Order Flow and volume profile trading
- Thread starter mt4trader
- Start date
(Source : http://ferranfont.wix.com/orderbooktrading#!market-profile/c1xfi)
Which is the Market Profile?
We begin by asserting that it is not: Unfortunately, the Market Profile is not a trading system as we are used to seeing the type "green dot: Buy, red dot: Buy"
The Market Profile is a three dimensional view of the market represented in a Chart.
The Market Profile is a way to organize in a Chart, the real-time data reaching us from the market: "Market Generated Information".
The Market Profile is a way to organize market information in three dimensions: the Price, Time, and Volume, so we say it is a complex representation of the interactions between these three variables.
Why is it so important?
Its importance lies in the fact that it has been used by most traders CME (Chicago Mercantille Echange). Here, the Market Profile was designed by the same service WEC studies for their own traders. The reason was the closure of the pits, where they had come to work up to 10,000 professionals, and the rise of "Screen trading" or trading from the offices via Internet.
The outcry Traders of Chicago had a sixth sense when they were trabajandoen the parquet and could feel the "feeling" or market sentiment. When these traers were uploaded to the offices they lost much of the advantage they had yesteryear. The Market Profile wants to be for that tool that allows these traders one monitoring or pulse of the market.
Anatomy of the Volume Profile
In this Volume Profile we will label a series of concepts that we'll use to build thereon a system that we generate trading signals. Among other concepts this:
TPO (Time Price Opportunity): Minimum Unit Profile.
BRACKET: Set of TPO's which are 30 minutes of trading.
IB (Initial Balance): Set the first two braces in the market.
SINGLE: A TPO's which was between two profiles asylum during the session.
TAIL: A TPO or TPO's set that marked one end of market rejection of Price.
POC (Point of Control): The level of most traded in the session prices.
NPOC (Nacked POC): A POC previous sessions that have not been revisited in the current session.
VA (Value Area): This is the price range that encompasses 70% of the volume of Session.
VAH (Value Area High)and VAL (Value Area Low)
HVN (High Volume Node): It is profile node where it has generated a lot of volume.
LVN (Low Volume Node): A Profile node where the price usually passed without negotiation or volume.
Design a Trading System based on the volume profile
Trading System described below is to used today by many of the traders licensed by the CME. In this sense, it is not my system, but it was forwarded to me by my good friends of the CME who want to show my appreciation here:
MARKET PROFILE: "THE AUCTION MARKET THEORY"
Background
It aims to develop a Discretionary Model to interpret and follow market trends in real time - "as it unfolds" - as opposed to mechanical models based on indicators, which, being based on historical data, so often fail miserable in his attempt to predict future.
The result is a trading system based solely on price action, "Price Action" or "Naked Trading".
Markets are driven by the large volume operating the institutions - "Papers" - This large volume is its weakness: Stop Time needed negotiate and execute large number of orders. As a result, his movements leave a mark on the market "Footprint".
Auction Theory was developed by the CME and is currently adopted by traders from the Pit of Chicago. Its practical application, the Market Profile, has become popular as a means of tracking the "feeling" of the parquet, now that former operators of the Pit have been transferred to electronic trading in offices.
Theoretical Base Auction Market Theory
a) Market Balance
The market exists to facilitate negotiations "Market exists to FACILITATE trade" and also to facilitate change "Market FACILITATE exists to change". The market exists to facilitate that efficiently, the price is finally where it should be. The market exists to facilitate change and transition from inefficiency to efficiency.
When the market is in disequilibrium, "inefficency" she will not be indefinitely, but the market will look again his Balance - "BALANCE" - and efficiency - "efficency." - The market will find balance back into space-time price because that is their mission.
The premise that the market will always seek to find its equilibrium, to correct their inefficiencies, is the core basis of the theory and critical to it. Our business opportunities will be presented however, when the market is located precisely unbalanced.
The Market Profile is the real-time monitoring of the auction, an effect and consequence of auction theory, not vice versa. A TPO stands for "Time Price Opportunity", a given moment in time where if the price is out of balance, that is, the market is acting inefficiently or not facilitating the negotiations, offers a business opportunity , and remember that the main and only function of the market is precisely correct this inefficiency.
