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  • #241
  • Aug 31, 2009 8:51pm Aug 31, 2009 8:51pm
Quoting StoragePro
What is most important regarding this lengthening thread?

Where price stops and reverses.

That is the foot print of order flow. That is about all you have to know.
Yes, price reversal is why it's important, but that's not all you need to know.
A foot print is something left behind after a step has been taken.

The trigger for taking the trade is what's important.

That's what people are searching for and why this thread is so long.

All signals operate on 2 variables lining up. MACD on a moving average cross, VSA on volume spread comparison.

One without the other is not a strong enough signal to enter a trade. So, once you understand what the variables are that you're looking for, it becomes a highly effective tool.
  • #242
  • Sep 1, 2009 2:05am Sep 1, 2009 2:05am
Quoting Fudomyo
Yes, price reversal is why it's important, but that's not all you need to know.
A foot print is something left behind after a step has been taken.

The trigger for taking the trade is what's important.

That's what people are searching for and why this thread is so long.

All signals operate on 2 variables lining up. MACD on a moving average cross, VSA on volume spread comparison.

One without the other is not a strong enough signal to enter a trade. So, once you understand what the variables are that...
I hope you were talking metaphorically in your MacD example. But I do notice you like your 55 ema, so maybe not. This discussion goes way beyond indicators and even price action itself although pa should be included as an important element imo. But essentially we are looking for clues before the foot print has even been created. Getting in with the making of the foot print (the invitation) is what's important here, not after the fact. Why? Because this minimises our risk and boosts the probability of the trade working out.
  • #243
  • Sep 1, 2009 2:23am Sep 1, 2009 2:23am
Quoting Scotty B
What we really need is access to the EBS and Reuters orderbooks. I am finding that is not going to be easy though. With the Dukascopy orderbook we have a small stream that flows into the broader interbank 'river.' We need to get to the place where all these streams converge.

Ah yes, the sweet land of milk and honey!

I'll have a pint of whatever you've been drinking please.....
  • #244
  • Sep 1, 2009 4:20am Sep 1, 2009 4:20am
I'm finding this thread very much like sex, it's most enjoyable but I find myself requiring a cigarette after every page.

"I made all my money by selling too soon"
  • #245
  • Edited 4:52am Sep 1, 2009 4:28am | Edited 4:52am
Quoting Bleek
I'm finding this thread very much like sex, it's most enjoyable but I find myself requiring a cigarette after every page.
Lol.

Live chart attached for comments/thoughts.

Buyers have been liquidating their positions at 0.8450 for the last month and we're now approaching a significant level around 0.8330 where i would expect to see a cluster of buy orders.

Where's the smart play?

Attached Image (click to enlarge)
Click to Enlarge Name: aussie.gif Size: 29 KB


Addition: As a further thought/observation, buyers of sterling yesterday across most pairs seem to have taken their profit this morning, triggering a sell-off (which is good for me
  • #246
  • Sep 1, 2009 5:39am Sep 1, 2009 5:39am
"Trading and Exchanges: Market Microstructure for Practitioners" by Larry Harris

Darkstar probably said it best.
This book and a lot of time thinking are all you need.

So that tells me there is something in microstructure outside of the market that can be exploited. ScottyB is on the HUNT!

Some thoughts I had (scary), was let's take a corporation like Coca Cola with world wide operations. They have to convert back to USD. Now how much do they transact and when? enough to even matter?

Maybe it's something bigger like Central banks. If the US Dollar is the reserve currency then I'd imagine all the banks need to keep a certain amount in reserves and when those levels fluctuate they need to balance it.

Commodities are sold in US Dollars so maybe that is another avenue to explore. Bonds? Options? Tbills? China?


My book shipped, so I eagerly await.

good trading to all
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #247
  • Sep 1, 2009 5:40am Sep 1, 2009 5:40am
Quoting Fudomyo
hahaha thanks!

MACD was a metaphor for the trigger. I don't use MACD, but I am learning VSA.

And I do like the 55ema at times. It's what floor traders look at, so I want to see what they're seeing because it's an imortant psych level. I make my living trading so I use the tools that make me money. No shame in that.

I understand that this discussion goes beyond indicators.

I figured out how it works, so I posted to thank skfx, that's all.

Anyway, I took my first live trade today based off of price orderflow on the GY in the London session...
Well thanks for your really great input. I am sure you are profitable using your methods, as is Dan, and so are many of us doing the digging here. I don't need to know more than I know because I am profitable. It does not mean we cannot explore the issues in greater depth.

