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  • #7,641
  • Sep 19, 2018 3:59am Sep 19, 2018 3:59am
Quoting theunis
{quote} Thanks for the honest feedback Mr D and GC - it is appreciated!
Hi Unis,

I think Nik's chart shows well what i was trying to highlight. It's just a case of always looking left to determine each previous important level. If it doesn't get broken, there is a strong likelihood that the trend will continue and as is quite often the case, that means the 'impulse' count is with underlying trend.

The problem with them is that they don't always give 123 triggers and a retrace, they can often just rocket - that's exactly why two of those trades in your chart failed.

Just by viewing it in such manner would eliminate two losers and also, give you a possibility for taking the 'back into main trend' too. If you stop and think about it, that turns the trading on it's head... less loses and more winners, which is all we are trying to do.

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This is also common, when a larger (ABC) corrective move prints a 2B, with a LL, (A), only to then pullback to break the last LH, (B) before resuming another leg lower (C). But this action is usually choppy and gives many nice set-ups, with deep retraces;

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  • #7,642
  • Sep 19, 2018 4:53am Sep 19, 2018 4:53am
Quoting The Cableguy
{quote} Hi Unis, I think Nik's chart shows well what i was trying to highlight. It's just a case of always looking left to determine each previous important level. If it doesn't get broken, there is a strong likelihood that the trend will continue and as is quite often the case, that means the 'impulse' count is with underlying trend. The problem with them is that they don't always give 123 triggers and a retrace, they can often just rocket - that's exactly why two of those trades in your chart failed. Just by viewing it in such manner would eliminate...
I am trying to get more insight here but the looking left to see previous supply and demand levels for all 4 losing trades shown in the below ... that together with the either thrust bar or tail is the guideline and are there with all four trades, although I must admit it is not perfect setups. The S/D level is there but who knows if it is going to hold or break? Getting "better" setups is what makes Mr D so effective while I struggle, especially with live mode where emotions pops up and interferes. It is easy to mark the setups later but when in the moment any pullback has potential ... to stay calm and focused and reject poor setups and wait for those well defined types seems to be the only skill needed ... and that takes practice.
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Never give up !!!
  • #7,643
  • Sep 19, 2018 5:05am Sep 19, 2018 5:05am
Trend first, then pullback!

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This is what i keep trying to explain - be wary once prior S/D levels are reached, as the counter-trend is likely over.
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  • #7,644
  • Sep 19, 2018 5:14am Sep 19, 2018 5:14am
Quoting The Cableguy
Trend first, then pullback! {image} This is what i keep trying to explain - be wary once prior S/D levels are reached, as the counter-trend is likely over.
Ahhh ... thanks ... I see ... I get muddled and miss the main trend and then any pullback and even S/D level becomes a trap of sorts ... I get it ! Will have to go back and check the previous live bombouts but I am pretty sure it is the same there. Thanks again !!!
Never give up !!!
  • #7,645
  • Sep 19, 2018 11:10am Sep 19, 2018 11:10am
NQ - 30Sec - 930am Est to 12pm highlighted - 9/18

You guys are all correct . . . Green and Red candles are S/D that are calculated and therefore consistently applied, zero discretion, only math. More to follow as time permits.

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  • #7,646
  • Sep 19, 2018 11:28am Sep 19, 2018 11:28am
Quoting Nik-Nyc
NQ - 30Sec - 930am Est to 12pm highlighted - 9/18 You guys are all correct . . . Green and Red candles are S/D that are calculated and therefore consistently applied, zero discretion, only math. More to follow as time permits. {image}
Looks great except this one... typo?
Attached Image
Staying in my lane...
  • #7,647
  • Sep 19, 2018 11:50am Sep 19, 2018 11:50am
Quoting VEEFX
{quote} Looks great except this one... typo? {image}
Correct, that arrow should be 3 candles to the right, which in this case is also a RED candle. Good eye.

