Volume, Supply & Demand, Order Flow - The Core | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Discussions on Order Flow/Volume 517 replies

Supply demand trading and order flow 46 replies

How to flow with the order flow? 26 replies

Applying Order Flow & Volume Profiles To Futures Trading 121 replies

Historical Options & Order flow Info... 20 replies

Attachments: Volume, Supply & Demand, Order Flow - The Core
Exit Attachments

Volume, Supply & Demand, Order Flow - The Core

  • #1
  • First Post: Dec 26, 2019 8:38am Dec 26, 2019 8:38am

This thread will be disruptive, it won't hold any punches but it will get to the core of all price movement without a lagging approach. In fact everything that you'll read in my posts are the precursors to price action. Price Action happens only AFTER Volume has shifted directions or determined that VOLUME is not changing and the imbalance will continue.

Changes in direction can ONLY happen WHEN there is a validated SHIFT in SUPPLY/DEMAND - Which is VOLUME.

Order Flow is the NET of movement - tracking it's constant pressure and knowing where they are increasing or decreasing their imbalances - of yes, Volume.

All of these, Volume, Supply and Demand, Order Flow - it's all the same, if you think you know one of them you should know all of them. If you preach you know one and don't know the other you're in a failed state of belief, typical to the retail sector of trading.

If you bite your pride and grasp the concept that there's something better, you're in good hands. You'll find that through volume everything else you've ever used or integrated into your trading becomes a great insulation to the walls of your waste can.

As I said at the start, this thread will be disruptive. I'm not trying to insult people or their 'work' but if their work is expending countless hours on what doesn't provide productive reasoning then it's merely reinforcing bad habits and the transparency that you desire is a long way away.

Our Mission at ClearStreamFX is to provide the transparency and experience of institutional trading to the retail sector.

So if you're ready we can begin. If you have interest in the bigger picture of Education there's a thread for that as well. If you're looking for responses on Trader Funding there's a thread to that as well. FF provides a good solution for traders to educate one another and we'll this thread to show YOU how you can walk circles around the market.
The charts are wrong but the world accepts what it doesn't know.
  • #2
  • Edited 10:47am Dec 26, 2019 9:46am | Edited 10:47am
So as a market making trader - I know that streaming prices into any of the institutional ECN's requires BOTH a bid and an offer. If they aren't sent simultaneously the stream is rejected.

So if I'm making markets and my expectation is that prices are going to move higher, I would be bid the market to entice a trader to sell to me on my bid. BUT 95% of bank volume is NOT via market making, it's aggressively trading off other bank prices as a price taker. But what this DOES mean is that half the bids/offers in the limit order books are pure garbage. Not necessarily done so to tilt the beliefs of movement but simply because it's required by the ECN's.

So giving two market makers, one on Bid and the other on Offer... both enticing price takers (aggressive traders) to trade on narrowed down spread to get the best deal for the trader as well as the optimum price for the market maker. The market will naturally see a thinned spread but in the bigger picture of movement.. who are the cumulative bids in the market and does their bank roll identify a premium return over the market maker who sits on offer?

It really doesn't matter. What does matter though is that you understand cumulatively the aggregated bid volume vs the aggregated offer volume and the net difference of those numbers. Once you have that you're ready to start looking at volume in a whole new way.

Here's an example:

This ALSO means that knowing how much volume is on a bid at all levels and price drops by 3 pips in one tick, you are now able to understand exactly how much was sold on that ECN to get the price to move lower - But wait - the same thing happens on ALL the ECN's and the net difference is the supply over demand - you see where prices are moving and exactly why.

This is NOT MT4 Volume - MT4 Volume is utter garbage.
This is NOT Platform Volume - Bars/Histograms in 99% of Platforms do not show volume properly.

It IS knowing where the banks (by net bullish or bearish volume ) are trading on the fly without lag.
This is NOT reading supply and demand zones - This is light years ahead of the nonsensical study of old data.
This is NOT MERELY Order Flow Trading - Order Flow, and the study of orders are a component of volume but volume drives the data so stick to volume and you'll be more enlightened and intelligent.

If you THINK that volume isn't available for the retail sector, for the most part you are correct.
If you THINK volume isn't available for institutional traders - You should go back to school for economics 101. Supply and Demand - Volume data isn't cheap from an architectural point of view but it's very much available for those with the resources to programmatically develop the aggregation. This is typically not the retail trader.
The charts are wrong but the world accepts what it doesn't know.
  • #3
  • Dec 27, 2019 6:39am Dec 27, 2019 6:39am
Which has more noise? The H1 or M1
The charts are wrong but the world accepts what it doesn't know.
  • #4
  • Dec 27, 2019 8:43am Dec 27, 2019 8:43am
If I follow you right more noise has H1.
May be because has old data dk.
  • #5
  • Dec 27, 2019 8:48am Dec 27, 2019 8:48am
Quoting frwrd
If I follow you right more noise has H1. May be because has old data dk.
Yes. Much more noise on the H1. Old data, historical price movements and ranges of price action that are significantly wider off the high/low. The lower time frames have the 'immediate' action/reaction and present the ability to see where volumes breaching trigger an opportunity which then may test the high of the H1.. but in the mean time the trader on the H1 is waiting for it to break higher and misses the 30 pip move to the H1 high.
The charts are wrong but the world accepts what it doesn't know.
  • #6
  • Dec 27, 2019 10:28am Dec 27, 2019 10:28am
Great thread Csfxtrading!