In the POC (Point of Control), or negotiated price, buyers and sellers are comfortable doing there trading because the market is in equilibrium, and therefore, is the worst place to execute our orders.
The POC is also a Node High Volume or HVN (High Volume Node), ie Volume at this price is very high.Accordingly HVN or POC is where the real value is - "VALUE" - product. At this level buyers and sellers they agree that the price is reasonable - "fair price" -
When the market is in disequilibrium, the value and price of the product do not match. Buyers and sellers receive this price as fair - "Unfair Price" - and the market will tend to correct this inefficiency.
b) Market Imbalance
Fortunately for traders, markets are not always in equilibrium, but because of its inefficiencies are in constant transition between equilibrium and disequilibrium - "BALANCE / IMBALANCE" - or between their efficiency or inefficiency.
What moves the market is not a higher / lower demand than supply, but the behavior of traders "Market Participans Behaviour". The market will rise when buyers (click on the ask) are more aggressive than sellers (click on the bid).
The Market is a living entity that evolves from state Efficiency: Market Equilibrium with prices adjusted to their value. "With Efficency Balanced Market Fair Prices", to a state of Inefficiency: Market Imbalance prices away from their value. "With Unfair inefficency Unbalanced Market Prices". And start again.
When the price moves away from its market value enters imbalance - "Breakout Mode" - in this situation we say a business opportunity "Price is ADVERTISEMENT" is created with two obvious results:
Rejected again is - "REJECTION" and return to its original value to correct this inefficiency - "Unfair Prices". In this case we say that the market has an Excess - "EXCESS" - and this inefficiency will be corrected to re-enter the area of value - "VALUE AREA" -.
- The new price is accepted - "acceptance" - or - "Fair Prices". In this new case, a Transition value is given to a new level - "VALUE TRANSITION"
"VALUE TRANSITION" is the migration or movement of the POC value to a new level in which the perception of its value has changed "Change on Value Perception".
When it is given the TRANSITION Value - "Value Transition" Market Profile will show a profile with a double distribution - "Double Distribution Day" and a movement of the POC will occur - "SHIFT" - from one level to another. Market Profile bullish or bearish trend as the rise or fall of the POC is defined.
On the Transition of Perception two nodes High Volume or HVN (High Volume Node) coinciding with the two POC, but also, and most importantly, between the two profiles will be a price level at which the price has gone to be formed without creating value.
This is an LVN (Low Volume Node), a level that has been negotiated very little volume, where buyers and sellers have shown a lack of interest, and therefore, that price has been rejected - "REJECTION" or " LACK OF INTEREST ". Often "SINGLE" which are price levels where only one has been able to print form TPO.
The concept of "VALUE TRANSITION" is of utmost importance for the Market Profile, the work of skilled Discretionary Trader is you evaluation using clues that the market offers "clues" if the price is acceptable - "acceptance" - or Rejected - "REJECTION" in the Changing the perception of value - "CHANGE oN VALUE PERCEPTION".
The Price always precedes the value, price is the announcement of the change of value, but its acceptance in a new level of perceived value must be confirmed with the volume. "Price is Advertisement, Volume is Confirmation".
An evaluation technique is the rule of Effort against results - "EFFORT VERSUS RESULTS" - in this case the price does not respond to stimuli that are given such as the price does not rise despite allowing plenty of selling pressure. This case all paper is neutralized from the DOM or Order Book with limit orders. This phenomenon is called "ABSORPTION".
c) Construction of a trading system based on the Theory of Auction
An idea of trading, among many others, is to use the LVN (Low Volume Node) as support and resistance.
The LVN are levels that have not been negotiated almost Volume, buyers and sellers have shown at this point lack of interest, the price has previously been rejected, and where the statistical probability of being rejected again is favorable. In conclusion, in the case of an uptrend, it is expected to operate as LVN support.
