Best Free Dark Pool Data
Finding Free Dark Pool Data
Any additional data that a trader has at their disposal can prove to be greatly beneficial, and free dark pool data is no different. But before we can figure out how to get dark pool data for free, we first need to know what dark pool data is.
What is Dark Pool Data?
There are vast amounts of trades that occur on a daily basis that the general public does not have access to, some estimate that the number is as high as 40% of all trades.
The reason that these trades are not available to the general public is because they are made through private exchanges. The name "Dark Pool," comes from the lack of transparency of these trades.
Disregarding any other factors, this information might be incredibly useful to traders simply because of the large quantity of trades that they make up, and how much they influence the market otherwise.
However, many believe that these trades might involve those that would benefit from manipulating the market, such as banks, or institutional investors who might have access to additional information and experience.
The latter can be referred to as, "smart money." This is another reason why dark pool data could prove to be beneficial. If the smart money is placing trades, then seeing and understanding them could allow a person to better predict the market and mitigate risk.
Where to Find Free Dark Pool Data
As of June 02, 2014, the Financial Industry Regulatory Authority (FINRA), started making dark pool information available to the general investing public for free.
All this information can be found on FINRA's website, but this information can be difficult for some traders to analyze if they do not know how, or are not familiar with the format.
There are a variety of different websites and tools that have analyzed the information and provided it in a different format that may be easier for some people to interpret.
Free Dark Pool Data on Stockgrid
One such free website is Stockgrid.io. This website allows you to see a single ticker system at a time, and uses a variety of different colors to attempt to illustrate information.
Below is an example of SPY on the 18th of May, 2022. This can be used in combination with additional information in order to identify and predict possible future trends.
Free Dark Pool Data on Option Flow Tools
Another way that a person can find free dark pool data is to look for an option flow tool. Options flow is an analysis of some abnormal trades, particularly regarding options, and sometimes the tools used in order to gather information about such abnormal trades includes tools that have access to the dark pool.
You can learn more about options flow here and the best free real time options flow tools here.
One such example is Whale Stream. Unfortunately, the information can sometimes not be portrayed in a way that is very informative in free tools, but usually, it is interpreted enough that it makes a difference to possible trades.
Whale steam shows the quantity of the trade in terms of orders as well as in terms of capital, which can be more than enough to be able to make an educated decision on holding off on a trade, or confirming a decision to enter it.
Otherwise, there may be some paid versions with more accurate, up to date information and better analysis that may have a free trial.looking at in order to confirm if the use of dark pool data would be beneficial to your trading style, and the tickers that you prefer to trade.
Advantages of Using Free Dark Pool Data
As mentioned above, dark pool data could be an indication of the trades being made by institutional investors who have a lot more information and experience than retail investors.
For this reason, having access to dark pool data can assist a trader in forecasting or predicting the future of the market, leading to better risk management and more informed trades.
Additionally, having more information is always helpful to a trader, regardless of who is making the trades. It could also indicate when markets are being influenced by banks or other people who stand to gain, and allows for the identification of patterns in market manipulation, either alone or through the use of a tool such as TACHEON Time Warp, which could indicate when markets may be misleading traders and increase caution at certain times.
Disadvantages of Using Free Dark Pool Data
Firstly, even though dark pool data has been made available to the public, some of the free software may not illustrate the information in a way that could be very useful to a trader, or may require further analysis which may consume valuable time. Paid data may be quite expensive for the average retail trader.
Additionally, even though the data is made available, there is still no way of telling exactly who placed the trade, and therefore, any information that is extrapolated from the numbers would only be a guess.
Should you Use Free Dark Pool Data?
Considering all the information and the sites analyzed above, it may be a very good idea to look into using free dark pool data in order to analyze the markets and place your trades with more accuracy. However, it is important to not rely on free dark pool data entirely because it may be inaccurate, or it may not be easy to read.
Finding free dark pool data can be a little bit difficult, so it is important to use discernment and make sure that the information is accurate before including any information in considerations.
Remember to always manage risk when trading. Dark pool trading may assist with risk management, but because it may be a little bit confusing. It is important to remember that the key to a successful trader is risk management, so whether using free dark pool data or not, never rely solely on one tool or indicator in order to place a trade.
You might be also interested in finding out more about Thinkorswim Dark Pool and Thinkscript Compound Value.