Edit: just noticed your blue circle . . . That green candle is not at the beginning (bottom/top) of a swing, therefore we disregard it as a S/D level.
  • #7,648
  • Sep 19, 2018 12:01pm Sep 19, 2018 12:01pm
Quoting Nik-Nyc
{quote} Correct, that arrow should be 3 candles to the right, which in this case is also a RED candle. Good eye. Edit: just noticed your blue circle . . . That green candle is not at the beginning (bottom/top) of a swing, therefore we disregard it as a S/D level.
perfect... looking forward to more details around the "zero discretion only math"... I hate "maybes" in my decision making with entries as well. It's either a BUY or a SELL.. crystal clarity in pulling the trigger without any hesitation :-)
Staying in my lane...
  • #7,649
  • Edited 5:38pm Sep 19, 2018 5:15pm | Edited 5:38pm
My understanding of what Harold has shared and taught in this thread centers around simple PA patterns like the 123 and 2B on the most immediate micro scale, as well as the concept of S/D. The PA patterns printed by the candles are (mostly) objective because we can see what price achieves through the Hi's/Lo's or Closes therefore it's usually clear whether we should be looking for Longs or Shorts. Once we know which direction we should be looking to trade, its all about waiting for the pullback into S/D. Now while the pullback is also very objective (price movement against the direction of the "trend" without invalidating the trend), what is the definition of S/D? Also, once we define S/D, how do we identify it consistently and objectively?

Currently, from what i can tell, Harold identifies S/D areas by checking for thrust bars (aka swift price movement) away from turning points that are either inline with the "trend" or initiate a new "trend". Clearly this works very well for him, and there is no reason to change anything. However, i will venture a guess that part of the reason Harold can identify these areas so accurately as well as not getting lost within swings, is because he has been trading this method (or similar variation) for many many many years. Therefore, to a degree, these S/D zones almost register in automatic and its a testament to Harold's creativity & hard work. That said, what about everyone else who doesn't have years of screen time observing S/D, thrust bars, etc etc? Well, luckily, for those who choose to trade the futures market, there is a way of identifying S/D mathematically and display it on a chart in a non-distracting way. Orderflow is your solution.

The topic of Orderflow Analysis is quite the Rabbit-hole (note: profitable rabbit-hole), however there are some very simple concepts we can apply to identify areas of S/D and use them with this trading method. Now, while we all know that for any order to be filled there must be a matching opposite order on the other side, it is important to distinguish at least two type of order: Limit orders (passive) and Market orders (aggressive). Generally, Market orders are filled by limits orders waiting on the other side, and limit orders are filled by market orders hitting into them. Typically, market orders are considered aggressive entries and limit orders are considered passive entries. So how does this relate to Supply and Demand?

Simple, if there is more aggressive market selling than market buying and yet the candle closes bullish, it is factual to say that there must have also been more limit buy orders resting than there were aggressive sellers. This is demand. The passive buyers were more plentiful than the aggressive sellers. Furthermore, whatever market buys orders were executed were enough to generate a bullish close. This is oversimplified, but should be enough to understand the core concept.

Therefore, the simple calculations to display the Green or Red bars are the following:

Green Demand Bars: Market Order Sellers > Market Order Buyers, plus, close >open
Red Supply Bars: Market Order Buyers > Market Order Sellers, plus, close < open

It is essential to remember that these S/D zones should be traded as has been taught in this thread. When swings begin with these S/D's and qualify as trades as per all the other objective rules, you can trade the pullback retest of these zones. These green and red candles in the middle of swings or not at a turning point do not represent trading opportunities, they are only useful within the context of all the other rules.

From my testing, taking trades as per Harold's rules with the additional condition that the swing begins with and Orderflow based S/D candle increases the win rate (significantly) and decreases the frequency of trades. Furthermore, it should help newer traders identify S/D more objectively and consistently which seemed to be where many got confused. Lastly, it's also true that many great setups do not begin with Orderflow S/D zones, therefore they are not required, however this tool was developed to help newer traders avoid the "nooks and crannies" and participate when the market is truly, mathematically, "imbalanced".