We want to build a trend following system, so we need several conditions are met (eg for an uptrend)
- The market should enter phase trend or "Imbalance" / "inefficency".
- There must be a change in the perception of the value a "VALUE transition" from a lower to a higher level, in other words, the value of the product must change from a lower to a higher value, or what is the same, the POC to migrate upward. Often the POC has not migrated yet, but can perform the operation if the probability of migrating soon is high.
- The phrase: "Price is Advertisement, Volume is confirmation," the price is the Announcement, the volume is confirmation, and the phrase: "The price above the value" means that in order to confirm the change in the perception of value - "VALUE TRANSITION" - the product must negotiate Volume (and time) at the new level. First we observe the movement of the price, but the pattern will not be fulfilled until Volume is generated in the new value.
- Our job as Discretionary Trader is to evaluate the Acceptance - "Acceptance" - or Rejection - "Rejection" - This new price level. In other words, determianr if market players believe the new price as a fair price - "Fair Price" - or as an unfair price - "Unfair Price" for money that I market efficiency fixed soon.
- The system is as simple as entering in favor of uptrend but in a correction thereof. What we buy is weakness in a market that shows strength in its underlying trend. What we want is just to buy a product that is at that time below its value, therefore we will wait until the price will fall across the POC, ie below it.
- "Rule #1: Buy below and Sell above Value until the Percepton of Value has change"
- "Rule #2: Do not forget Rule #1.
- A reasonable level to buy a Pull Back would do it on a stand, if we have defined the support as an LVN, wait for the price lag until the Node Low Volume that has formed in the Tanscisión of value, to buy at this point in favor of the trend.
- The Stop Loss system is a few ticks below the LVN and our Target is the projection on points and upward, the distance between the minimum daily and POC. "BALANCED MARKET" - This a normal distribution of the bell curve is achieved. The advantage of the system is that it offers a risk / benefit ratio (Risk / Reward) very favorable.
- The CME trader used as techniques to adjust the input - "TRADE LOCATION" the following:
• The Order Flow or order flow.
• The Delta (difference between bid and ask).
• The DOM or exercising the limited absorption from the Order Book orders.
• Reading the Tape - "Tape Reading" - or Time and Sales, which filtered to show only orders above 100 contracts, which associated with the institutions.
• Reading the NYSE $ TICK Chart where they observe the buying and selling pressure.
• The Pit Action, where they connect to the radio emitted from the parquet of CME (TradersAudio).
•
- Crossing an LVN, breakage, rebound or improvement is what gives us the BIAS Market and
the direction in which opear.
Here is an example:
1- The SP is in an uptrend, it has developed Value (POC) around 1,630 HVN (High Volume Node). The price enters imbalance (continue its upward trend) at 10.00 h in the morning.
2- When the price reaches the price is 1,637 ACCEPTed at this level and begins to create value (Negotiate Volume at this level) - "TRANSITION VALUE". At this time our pattern is confirmed as the POC has migrated from 1630 to 1637, this means that market players have changed the perception of fair value for the SP "Change on Value Perception".
Also, the price has left a Low Volume Node around 1634 LVN (Low Volume Node), a level at which the price has previously been rejected, and which we hope will be rejected again. Long entered just above this node.
Which is the Market Profile?
We begin by asserting that it is not: Unfortunately, the Market Profile is not a trading system as we are used to seeing the type "green dot: Buy, red dot: Buy"
The Market Profile is a three dimensional view of the market represented in a Chart.
The Market Profile is a way to organize in a Chart, the real-time data reaching us from the market: "Market Generated Information".
The Market Profile is a way to organize market information in three dimensions: the Price, Time, and Volume, so we say it is a complex representation of the interactions between these three variables.
Why is it so important?
Its importance lies in the fact that it has been used by most traders CME (Chicago Mercantille Echange). Here, the Market Profile was designed by the same service WEC studies for their own traders. The reason was the closure of the pits, where they had come to work up to 10,000 professionals, and the rise of "Screen trading" or trading from the offices via Internet.