Knowing something is one thing. Explaining it is another. So please lets not have more people coming on saying how wonderful and profitable they are and that THEY 'KNOW'! We all fOOking know.Trading is a NO Brainer most of the time. Which makes trading a brainless pursuit.

The purpose of this thread is to explain and explore what we know and that is taking our understanding to another level. If you cannot contribute to this greater understanding then go and join the knobs on the interactive threads where you will be welcomed like a hero for making 'no brainer' trading decisions.
  • #248
  • Sep 1, 2009 5:45am Sep 1, 2009 5:45am
Quoting Fudomyo
Anyway, I took my first live trade today based off of price orderflow on the GY in the London session and made 105 pips. (I had to get out of the continuing trend down because I have strict rule never to trade news.
This looks to be a standard SR trade to me, not a trade based on order-flow. How did you determine the orders at that level? Were you using market depth analysis?

I can't see any evidence of stop hunting on any of the time frames. True, I don't have access to see orders at particular levels but I don't understand your reasons for your statement of orderflow here.
  • #249
  • Edited 6:14am Sep 1, 2009 5:54am | Edited 6:14am
Quoting Porkpie
The purpose of this thread is to explain and explore what we know and that is taking our understanding to another level. If you cannot contribute to this greater understanding then go and join the knobs on the interactive threads where you will be welcomed like a hero for making 'no brainer' trading decisions.
Porkpie, The more I read your posts, the more I see myself becoming you in a few years time... (hope that didn't sound gay... not that there's anything wrong with that... no angry voices of homophobic nature either inverted or extroverted please... I mean no offence).

Just for clarification then... Scotty B looks like he will be joining the ranks of the stop hunters in the fact that he is looking for orderflow to dry up and then take price further (higher or lower of the opposing intermediate trend).

Where do you stand in this? Would you be looking at orderflow to dry up and then as PipMutt and I seem to agree, we wait for the stop hunt to finish (or at least appear to finish) and then join the original trend direction? Obviously, to do this we would be 'lagging' and not leading price.
  • #250
  • Sep 1, 2009 5:55am Sep 1, 2009 5:55am
I have no interest in debating historical 'here's one i made earlier' charts, so...

Euro approaching 1.43. Again, i would 'expect' buys to be triggered at this level, but is that the smart play? Fundamental trend is up but i think there may be an opportunity to profit from the herd mentality here.

Again, comments and open discussion welcome/encouraged.

Attached Image (click to enlarge)
Click to Enlarge Name: euro.gif Size: 31 KB
  • #251
  • Sep 1, 2009 6:19am Sep 1, 2009 6:19am
Quoting AstonDan
Euro approaching 1.43. Again, i would 'expect' buys to be triggered at this level, but is that the smart play? Fundamental trend is up but i think there may be an opportunity to profit from the herd mentality here.
Attachment
OK, follow up: Price paused just beyond 1.43/on the ascending trendline as you may reasonably expect. Is this a cluster of buy orders? Shorts taking profit? Are you looking to enter long?

I would expect triggered long order stops to be around the thick red line, so what would a manipulater do? Take them out for a better price long?

Apologies for the all the question marks, i'm not preaching but digging and i could be completely wrong (i often am)

Attached Image (click to enlarge)
Click to Enlarge Name: euro.gif Size: 28 KB
  • #252
  • Edited 7:53am Sep 1, 2009 6:32am | Edited 7:53am
Quoting Limstylz
This looks to be a standard SR trade to me, not a trade based on order-flow. How did you determine the orders at that level? Were you using market depth analysis?

I can't see any evidence of stop hunting on any of the time frames. True, I don't have access to see orders at particular levels but I don't understand your reasons for your statement of orderflow here.


yes, you do have access. you just need to know what you're looking for.
sorry. I don't mean to sound cryptic, or just show up and say, wow, look how great I'm doing. I was responding to a rather condescending post about my inability to grasp what this discussion is about. Initially, someone said, the orderflow footprint was all you needed to know, and I was clarifying a point.

Stop hunting can operate on a spike or a fast move up. Granted the hair doesn't support a classic spike on the trade I took, but the price move was very rapid and the underlying principle held. This can wipe out stuck money, so operates on a similar premise of freeing liquidity. ( correction: the GY was correlating with the USD/CHF, which did spike like a classic stop hunt. I was watching multiple priceflows, I was trading the GY but was paying attention to the USD/CHF priceflow because it was leading the market at the time. I noticed my pair stack order when I went back, that I had the USD/CHF on top, not the GY.)