I will continue posting the morning session charts for the NQ so everyone can judge whether these candles/zones are useful, and if there is interest i am happy to share the sierra studies and setting.

In the meantime, a quick view of the amazing data that we futures traders have access to and can choose to incorporate into our trade plans:

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Edit: The amazing thing is we can crunch whatever numbers we like and when we find a edge we can display it on a regular candle chart without having to look at the streaming Orderflow data which can easily drive you nuts.
  • #7,650
  • Sep 19, 2018 6:52pm Sep 19, 2018 6:52pm
Quoting Nik-Nyc
My understanding of what Harold has shared and taught in this thread centers around simple PA patterns like the 123 and 2B on the most immediate micro scale, as well as the concept of S/D. The PA patterns printed by the candles are (mostly) objective because we can see what price achieves through the Hi's/Lo's or Closes therefore it's usually clear whether we should be looking for Longs or Shorts. Once we know which direction we should be looking to trade, its all about waiting for the pullback into S/D. Now while the pullback is also very objective...
Nicely done Nik. In these numbers on your chart, do you have anything related to VWAP? I am finally dipping my toes into ticks and volume (as part of my research as I have focused mainly on OHLC). I feel there is a correlation between vwap and the space or "void" being filled between S and D levels. VWAP is a very legit way of trading pullbacks. BTW: Who is Harold?
Staying in my lane...
  • #7,651
  • Sep 19, 2018 6:52pm Sep 19, 2018 6:52pm
Quoting Nik-Nyc
.
I'd love to take a look at the study, going to try n work it out myself in the mean time
  • #7,652
  • Sep 19, 2018 7:04pm Sep 19, 2018 7:04pm
Quoting Nik-Nyc
. . . . Limit orders (passive) and Market orders (aggressive). Generally, Market orders are filled by limits orders waiting on the other side, and limit orders are filled by market orders hitting into them. Typically, market orders are considered aggressive entries and limit orders are considered passive entries. So how does this relate to Supply and Demand? Simple, if there is more aggressive market selling than market buying and yet the candle closes bullish, it is factual to say that there must have also been more limit buy orders resting than...
Great. I noted this info on a video about S/D a couple weeks ago and was wondering how it might be easily seen IN the candles. -Jason

Edit: oh yeah, it was a video about a platform printing "number bars" similar to Sierra. But i dismissed it for the time being as i dont have Sierra's package 5.
  • #7,653
  • Sep 19, 2018 7:08pm Sep 19, 2018 7:08pm
Quoting rudy5
{quote} I'd love to take a look at the study, going to try n work it out myself in the mean time
Hi Rudy,

Glad you are interested and willing to tinker on your own . . . as a small hint, you will need the "Numbers Bars Calculated Value" study and two instances of the "Color bar based on alert condition study" (one for green, the other for red).

Will share all tomorrow, as you will see the conditions are very simple.


Vee,

Divergence's name is Harold, hahaa, sorry. Regarding Vwap, i have tested it and found it useful in certain contexts, but not specifically relating to S/D or the method in this thread. As you explore all the new real-time data that the futures markets offers i recommend you focus on the bid/offer market executions as well as the historical limit order book and how they of course relate to price (or dare i say it, how they cause price to move). I am confident you will be pleased.
  • #7,654
  • Edited 7:44pm Sep 19, 2018 7:15pm | Edited 7:44pm
Quoting bapakjason
{quote} Great. I noted this info on a video about S/D a couple weeks ago and was wondering how it might be easily seen IN the candles. -Jason Edit: oh yeah, it was a video about a platform printing "number bars" similar to Sierra. But i dismissed it for the time being as i dont have Sierra's package 5.
Jason,

The text you quoted does take a minute to fully grasp, but once you fully understand it the market, any market, begins to make a lot more sense. Luckily as a sierra user you will be able to display just about anything you can think of.

