@makingmoves can you share more of your trades from time to time using this strategy please?
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- Joined Jun 2022 | Status: Evolving | 184 Posts
Disliked@makingmoves can you share more of your trades from time to time using this strategy please?Ignored
Absolutely, I am still and will keep on posting relevant trades to this strategy into the future! I do trade other strategies especially connected with Auction Market Theory, of which I plan to post on how it relates to this strategy at some point. That being said I have posted many trade breakdowns on the thread, that should hopefully provide any readers enough charts/trades to analyse for now.
Here is a directory of all trade breakdowns so far:
General Strategy Details
Last Year's Trades
- Trades From The Start Of 2023 (#1)
- Trades From The Start Of 2023 (#2)
- Trades From The Start Of 2023 (#3)
- Trades From The Start Of 2023 (#4)
- Trades From The Start Of 2023 (#5)
- Trades From The Start Of 2023 (#6)
- Trades From The Start Of 2023 (#7)
- Trades From The Start Of 2023 (#8)
- Trades From The Start Of 2023 (#9)
- Trades From The Start Of 2023 (#10)
Real-time Trade Analysis & Breakdown
- EURUSD - Monday 11th December 2023
- EURUSD - Wednesday 13th December 2023
- EURUSD - Thursday 21st December 2023
- EURUSD - Friday 22nd December 2023
- EURUSD - Wednesday 17th January 2024
- EURUSD - Wednesday 7th February 2024
- EURUSD - Wednesday 16th February 2024
Seeking Fair Value
Disliked{quote} Hello cinalex, There are many services/software that provide these tools, all with varying degrees of quality. Please refer to post #47 were I go over what I use to trade and if MT4/5 can handle this type of analysis. It is also less a indicator and more a tool. I recommend you always do your own thorough research and don't take anyone's word on what to use, think for yourself! I hope that helps. I would also like to thank Rick M & gisselle1723 for contributing to...Ignored
I also trade this way, but my tape reading, etc is very poor so I developed a "picture" based system that my brain handles faster. Let's just say that my sixth grade teacher wrote "SLOW" in the math area of my report card. Yes, it was in all CAPS! I did not recall this until finding it while going through things from our attic a few months ago. My wife and I had a good laugh...it explained a lot about how my brain works/doesn't work. So, as you've mentioned, we all trade it a little bit differently, but in the end it works very well. Hopefully, newbies and those struggling to find an edge will learn from your thread and put their own twist (things they see and look for) on it and, like RickM said, they will do well with it.
Have you found any videos that helped you with tape reading that might help the people viewing this thread?
Please confirm for thread readers that the D, P, b, I are based on the 30minute chart and the tape reading is based on 5minute candles (Edited: changed from 1m to 5m to correct it based on makingmoves reply below so I don't confuse anyone). My apologies if you mentioned this and I missed it.
I especially enjoy your most recent examples because I can go to my charts and walk through them with you. Thank you again.
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- Joined Jun 2022 | Status: Evolving | 184 Posts
Disliked{quote} Hi makingmoves. Thank you for the time you've put into this thread. Posting and explaining things is very time consuming. I also trade this way, but my tape reading, etc is very poor so I developed a "picture" based system that my brain handles faster. Let's just say that my sixth grade teacher wrote "SLOW" in the math area of my report card. Yes, it was in a CAPS! I did not recall this until finding it while going through things from our attic a few months ago. My wife and I had a good laugh...it explained a lot about how my brain works/doesn't...Ignored
Nice thanks for reaching out, I love to meet another Order Flow trader and one that obviously has been around for quite a while! I am very intrigued as to what you changed to make the interpretation of the data easier. I completely understand, in school I really struggled with English but luckily I've always been more maths minded. Teachers definitely used to be much more blunt lol. You are the textbook example of what every trader should do, adapting and playing into their strengths while acknowledging their weakness's and implementing a plan/fix to address them!
I agree with you completely, any new (or not) trader can read through this thread and almost certainly leave with more ideas and knowledge than when they arrived. I am proud that is the case and that I'm doing my part in the trading community.
Before I answer your questions, to avoid any confusion, I would like to clarify how I use Order Flow. I do not monitor or analyse the order book or market depth / D.O.M. I'm strictly interested in orders that have been placed (these orders, once printed, never change - no spoofing) usually represented on a footprint chart. As you say, everyone trades differently and there are many successful traders who primarily trade based on the DOM. I encourage everyone to learn as much as possible on all aspects of Order Flow! I bring all this up because I usually hear and associate the saying 'tape reading' with watching the order book and not the way I'm trading order flow (I call it post trade settlement). I'm sure you are already aware of this cashbox, but for anyone else reading I wanted to clarify what we are talking about.
As the topic we are talking about (Order Flow) is very niche and relatively unknown, there are no YouTube videos that instantly spring to mind on the matter! A lot of Order Flow videos are unfortunately just subtle ads for the course their selling in the description, of which I do not know the quality. There are some books on the matter and quite a few websites who give different descriptions / lessons on general aspects of Order Flow. Apart from that I recommend people get the tools and learn about how they function etc, then read online forums and relate what past traders were talking about to what your seeing and expand on it.
