Order Flow - Achieving the mindset

and where does the order flow trader get out?

Cause you're a good dude and we love reading your posts.

Well in all honesty I don't think that's anything new but insightful all the same as always. I think you're edge will survive another day there lol

I'm gonna be completely honest maybe some people can relate...

Firstly... Am I just too dumb for to be an order flow trader? I don't consider myself a stupid person maybe ignorant sometimes but i have intelligence and if I only knew where to look I feel I could acquire the information I need.

Secondly... If I'm not too stupid then am I just too lazy? Possibly although I am studying at UNI so when I start to study order flow it seems like a second degree in a way... But no I don't believe laziness is the problem or time constraints. If I wanted to, I know I could find the time

Thirdly... Is this shit just too dam confusing for me? Well the question is what shit? I don't know where to turn in the first place. Like that other exercise you gave us to do. Someone gave the tip of going to that forex live site and even after that I still got lost in a bout 10 minutes of what the hell I was looking for.

I mean isn't all that just some guys opinion? (and information sources in general)... What if that site were to go down where do I turn then? What if reliable information suddenly got controlled by someone else and they were deliberately putting out false information, then my "edge" is in the hands of other people and sources. SO maybe paranoia about the whole thing plays a part.

As for doing homework everyday... What can I say I just don't trust the media or anything they say. Who do you trust? Information has to come from somewhere but when half of it is manipulated how the hell do you know whats real? This is sort of paranoia but justified all the same.

So in summary I have taken 1 or 2 what I would consider to be order flow trades in my entire life and they were the most exciting and fulfilling trades I ever took so the desire is definitely there to be an order flow trader so what is stopping me? I really don't know all I know is that its like this thing that just seems out of reach and stops all motivation in its tracks.

So how do I trade? I use charts but I don;t use price action or indicators or trend lines. In a way it feels like order flow but its coming from price data alone so I guess its not. I'm happy with it and its going ok but so routine and mundane I just want to be able to have an intelligent conversation about the REAL market, and its happenings.

Something is just seriously blocking me there, I just don't know

Its not cause I want to make any extra money from order flow trading this of course would be a bonus I just hate feeling in the dark all the time with just price data and want to feel like a real trader

Anyway just thinking out loud - i don't mind putting this out there I never claimed to be some awesome order flow trader, charts are all I have known sadly and breaking away from them is very hard (for me)

Thanks for your post though - I just need to suck it up and get busy if this is what I truly want, I know that. as they say - "Just do it"

ok so I just took this thread back another 4 months lol don't mind me... Carry on

Oh no I even got a sympathy vouch! Thanks Dragan!

Why do you have to break away from using charts? I use them, and I use price action, some form of TA... the basic shit everyone knows.

I think people are looking for the wrong things maybe. Why can't you keep it simple, just have the mindset behind what could be driving the orders, where are the orders/stops, when would this happen, what kind of conditions are we in, etc... This seems good enough to be able to trade consistently in any market as long as you know the structure of the market you are trading well.... the rest is up to you, the main edge is in you and your ability to trade, I believe.

Don't think we NEED to know bank orders and shit from IFR or forexlive... just trade what you see with the right mindset, manage the cash... what else can you do? there's no magic as far as I know. Good to know what can cause movement though so I use all the info I can get from sources such as them, confirm levels and keep an eye on options data and all that but I could trade without it.

Grkfx,

Your homeworks great it really helps.

What I've been trying to figure out is where the orders are and is there any kind of consistency to how there placed.
Example at a swing low there will be Buy limit orders which tend to reflect prices. The Stop losses for these orders will be below but at what depth is unknown for example it could be a previous at a previous swing high or at a set number of pips etc but these Stop orders will tend to accenuate trends.

In theory seeing as we are on the hunt for market moving order flow if we could find the pain threshold of an institutional trader and by using an average position size e.g 5 Million, then we could have a relatively good guess as to where his stop loss would be. If price were to go against him and we knew at what point he'd liquidate at a loss then we could anticipate the impact of his stop on price and trade the price cascade it causes.

After reading the paper Darkstar recommended:

http://www.sec.gov/news/studies/2010...nts-report.pdf

And as DS said to pay particular attention to page 80 on wards, the one thing that stood out to me from all the data given was the depth and density of Limit orders away from NBBO prices. It appears that the further away from the NBBO the thicker the density of Limit orders. There was also a visible correlation between all the examples and the varying depths of the book. This probably explains why the most reliable pin bars like to manifest themselves at extremes sides of the market, or as MQB11 likes to describe it with space. For me the best way to visualize it is by imagining layers of rubber bands above and below price and the further you stretch them the more of a snap back you get.