The outcry Traders of Chicago had a sixth sense when they were trabajandoen the parquet and could feel the "feeling" or market sentiment. When these traers were uploaded to the offices they lost much of the advantage they had yesteryear. The Market Profile wants to be for that tool that allows these traders one monitoring or pulse of the market.
Anatomy of the Volume Profile
In this Volume Profile we will label a series of concepts that we'll use to build thereon a system that we generate trading signals. Among other concepts this:
TPO (Time Price Opportunity): Minimum Unit Profile.
BRACKET: Set of TPO's which are 30 minutes of trading.
IB (Initial Balance): Set the first two braces in the market.
SINGLE: A TPO's which was between two profiles asylum during the session.
TAIL: A TPO or TPO's set that marked one end of market rejection of Price.
POC (Point of Control): The level of most traded in the session prices.
NPOC (Nacked POC): A POC previous sessions that have not been revisited in the current session.
VA (Value Area): This is the price range that encompasses 70% of the volume of Session.
VAH (Value Area High)and VAL (Value Area Low)
HVN (High Volume Node): It is profile node where it has generated a lot of volume.
LVN (Low Volume Node): A Profile node where the price usually passed without negotiation or volume.
Design a Trading System based on the volume profile
Trading System described below is to used today by many of the traders licensed by the CME. In this sense, it is not my system, but it was forwarded to me by my good friends of the CME who want to show my appreciation here:
MARKET PROFILE: "THE AUCTION MARKET THEORY"
Background
It aims to develop a Discretionary Model to interpret and follow market trends in real time - "as it unfolds" - as opposed to mechanical models based on indicators, which, being based on historical data, so often fail miserable in his attempt to predict future.
The result is a trading system based solely on price action, "Price Action" or "Naked Trading".
Markets are driven by the large volume operating the institutions - "Papers" - This large volume is its weakness: Stop Time needed negotiate and execute large number of orders. As a result, his movements leave a mark on the market "Footprint".
Auction Theory was developed by the CME and is currently adopted by traders from the Pit of Chicago. Its practical application, the Market Profile, has become popular as a means of tracking the "feeling" of the parquet, now that former operators of the Pit have been transferred to electronic trading in offices.
Theoretical Base Auction Market Theory
a) Market Balance
The market exists to facilitate negotiations "Market exists to FACILITATE trade" and also to facilitate change "Market FACILITATE exists to change". The market exists to facilitate that efficiently, the price is finally where it should be. The market exists to facilitate change and transition from inefficiency to efficiency.
When the market is in disequilibrium, "inefficency" she will not be indefinitely, but the market will look again his Balance - "BALANCE" - and efficiency - "efficency." - The market will find balance back into space-time price because that is their mission.
The premise that the market will always seek to find its equilibrium, to correct their inefficiencies, is the core basis of the theory and critical to it. Our business opportunities will be presented however, when the market is located precisely unbalanced.
The Market Profile is the real-time monitoring of the auction, an effect and consequence of auction theory, not vice versa. A TPO stands for "Time Price Opportunity", a given moment in time where if the price is out of balance, that is, the market is acting inefficiently or not facilitating the negotiations, offers a business opportunity , and remember that the main and only function of the market is precisely correct this inefficiency.
In the POC (Point of Control), or negotiated price, buyers and sellers are comfortable doing there trading because the market is in equilibrium, and therefore, is the worst place to execute our orders.
The POC is also a Node High Volume or HVN (High Volume Node), ie Volume at this price is very high.Accordingly HVN or POC is where the real value is - "VALUE" - product. At this level buyers and sellers they agree that the price is reasonable - "fair price" -
When the market is in disequilibrium, the value and price of the product do not match. Buyers and sellers receive this price as fair - "Unfair Price" - and the market will tend to correct this inefficiency.
b) Market Imbalance
Fortunately for traders, markets are not always in equilibrium, but because of its inefficiencies are in constant transition between equilibrium and disequilibrium - "BALANCE / IMBALANCE" - or between their efficiency or inefficiency.
What moves the market is not a higher / lower demand than supply, but the behavior of traders "Market Participans Behaviour". The market will rise when buyers (click on the ask) are more aggressive than sellers (click on the bid).