The readings supported my hypothesis about how this works, so I took the trade. Not every situation is going to perform exactly the same or be text book perfect. And I made a point of trading off of what I was seeing based on the trade orderflow information. It wasn't just seeing that the PA was reaching resistance and taking a trade. I saw the setup was right in advance, and then the priceflow confirmed it. Its actually quite brilliant to see it in action. I am still testing and am not going to throw away my core system yet, but this has changed the way I trade and what I'm looking at for the better.

Anyway, I didn't post here to get pulled into a debate. Just to thank skfx, which I've done, so I've leave you in peace.

I honestly think puzzles are fun, and skfx intentionally set up the thread this way so people could enjoy themselves and learn things trying to figure it out. I doubt he'd even confirm it if you did figure it out!

You guys have been involved with this a while, so it would be like someone just showing up out of nowhere and telling you the end of a movie you're watching. It would be a shitty thing to do.

If think it would be great if everyone who gets it, doesn't reveal it, then many other people would take the time and concentration to figure it out too.

just a thought.
  • #253
  • Edited 6:53am Sep 1, 2009 6:42am | Edited 6:53am
Quoting Limstylz
Porkpie, The more I read your posts, the more I see myself becoming you in a few years time... (hope that didn't sound gay... not that there's anything wrong with that... no angry voices of homophobic nature either inverted or extroverted please... I mean no offence).

Just for clarification then... Scotty B looks like he will be joining the ranks of the stop hunters in the fact that he is looking for orderflow to dry up and then take price further (higher or lower of the opposing intermediate trend).

Where do you stand in this? Would you be...
Lol, thanks Lim. I thought we were both on the same level. Always learning.

The way I see it is that order flow is reflected in price. An imbalance of order flow shows buyers dominating sellers or vice versa. This shows up on a chart as true support/resistance. What usually happens is that some big traders get left behind at these levels and when price returns they are waiting at these levels to jump in where they missed out before. Also, as already discussed, sometimes large orders are broken down into smaller orders and triggered repeatedly every time price returns to the same level ( until exhausted and then usually the support/resistance area is too weak). So that is a simplistic view of why these true areas of supply/demand are often good entry levels.

These SD levels are turning points. Sometimes the market will tank up through these levels because it entices buyers into the market creating liquidity for shorts, perhaps triggering buy stops in areas of supply. The buyers will be buying from the more powerful sellers at these areas that previously showed supply exceding demand.

So to answer your question, because I do not work with exact levels to buy or sell I work with supply and demand zones which allow for flexibility in stop hunting tactics. The zones I use also allow me to know my risk before hand against the likely profit level (the next SD level), as I will know where my entry will be in relation to my stop loss and the potential profit target for each trade.

So depending on how strong the short term trend is for a particular currency pair I would either wait to see what price/volume will do within those zones of Supply/demand or I would set my trades up with a limit order at these levels. It all depends on what the market is doing at the time and how the market reacted at the origin of the move that created the SD level in the first place, that now creates the zone for entry.

If I had order flow data, that would be useful in telling me the strength of that zone from simply looking at the levels of buyers and sellers and the size of their orders. I wouldn't look at order flow in any other areas of the chart other than at these SD zones. But I might keep an eye on it to ensure my trade was going to make it to the next SD zone target level. Sometimes (rarely), price would gallop through my SD zone and stop me out and then reverse in my direction. When this happens I just wait for price to get me in again at the lower part of the SD zone. Order flow data would probably be very helpful in stopping these rare occurences taking place.

Sometimes it is important for me to just set and forget as often price will reach a SD zone, and take off in my direction in a split second. Hence the need to be quick on entry at these levels (usually with a limit order).

So in sum, I place great importance on these SD zones as areas of price reversal. From the discussion I can summise that order flow data might trick me into thinking price would go straight through these areas due to stop hunting and limit order triggering on the other side of these zones which are used to supply liquidity for entries in the opposite direction. But when price lingers in these areas, using order flow information would give me greater certainty of the strength of these SD levels. My entry levels are pre-defined by SD zones based on previous price action. Order flow will simply give me certainty at the levels but will not be giving me an entry signal in itself.
  • #254
  • Edited 6:55am Sep 1, 2009 6:45am | Edited 6:55am
Quoting Fudomyo
yes, you do have access. you just need to know what you're looking for.
sorry. I don't mean to sound cryptic, or just show up and say, wow, look how great I'm doing. I was responding to a rather condescending post about my inability to grasp what this discussion is about. Initially, someone said, the orderflow footprint was all you needed to know, and I was clarifying a point.