The sooner everyone understands that Volume Moves Price, the better their trading will be. Thanks for sharing.
  • #7
  • Dec 27, 2019 10:44am Dec 27, 2019 10:44am
Quoting corinthia
Great thread Csfxtrading! The sooner everyone understands that Volume Moves Price, the better their trading will be. Thanks for sharing.
You're welcome. It's one of those things. Because they don't see it they think it's not important, but it's that important to the institutions so they don't want traders to see it.

Here's what volume does... GBPJPY today. Right now. The RED candles are downward with Volume and Trader Aggression. The Blue Candles are bullish moves with volume and Trader aggression. It doesn't take long once you understand HOW the market moves that you'll be able to align with proper analysis when it shows you exactly which candles present opportunities..
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY.JPG Size: 163 KB
The charts are wrong but the world accepts what it doesn't know.
  • #8
  • Dec 27, 2019 1:32pm Dec 27, 2019 1:32pm
It will be a busy session but if you have a registered profile (which costs nothing) You can register for our Weekend Warrior Trading Session tomorrow. An intense instructional session that shows you rules to live and profit by in a forward walk through random market activity. Register Standard Access - Does NOT need to be verified.

We'll discuss required components of price action and volume - we'll then simplify it all with FT43
The charts are wrong but the world accepts what it doesn't know.
  • #9
  • Dec 27, 2019 7:47pm Dec 27, 2019 7:47pm
I am interested in your ways. Also I signed up for the training tomorrow, what time?
  • #10
  • Dec 27, 2019 7:48pm Dec 27, 2019 7:48pm
Quoting tsaav20
I am interested in your ways. Also I signed up for the training tomorrow, what time?
7 AM EST (Ny Time)
The charts are wrong but the world accepts what it doesn't know.
  • #11
  • Dec 27, 2019 7:49pm Dec 27, 2019 7:49pm
Quoting Csfxtrading
{quote} You're welcome. It's one of those things. Because they don't see it they think it's not important, but it's that important to the institutions so they don't want traders to see it. Here's what volume does... GBPJPY today. Right now. The RED candles are downward with Volume and Trader Aggression. The Blue Candles are bullish moves with volume and Trader aggression. It doesn't take long once you understand HOW the market moves that you'll be able to align with proper analysis when it shows you exactly which candles present opportunities.....
Can you explain what the numbers drawn on the screen mean
  • #12
  • Dec 27, 2019 8:01pm Dec 27, 2019 8:01pm
Quoting tsaav20
{quote} Can you explain what the numbers drawn on the screen mean
From the screen shot earlier in hand written notes? Those were just the size in pips of each of the movements. Approx sizes.
The charts are wrong but the world accepts what it doesn't know.
  • #13
  • Dec 27, 2019 8:09pm Dec 27, 2019 8:09pm
Quoting Csfxtrading
{quote} From the screen shot earlier in hand written notes? Those were just the size in pips of each of the movements. Approx sizes.
yes I was referring to the yellow numbers. thanks for clearing that up
  • #14
  • Dec 27, 2019 8:13pm Dec 27, 2019 8:13pm
Quoting tsaav20
{quote} yes I was referring to the yellow numbers. thanks for clearing that up
No worries. LOTS of opportunities!
The charts are wrong but the world accepts what it doesn't know.
  • #15
  • Dec 28, 2019 8:37am Dec 28, 2019 8:37am
As many saw in our WW session this AM, the lights went on and volume walked circles around almost every move!
The charts are wrong but the world accepts what it doesn't know.
  • #16
  • Dec 29, 2019 5:41am Dec 29, 2019 5:41am

I am enjoying this thread I appreciate the way you burn through the fog to get to the transparency of what is driving price movement .

Could it be argued that the only lagging indicator would be the formation of the candle itself?

  • #17
  • Dec 29, 2019 5:45am Dec 29, 2019 5:45am
Quoting CarlLaFong
I am enjoying this thread I appreciate the way you burn through the fog to get to the transparency of what is driving price movement . Could it be argued that the only lagging indicator would be the formation of the candle itself?


The only lagging component in the candles that I don't suggest you use is the close of the candle. The only time I've ever looked at my watch while trading was when it was market close. Otherwise the market doesn't trade on intervals and the close of the minute or candle in any case is purely noise itself.
The charts are wrong but the world accepts what it doesn't know.
  • #18
  • Dec 30, 2019 1:09pm Dec 30, 2019 1:09pm
I have seen that you ran a free training course last week ? do you plan more of these?
  • #19
  • Last Post: Dec 30, 2019 1:27pm Dec 30, 2019 1:27pm
Quoting CarlLaFong
I have seen that you ran a free training course last week ? do you plan more of these?
Probably in a couple weeks we'll hold another.
The charts are wrong but the world accepts what it doesn't know.
0 traders viewing now