The Market is a living entity that evolves from state Efficiency: Market Equilibrium with prices adjusted to their value. "With Efficency Balanced Market Fair Prices", to a state of Inefficiency: Market Imbalance prices away from their value. "With Unfair inefficency Unbalanced Market Prices". And start again.
When the price moves away from its market value enters imbalance - "Breakout Mode" - in this situation we say a business opportunity "Price is ADVERTISEMENT" is created with two obvious results:
Rejected again is - "REJECTION" and return to its original value to correct this inefficiency - "Unfair Prices". In this case we say that the market has an Excess - "EXCESS" - and this inefficiency will be corrected to re-enter the area of value - "VALUE AREA" -.
- The new price is accepted - "acceptance" - or - "Fair Prices". In this new case, a Transition value is given to a new level - "VALUE TRANSITION"
"VALUE TRANSITION" is the migration or movement of the POC value to a new level in which the perception of its value has changed "Change on Value Perception".
When it is given the TRANSITION Value - "Value Transition" Market Profile will show a profile with a double distribution - "Double Distribution Day" and a movement of the POC will occur - "SHIFT" - from one level to another. Market Profile bullish or bearish trend as the rise or fall of the POC is defined.
On the Transition of Perception two nodes High Volume or HVN (High Volume Node) coinciding with the two POC, but also, and most importantly, between the two profiles will be a price level at which the price has gone to be formed without creating value.
This is an LVN (Low Volume Node), a level that has been negotiated very little volume, where buyers and sellers have shown a lack of interest, and therefore, that price has been rejected - "REJECTION" or " LACK OF INTEREST ". Often "SINGLE" which are price levels where only one has been able to print form TPO.
The concept of "VALUE TRANSITION" is of utmost importance for the Market Profile, the work of skilled Discretionary Trader is you evaluation using clues that the market offers "clues" if the price is acceptable - "acceptance" - or Rejected - "REJECTION" in the Changing the perception of value - "CHANGE oN VALUE PERCEPTION".
The Price always precedes the value, price is the announcement of the change of value, but its acceptance in a new level of perceived value must be confirmed with the volume. "Price is Advertisement, Volume is Confirmation".
An evaluation technique is the rule of Effort against results - "EFFORT VERSUS RESULTS" - in this case the price does not respond to stimuli that are given such as the price does not rise despite allowing plenty of selling pressure. This case all paper is neutralized from the DOM or Order Book with limit orders. This phenomenon is called "ABSORPTION".
c) Construction of a trading system based on the Theory of Auction
An idea of trading, among many others, is to use the LVN (Low Volume Node) as support and resistance.
The LVN are levels that have not been negotiated almost Volume, buyers and sellers have shown at this point lack of interest, the price has previously been rejected, and where the statistical probability of being rejected again is favorable. In conclusion, in the case of an uptrend, it is expected to operate as LVN support.
We want to build a trend following system, so we need several conditions are met (eg for an uptrend)
- The market should enter phase trend or "Imbalance" / "inefficency".
- There must be a change in the perception of the value a "VALUE transition" from a lower to a higher level, in other words, the value of the product must change from a lower to a higher value, or what is the same, the POC to migrate upward. Often the POC has not migrated yet, but can perform the operation if the probability of migrating soon is high.
- The phrase: "Price is Advertisement, Volume is confirmation," the price is the Announcement, the volume is confirmation, and the phrase: "The price above the value" means that in order to confirm the change in the perception of value - "VALUE TRANSITION" - the product must negotiate Volume (and time) at the new level. First we observe the movement of the price, but the pattern will not be fulfilled until Volume is generated in the new value.
- Our job as Discretionary Trader is to evaluate the Acceptance - "Acceptance" - or Rejection - "Rejection" - This new price level. In other words, determianr if market players believe the new price as a fair price - "Fair Price" - or as an unfair price - "Unfair Price" for money that I market efficiency fixed soon.
