Lesson 3 of 5 · Dark Pools
Levels from dark pool volume
Clusters become levels.
When a large fraction of a day's volume prints in a tight price range on a dark venue, institutions collectively decided that range was fair value. Those prices become reference points. Price often reacts when it returns to a heavy-volume cluster.
Price reacting to dark pool levels.
Two levels labeled DARK POOL PRINT 1.2M and DARK POOL PRINT 0.9M mark where large size transacted. Notice how price interacts with each level on revisits. The levels act like informal support and resistance.
The reaction on the revisit is the test.
A price holding at a dark pool cluster on revisit is more informative than the original print. A price slicing through it with no pause suggests the institutions who traded there have already moved on. Watch the candles at the level, not just the level itself.
A ticker shows 3.2M shares in dark pool prints over three days, clustered between $54 and $55. What is useful about that level?
Show the answer
C. It is a reference level to watch when price revisits it. Institutions traded heavily at that range, making it a meaningful reference. The reaction on the revisit tells you more than the original prints did.