- 3D Volume Bubbles — clearly see the volume traded and aggressor side on the chart.
- Historical best bid/ask.
You can see them in the picture below. Yes, it looks scary at first glance, but when you get into it — it becomes simple and insightful.
If we turn these elements off, we will see only a candlestick chart. The problem? It is aggregated data for a certain period. We can’t see what’s going on inside a candle. It’s a black box inside which could be anything.
However, if we turn on historical best bid & offer, you could notice a difference. You see what really occurred with the price between two candles. This info is crucial for you as a trader because it helps you make better-informed decisions.
Still, a lot of data is missing. Why? Because we don’t have the volume in a candlestick chart. If we turn on the volume bubbles, we can see where that volume is transacting. Also, we can feel the buying and selling pressure on this market.
We see how bulls show interest and change the direction of the market. These are important areas to understand, and the candlestick chart is completely lacking in it. It’s better to leave candles where they should be – in the XIX century.
Watch the following video, to see how Bookmap displays the data. We can zoom in on this little cluster, so we can look at micro-second levels. We can see the market events that happened in millions and billions of seconds.
Now you know how historical best & offer and Volume Bubbles work, so we can move on to the third key Bookmap element – Heatmap. It visualizes DOM, adding a third dimension to trading charts.
A Depth of Market (DOM) is the auction where traders put orders on different price levels. In Bookmap, you can see it on the right menu – COB (Current Order Book). The numbers on the COB column are contracts. In the «green» zone there’s the auction on the bid, and in the «red» zone — auction on the offer.
Actually, the DOM is great. You can see and understand where larger levels of liquidity or lack of liquidity is present. The problem with a DOM is that these numbers are constantly changing. You have to memorize it and ask yourself a lot of questions. How well was their behavior? Did they add liquidity? Did they pull liquidity? How much? What about the areas around it? Did they add higher liquidity? Or did they step back and provide liquidity at lower levels?
You will have to answer all of these questions. It’s pretty tedious to answer all that in the DOM, and then remember it over a long period of time. It’s probably better to assign this job to the machine and then skim the margins.
Bookmap is made right for that. We turned DOM data into the Heatmap. If you look at the Heatmap, found to the left of COB, you will note painted areas of high liquidity. When the numbers change, the Heatmap changes, and you can understand the behavior of traders.
Take a look at the striations in 6966 level. You can see the adding and pooling of liquidity. Also, you can understand the level, looking at the color scale of Heatmap. When it’s darkly colored, there’s very little liquidity. When it’s blue or white, there’s more of it. Orange is a level of high liquidity.
If you zoom out, you can see longer-term liquidity. So you don’t have to memorize it. Simply note it, and see if they stay in the book later on. You then see everything right in front of you.
We can also start determining the intent of traders in that auction. Did they stay in the book? Did they pool? Did they actually trade? This offers tremendous insight into understanding the intent of larger players providing liquidity. Observing Market Makers is an underrated free lunch, and now you can have it too.
A lot of traders say that they don’t look at liquidity, because there’s a lot of fake liquidity. Actually, there are. But in the picture below, you can see a good example of it not being fake. This, for example, is real liquidity. There are 743 contracts here, and they stayed in the book and traded. This is a fact.
Understanding the Heatmap is not really so hard. By watching the next video, in just 8 minutes you will get information on how Heatmap helps to differentiate between real and fake liquidity.
The Heatmap opens up a whole new world of opportunities in trading. You can watch the dynamics of market liquidity, spot patterns of exhaustion/absorption, track icebergs and algo, detect order book flipping, and many more. You could learn how to do it with the help of the educational materials we listed in the last section.
Conclusion: if Bookmap was a bit smarter, it could have found life on Mars. However, we decided to leave that job to Elon Musk. Instead, we concentrated on creating the most advanced and convenient trading software. Have we succeeded or not? Download the trading platform to check it.
Install Bookmap if you haven’t done so already. If you want to try it out first, there’s a free version with free data for crypto from 20 data providers and dxFeed delayed data for stocks. However, we recommend using Bookmap Global Plus to fully experience Bookmap’s advantages.
When you are ready to start trading with Bookmap, we encourage educating yourself in parallel. We have divided educational materials into stages to ease the onboarding process.
1) Watch the first part of the Bookmap educational course.
In this video, you will learn the basics of reading and using market microstructure in trading.
2) Study an article written by our CTO, which meticulously explains how to use the Heatmap in trading. Must read: http://bit.ly/2HPT8mT
3) Read the interview with our CEO, where he talks about Bookmap’s story and explains its key features: http://bit.ly/2rtRkX9
For those who have already learned the basics of Bookmap:
4) How Bookmap helps traders answer five “WHY?” questions they often ask themselves. Read the article: http://bit.ly/2Fjog8U
5) Why visualization is important in trading, and how the Heatmap helps with it: http://bit.ly/2IoI7cx
6) Take a crash course in risk-management trading. Read: http://bit.ly/2wJJfCR
7) Explore the list of recommended books on trading: http://bit.ly/2vslzSJ
8) We have held a joint webinar with one of the most renowned futures traders in the world – FT71. It is a must-watch one!
Go through a series of webinars held by experienced traders.
See the complete list of webinars here.
For advanced Bookmap Users:
Where to follow:
Trading Depth project – interviews with traders to read:
#1 Trading Depth Interview: Walter Lesicar, the Trade-To-Win Trader
#2 Trading Depth Interview: Luis Recabarren, a Fighter, a Ballet Dancer, and a Private Equity Manager
#3 Trading Depth Interview: Bret Bossenberry, Futures, Options, and Stock Trader
#4 Trading Depth Interview: Jason Ramus, Futures, Stocks, and Options Trader & Analyst
#5 Trading Depth Interview: BitScalp Takes Us on a Journey of Trading Bitcoin, Since the Darknet
#6 Trading Depth Interview: Jason from the OTG Giving a Number 1 Advice for Traders
#7 Trading Depth Interview: Del the Trader Talks Day Trading Stocks and Active Traders Community
#8 Trading Depth Interview: Riding the Order Flow in Indian Markets
#9 Trading Depth Interview: Koning Karel Applies Mixed Strategy to Digital Currencies
#10 Trading Depth Interview: FuturesTrader71 — A Tale of A Calm Mastermind (FT71)
#11 Trading Depth Interview: Ryan Mallory — Watching Stocks Fly Like SpaceX
#12 Trading Depth Interview: Carlos Martinez and Deep Diving in Futures
#13 Trading Depth Interview: Joseph Gasperoni, Small Cap Stocks, and a Family Business
#14 Trading Depth Interview: Matt Davio — Hitting Moneyball Before It Was Cool
#15 Trading Depth Interview: Madaz Money — Off The Charts!
#16 Trading Depth Interview: Andre Nastasi – From Real Estate to Day Trading
#17 Trading Depth Interview: Yagub Rahimov, Working Hard toward Miracle
#18 Trading Depth Interview: Longshortorflat: Decoding the Markets
#19 Trading Depth Interview: Peter Becker Demystifies Trading Stereotypes
#20 Trading Depth Interview: How Frank Pollack Came for Lessons and Stayed with Bookmap
Selected playlists to watch:
You’ve learned about the most fundamental features of Bookmap and got a list of links to study. But remember that practice is the best teacher, so don’t hesitate to start. We’d appreciate it if you share on Trustpilot your thoughts about Bookmap after using it for some time.
We wish you a most profitable life, trader.