- The system is as simple as entering in favor of uptrend but in a correction thereof. What we buy is weakness in a market that shows strength in its underlying trend. What we want is just to buy a product that is at that time below its value, therefore we will wait until the price will fall across the POC, ie below it.
- "Rule #1: Buy below and Sell above Value until the Percepton of Value has change"
- "Rule #2: Do not forget Rule #1.
- A reasonable level to buy a Pull Back would do it on a stand, if we have defined the support as an LVN, wait for the price lag until the Node Low Volume that has formed in the Tanscisión of value, to buy at this point in favor of the trend.
- The Stop Loss system is a few ticks below the LVN and our Target is the projection on points and upward, the distance between the minimum daily and POC. "BALANCED MARKET" - This a normal distribution of the bell curve is achieved. The advantage of the system is that it offers a risk / benefit ratio (Risk / Reward) very favorable.
- The CME trader used as techniques to adjust the input - "TRADE LOCATION" the following:
• The Order Flow or order flow.
• The Delta (difference between bid and ask).
• The DOM or exercising the limited absorption from the Order Book orders.
• Reading the Tape - "Tape Reading" - or Time and Sales, which filtered to show only orders above 100 contracts, which associated with the institutions.
• Reading the NYSE $ TICK Chart where they observe the buying and selling pressure.
• The Pit Action, where they connect to the radio emitted from the parquet of CME (TradersAudio).
•
- Crossing an LVN, breakage, rebound or improvement is what gives us the BIAS Market and
the direction in which opear.
Here is an example:
1- The SP is in an uptrend, it has developed Value (POC) around 1,630 HVN (High Volume Node). The price enters imbalance (continue its upward trend) at 10.00 h in the morning.
2- When the price reaches the price is 1,637 ACCEPTed at this level and begins to create value (Negotiate Volume at this level) - "TRANSITION VALUE". At this time our pattern is confirmed as the POC has migrated from 1630 to 1637, this means that market players have changed the perception of fair value for the SP "Change on Value Perception".
Also, the price has left a Low Volume Node around 1634 LVN (Low Volume Node), a level at which the price has previously been rejected, and which we hope will be rejected again. Long entered just above this node.
(Source : http://ferranfont.wix.com/orderbooktrading#!artists/cfvg)
ORDER FLOW
Reading the tape, or "Tape Reading" is a very old technique trading, remember that Jessie Livermore in Memoirs of a bourse operator was certainly a reader contributions that were reflected on the tape.
The name comes because formerly Tape contributions were transmitted by cable and the values were recorded on a punched paper tape:
The most important thing is to emphasize that the tape only reflects a 50% market realities, ie, reflects the orders to market buyers who clicks on the ask, or commands Market sellers clicks on the bid.
Therefore we affirm the Order Flow or tape reflects market demand, whether demand for purchase or sale demand. This as opposed to reflecting Order Book Offering either bid or offer for sale (since records limit orders or resting orders) that traders have launched in the Book.
In short, the order flow reflects traders who are anxious to participate in a movement because they want to be in the market at that time at any price.
EXAMPLE:
Imagine that a broker receives an order from a customer to buy 16 shares of a company, seeing the availability of that value in the Order Book, and available at every price range:
The average price to buy those 16 units will be 11 €
We need to know to play the tape is that the market is the junction of two streams:
TIME AND ORDER BOOK SALES OR DOM
Versus Market Orders to Limit Orders
In the Bid and the Ask Resting Orders
FLOW PATTERNS ORDER
Next we will show a series of signals generated Trading Order Flow reading. However, in reading order flow there is always a reading "is often more important what you do not see that what you see." Order flow gives us only read 50% of the market, however when a set of very large orders do not exert the expected result on the market may give us clues of a process of "absorption" from an institutional operator .
FAILURED TEST OF CLUSTER
Following a climax, the price is often revisit. This is because many traders want to join the prevailing trend so far in order to participate in it.
Also, at this point we have many traders who bought the Spike or break and were trapped in it.
See you in the order flow in this new visit buyers they are not equal either in quantity or strength in the previous cluster. Also, many of the Long trapped in the previous Climax, and have been enduring pain during pull-back, will take the opportunity to liquidate their position in Break Even.