Anyway I've probably waffled on far too much already so I'll leave you with an edited chart that I created to try and picture the types of orders and where they maybe found. This is only entry orders and there stops and not take profits. To the Order Flow masters please tell me if I'm talking through my A%$.

All the best,

James.

Looking at a chart you can have a guesstimate as to what orders are where but what difference does it make...?

If you have sell limits piled up on a swing high and lots of them does this mean the price will drop when they are hit? No because someone else may take the opportunity to buy a whole lot more as they can now purchase the big sizes they want to that they otherwise couldn't

Same goes for sell stops under a swing low.

As for finding out where a big guy has his stops... Sure in a perfect world but if you know this chances are half the world knows this. Also chances are hes hedged in some other market and hes not going to place a stop loss above the most recent swing high/low like your average retail trader..

I think a better approach would be knowing that a big guy needs to find liquidity (to get out or in) and therefore, when the stop hunt is on you can take advantage. Much like GRK's picture on the last page.

Just thinking out loud again

Heres something I read in mind over Markets by James Dalton.

Roger von Oech, author of

A Whack on the Side of the
Head, challenges the power of "the rules."
. . . there is a lot of pressure in our culture to follow the rules.

This value is one of the first things we learn as children. We
are told, "Don't color out-side the lines," and "No orange
elephants." Our educational system encourages further rulefollowing.
Students are usually better rewarded for regurgitating
information than for playing with ideas and thinking of
original uses for things. As a consequence, people feel more
comfortable following rules than challenging them.
Challenging the rules is a good creative thinking strategy,
but that's not all. Never challenging the rules brings with i t . . .

potential dangers.

This is why I think we have to challenge the information given on charts. If we don't challenge it we may never know what we missed.

The chart I posted was just one I had to hand and so its just to try and help with the bigger picture. A lot of the information that DS told us to concentrate on in the pdf I linked in my last post I think is very crucial. From what I can see from the charts shown in the pdf most of the liquidity seems to be outside of the normal operating range of price. Take a look at the pdf and you'll see what I mean. Seeing as the order book is the main thing missing from not having a central market place I'd say that having a good idea of what a snap shot of it would look like is pretty important.

Hope this helps.

James.

James/Redbaron,

What is the DS pdf link again? I can't bring up the one you wrote before.

http://www.sec.gov/news/studies/2010...nts-report.pdf

I've also edited the address in my previous post.

Ok. Thank you very much. So it was page 80 onwards?

Correct.

Thanks Red.

Read the whole thing, you won't get as much from it by just reading the end.

Yeah, Eurotrash. I have already begun reading it all. When I started perusing it ..it all looked pretty interesting and educational...especially for us order flow students. So I'll definitely be reading it in its entirety.

http://www.forexlive.com/171870/all/...efore-use-them


A very good article over on Forex Live on Barrier Options.

Yeah thats a great point.

We need to find out what is/are the biggest market moving force (outside ur charts) in the "present" and and will/could be in future. So sometimes its Inflation so you would see any inflation related data whether its red or yellow will impact the market than after six months it may not be the case cause than there would be something else driving the markets.

So its a changing cycle and u have to keep up with with it cause it if you could know whats moving the marts before someone on TV tells you about it 1 month later,... it could do wonders for your trading accounts.
.

holy crap...http://www.forexfactory.com/images/icons/icon3.gifhttp://www.forexfactory.com/images/icons/icon3.gifhttp://www.forexfactory.com/images/icons/icon3.gif

I know you talked about options barriers here but I did not understand at the time.
Thanks for the article...a real eye opener for me...this will get me further in my pursuit of knowledge...

again thanks

After reading an article at the ACM News Desk on a Head and Shoulders formation on the Hourly Period USDCHF Pair Chart I checked out the Day Chart on the Same pair since I have an open trade on it and found what seems to indicate a convergence of solid signals that a solid reversal trend in the up / long / buy direction is starting as shown below:

Not all of the indicators are yet in agreement, (I use the W%R, Stochastics, a Money Flow Index related to the RSI, a custom Trend Indicator, and Up/Down Volumes, along with SMA Bands), but the price movement is there and are moving along the Fibonacci levels thereby now forming the beginning of a channel on the day chart. I thought it interesting and thought I would share. Enjoy.

These guys here are more interested in your Stops than you entries.

Ur warned.
.

I dont know how much it contributes to this thread but for whatever its worth.

http://www.zerohedge.com/article/if-...ir-trade-ideas
.