Thank you for bringing up anything I potentially missed in the strategy! Yes every screenshot I have posted of the Volume Profiles has been accompanied by a 30 minute standard candlestick chart. What's important here is the Daily Volume Profile, and not the 30 minute chart! You could removed the candlesticks altogether (as long as you can see the current trading price) and just have the daily Volume Profile and you would still be able to effectively trade this strategy.
Initially I did only analyse the 5 minute footprint chart when trading this strategy and that is still the best bet for beginners, to avoid being chopped up and faked out on the 1 minute timeframe. When a trader is more experienced, I fully support the analysis of both the 5 minute and 1 minute footprint charts. The goal isn't just to get a better/quicker entry (if confirmations are present) but to get a clearer view of what is taking place.
Thanks again for stopping by and reaching out, I will continue to post real-time trade breakdowns so people can follow along!
Trade safe,
MM
Seeking Fair Value
3
- Joined Jun 2022 | Status: Evolving | 184 Posts
A Trade Setup / Example From Yesterday (Wednesday 28th February 2024) & Discussion
On Tuesday 27th February 2024, EURUSD created a balanced 'D' distribution volume profile. The following day (Wednesday 28th), price consistently trended lower, breaking out of the prior day's volume profile range. As price found a temporary bottom and started to retrace, this is where you begin looking for a breakout-retrace and then trend continuation D profile trade.
In the screenshot below, I have highlighted the most significant volume clusters (of the prior day) that may become important resistance zones. This is because we can expect the prior day's 'D' profile was the result of the largest market participants secretly accumulating their positions before manipulating price into a sell off, to turn those very large positions profitable. It is logical to assume that IF price manages to retrace back up to the 'D' profile (after breaking out/trending), those same market participants, and others, will become active again and push price back away.
When price reached the first highlighted High Volume Area (HVA) I was already sceptical of the chance of a rejection as there was obvious strong buyers present. Before we go further, this brings up a really important part of Order Flow trading and trading in general:
While we continue to learn, adapt and strive to get a better understanding of the market in terms of the best confirmations to enter a trade. We must also work just as hard to continually monitor the current market environment but more specifically what is or is not currently working and what characteristics both of these scenarios have!
Reading or watching any classic trading books / videos or even modern trading content from respected traders, one thing is consistently brought up excluding risk management. Traders who fail to indefinitely learn/monitor/analyse their trading and all markets connected to them are bound for failure but more importantly, traders who fail to adapt/evolve to the ever-changing markets will be left behind. Meaning no matter how powerful your strategy, how significant your edge is or how large your skillset, if you don't adapt/change along with the changing market, you will eventually be forced to stop trading.
Now, what made me sceptical of the potential for a rejection of these levels and thus a profitable trade? If you have been following me, you'll see I have been using Price + Cumulative Delta divergence more often over the last few months. This tool has been very powerful in my trading and is becoming more so! This is where I refer to the above discussion on knowing when not to trade and adapting your trading.
As you may know, Price-Cumulative Delta Divergence can accurately predict moments where price has a high probability to turn and follow the Cumulative Delta. There is actually a reason for this unlike your standard divergence indicators, that being, Cumulative Delta is its most basic form is orders coming from either buyers or sellers (positive/negative respectively). So for example, when sellers are jumping in - pushing Cumulative Delta down but price is still rising, there is opportunity and risk that price may soon turn and follow delta!
However here's the first reaction highlighted with the circle in the first screenshot on a 1-minute Price & Cumulative Delta line chart. As you can see, there is no divergence - there is no sellers jumping in. That doesn't mean that price can't still turn, just that it's less likely. I still look for confirmations but it will have to be a complete, aggressive reversal full of large sellers to convince me that price may be peaking/reversing.
Above is the screenshot of the 5 minute footprint chart, unlike the Cumulative Delta line chart suggests, buyers don't appear that strong! Price had even hit a bunch of limit orders and transacted heavy volumes around the rejection point (possible accumulation) however, the last candle had a warning signal present. Next to the exclamation point is, to the best of my knowledge, large passive buyers entering the market and NOT aggressive sellers. This is confirmed by the fact that during that candle, price did not move below these levels. So in conclusion, I didn't feel comfortable entering at this HVA.
Here is the 1-minute Price & Cumulative Delta line chart of the second reaction in the first screenshot. The same thing again! There is no divergence and thus there are no sellers jumping in. But staying consistent, lets look at the 5 minute footprint chart during this period to double check this is the case.
This time there was strong, aggressive buyers present (not ideal for a short trade) as highlighted by the exclamation points. Each bullish candle was supported with a positive Delta (first number below candlestick/chart), reinstating buyer strength. The two bearish candle following the top rejection had imbalances within them (aggressive buyers) and knowing what we have discussed up to this point, I felt it was the better decision to not get involved in selling this market.
That aside, it is still good practise to understand where we would of placed a stop loss had the trade been confirmed. As this was a breakout-trend continuation style trade and not mean reverting, the rules state that bigger stop losses are affordable.
I always try to have my stop loss behind a HVA and placed in a Low Volume Area (LVA) as marked in the above daily Volume Profile chart screenshot. Another favourable aspect to this location is that it is on the opposite side of the prior two day's Value Areas (highlighted green section of each profile), this will add an extra buffer between the entry and stop loss price levels for reasons I will not go into now as I am yet to introduce Auction Market Theory to the thread.
Thanks for reading!
Trade safe,
MM
Seeking Fair Value
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