Stop hunting can operate on a spike or a fast move up. Granted the hair doesn't support a classic spike on the trade I took, but the price move was very rapid and the...
Ok, thanks. Peace

But I am sure those getting it would have interpretations in how they get it and how order flow info is used.
  • #255
  • Sep 1, 2009 6:49am Sep 1, 2009 6:49am
Quoting Porkpie
Lol, thanks Lim. I thought we were both on the same level. Always learning.

The way I see it is that order flow is reflected in price. An imbalance of order flow shows buyers dominating sellers or vice versa. This shows up on a chart as true support/resistance. What usually happens is that some big traders get left behind at these levels and when price returns they are waiting at these levels to jump in where they missed out before. Also, as already discussed, sometimes large orders are broken down into smaller orders and triggered repeatedly...
'Why' indicates knowing the reason something should happen, and the reason 'buying' or 'selling' isnt enough IMO.

'WHO', you need to work this out before you can find out why.

All IMO.
Living the adventure in my head.
  • #256
  • Sep 1, 2009 6:50am Sep 1, 2009 6:50am
Quoting Porkpie
So in sum, I place great importance on these SD zones as areas of price reversal. Order flow data might trick me into thinking price would go straight through these areas due to stop hunting and limit order triggering on the other side of these zones, but when price lingers in these areas it would give me greater certainty of the strength of these levels. My entry levels are pre-defined by SD zones based on previous price action. Order flow will simply give me certainty at the levels but will not be giving me an entry signal in itself.
Sure... I get where you are coming from now. Its no different from the way we currently trade SD, just gives a better certainty to trade setups.

I guess I'm looking at this thread in two ways. To confirm a current setup as just mentioned and to view potential stop hunting tactics to avoid, rather than be in on...

Pleased that I am on the right lines at least, even if I don't have the full picture yet.
  • #257
  • Sep 1, 2009 6:51am Sep 1, 2009 6:51am
Quoting Fudomyo
yes, you do have access. you just need to know what you're looking for.
sorry. I don't mean to sound cryptic, or just show up and say, wow, look how great I'm doing. I was responding to a rather condescending post about my inability to grasp what this discussion is about. Initially, someone said, the orderflow footprint was all you needed to know, and I was clarifying a point.

Stop hunting can operate on a spike or a fast move up. Granted the hair doesn't support a classic spike on the trade I took, but the price move was very rapid and the...

Hello Fudomyo and thanks for posting. Just let me say big Kudo to you to have found the key of how using order flow. That great i am truly happy that you found it.

I agree with you, that in order to respect the direction of the OP thread intention, if we solve the puzzle, we should not really reveal it here but only give some hints to help others dig deeper until they found it. ( I am still in that category but seeing it more and more clearly though).

I also do use VSA in my trading methodology which is, for me, near as it can get to see intentions of big players and trade accordingly.

I am still trying to figure out how those successful order flow trader can trade without a chart but will find it at some point.

Shreem
  • #258
  • Sep 1, 2009 7:02am Sep 1, 2009 7:02am
Quoting Fudomyo
yes, you do have access. you just need to know what you're looking for.
sorry. I don't mean to sound cryptic, or just show up and say, wow, look how great I'm doing. I was responding to a rather condescending post about my inability to grasp what this discussion is about. Initially, someone said, the orderflow footprint was all you needed to know, and I was clarifying a point.
I saw that trade myself using simple SR so maybe it isn't the best example of trading with order-flow. Regardless... You think you have it... Well done to you!
  • #259
  • Sep 1, 2009 7:06am Sep 1, 2009 7:06am
Quoting shreem
Hello Fudomyo and thanks for posting. Just let me say big Kudo to you to have found the key of how using order flow. That great i am truly happy that you found it.

I agree with you, that in order to respect the direction of the OP thread intention, if we solve the puzzle, we should not really reveal it here but only give some hints to help others dig deeper until they found it. ( I am still in that category but seeing it more and more clearly though).

I also do use VSA in my trading methodology which is, for me, near as it can get to see intentions...
As Merlin has already stated in another thread. Order flow is useless without the 'tape'. Reading orderflow without charts is possible if you can read the tape. Tape reflects orders being executed and charts show the history of the tape action. So you can use order flow without the charts but why use the tape if you can use a chart?
  • #260
  • Sep 1, 2009 7:14am Sep 1, 2009 7:14am
Quoting Porkpie
As Merlin has already stated in another thread. Order flow is useless without the 'tape'. Reading orderflow without charts is possible if you can read the tape. Tape reflects orders being executed and charts show the history of the tape action. So you can use order flow without the charts but why use the tape if you can use a chart?
Love your signature...
Living the adventure in my head.
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