All this makes the price form the so-called "start device" or a "C failure" or "failure 5th".
Here's another example of a cluster test:
In this case after the climax observe the amount of bid (marked area as Ross Hook) appears. As often said Al Brooks: The market tries to do something twice if I could not, then does the opposite ( "markets likes to try things twice, so take the second attempt").
Observe such as Delta produces a divergence in the sail 11: 24h, which eventually leads to the price to break the horizontal B (blue line or support):
ORDER FLOW
Reading the tape, or "Tape Reading" is a very old technique trading, remember that Jessie Livermore in Memoirs of a bourse operator was certainly a reader contributions that were reflected on the tape.
The name comes because formerly Tape contributions were transmitted by cable and the values were recorded on a punched paper tape:
The most important thing is to emphasize that the tape only reflects a 50% market realities, ie, reflects the orders to market buyers who clicks on the ask, or commands Market sellers clicks on the bid.
Therefore we affirm the Order Flow or tape reflects market demand, whether demand for purchase or sale demand. This as opposed to reflecting Order Book Offering either bid or offer for sale (since records limit orders or resting orders) that traders have launched in the Book.
In short, the order flow reflects traders who are anxious to participate in a movement because they want to be in the market at that time at any price.
EXAMPLE:
Imagine that a broker receives an order from a customer to buy 16 shares of a company, seeing the availability of that value in the Order Book, and available at every price range:
The average price to buy those 16 units will be 11 €
We need to know to play the tape is that the market is the junction of two streams:
TIME AND ORDER BOOK SALES OR DOM
Versus Market Orders to Limit Orders
In the Bid and the Ask Resting Orders
FLOW PATTERNS ORDER
Next we will show a series of signals generated Trading Order Flow reading. However, in reading order flow there is always a reading "is often more important what you do not see that what you see." Order flow gives us only read 50% of the market, however when a set of very large orders do not exert the expected result on the market may give us clues of a process of "absorption" from an institutional operator .
FAILURED TEST OF CLUSTER
Following a climax, the price is often revisit. This is because many traders want to join the prevailing trend so far in order to participate in it.
Also, at this point we have many traders who bought the Spike or break and were trapped in it.
See you in the order flow in this new visit buyers they are not equal either in quantity or strength in the previous cluster. Also, many of the Long trapped in the previous Climax, and have been enduring pain during pull-back, will take the opportunity to liquidate their position in Break Even.
All this makes the price form the so-called "start device" or a "C failure" or "failure 5th".
Here's another example of a cluster test:
In this case after the climax observe the amount of bid (marked area as Ross Hook) appears. As often said Al Brooks: The market tries to do something twice if I could not, then does the opposite ( "markets likes to try things twice, so take the second attempt").
Observe such as Delta produces a divergence in the sail 11: 24h, which eventually leads to the price to break the horizontal B (blue line or support):
today market very choppy.
just know i finished attending trading room.
he is also talking chopy market,directionless.
usa a people now telling choppy but from morning it was like that only.
whoever watched today trading dont discourage with system, dontworry it will workwell in normal markets.so my advice is enter only when find a good entry only,otherwise leave it.main concept is controlling the loss is in the orderflow system.
happy trading wait for tomorrow
just know i finished attending trading room.
he is also talking chopy market,directionless.
usa a people now telling choppy but from morning it was like that only.
whoever watched today trading dont discourage with system, dontworry it will workwell in normal markets.so my advice is enter only when find a good entry only,otherwise leave it.main concept is controlling the loss is in the orderflow system.
happy trading wait for tomorrow
5 min UA set ups worked for me ... though i started bit late today around 8:45. i am plaing in mini and my focus was scalping 10-15 points..Really helping new UA Line stuff. My keyboard has some issue to take printscreen hence didn't post. 4 success full entries today. current short is running from 2315 ..first target done. waiting 2nd to hit 2296.
I second that idea to have some live group to help each other
Thx,
KP
I second that idea to have some live group to help each other
Thx,
KP
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