Regarding sierra PKG 5, your broker will give you a 30 day trial if you are a regular sierra user.
  • #7,655
  • Edited 8:35pm Sep 19, 2018 7:54pm | Edited 8:35pm
looks like a great "tool" for staying out of the nooks 'n crannies that fool us--look forward to seeing more and gaining "eyes" closer to Harold's
  • #7,656
  • Sep 19, 2018 8:21pm Sep 19, 2018 8:21pm
Quoting Nik-Nyc
{quote} Hi Rudy, Glad you are interested and willing to tinker on your own . . . as a small hint, you will need the "Numbers Bars Calculated Value" study and two instances of the "Color bar based on alert condition study" (one for green, the other for red). Will share all tomorrow, as you will see the conditions are very simple. Vee, Divergence's name is Harold, hahaa, sorry. Regarding Vwap, i have tested it and found it useful in certain contexts, but not specifically relating to S/D or the method in this thread. As you explore all the new real-time...
Will do... and expect a lot of noob questions along the way :-) I am at the exploratory phase to select he broker and platform... so completely noob in the futures world lol
Staying in my lane...
  • #7,657
  • Sep 19, 2018 8:42pm Sep 19, 2018 8:42pm
Ain't trading Great!!!!!!!
  • #7,658
  • Sep 20, 2018 4:48am Sep 20, 2018 4:48am
Quoting Nik-Nyc
Orderflow is your solution. Therefore, the simple calculations to display the Green or Red bars are the following: Green Demand Bars: Market Order Sellers > Market Order Buyers, plus, close >open Red Supply Bars: Market Order Buyers > Market Order Sellers, plus, close < open It is essential to remember that these S/D zones should be traded as has been taught in this thread. this tool was developed to help newer traders avoid the "nooks and crannies" and participate when the market is truly, mathematically, "imbalanced". I will continue posting...
There is definitely interest :-)
Very insightful, thank you very much . .. it makes sense so take some of the guesswork out, I know the nooks and crannies gets me for sure.

Just one question though ... you state:
"Green Demand Bars: Market Order Sellers > Market Order Buyers, plus, close >open
Red Supply Bars: Market Order Buyers > Market Order Sellers, plus, close < open"

Is it not?:
Green Demand Bars: Market Order Sellers < Market Order Buyers, plus, close >open
Red Supply Bars: Market Order Buyers < Market Order Sellers, plus, close < open

Trading is amazing for sure, also keeps one humble :-D
Never give up !!!
  • #7,659
  • Sep 20, 2018 8:05am Sep 20, 2018 8:05am
Quoting theunis
{quote} There is definitely interest :-) Very insightful, thank you very much . .. it makes sense so take some of the guesswork out, I know the nooks and crannies gets me for sure. Just one question though ... you state: "Green Demand Bars: Market Order Sellers > Market Order Buyers, plus, close >open Red Supply Bars: Market Order Buyers > Market Order Sellers, plus, close < open" Is it not?: Green Demand Bars: Market Order Sellers < Market Order Buyers, plus, close >open Red Supply Bars: Market Order Buyers < Market Order Sellers, plus, close <...

Theunis,

The different formula conditions you mention do have merit, however to fully understand the subtleties would require a lengthy explanation on absorption, consumption, accumulation, rotation, etc etc. Since this trading method is based on the very immediate swings (123), there is no real need to understand and implement these concepts. Personally, i believe this is one of the reasons why this methods is successful, its inherent simplicity.

What is very interesting is that the retests at the end of the pullbacks tend to have the conditions you outlined. This is to say that buyers are willing to get more aggressive (and pay the spread) with market orders when they know they are entering a zone that was previously thick with buy limit orders. This makes a lot of sense if you think about it.

N.
  • #7,660
  • Sep 20, 2018 8:29am Sep 20, 2018 8:29am
Quoting Nik-Nyc
I will continue posting the morning session charts for the NQ so everyone can judge whether these candles/zones are useful, and if there is interest i am happy to share the sierra studies and setting.
Awesome stuff Nik! I look forward to the charts and setting up the confirmation.
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