Order Flow - Achieving the mindset

You're welcome, Tilt. Here's a few more....they're particularly insightful ..especially on order flow beyond the charts, etc....which is what this discussion is all about...

http://www.forexlive.com/166149/all/...ong-offersbids

http://www.forexlive.com/169599/all/...-gun-for-stops

http://www.forexlive.com/167451/all/...et-positioning

http://www.forexlive.com/165798/all/...-and-liquidity

http://www.forexlive.com/171875/all/...onth-end-flows

No, you are not dumb. Anyone can be an order flow trader starting from scratch. As for where to look, that is what I have been trying to do with my posts. I have tried to help people develop the mindset and to find the different types of order flow trades.

I learned from Darkstar's posts. So you guys should review them again, they truly are the best. Chances are people missed many nuggets of value, but you cannot interpret some of them until you have progressed in the order flow mind by a little bit.

In the beginning it was very confusing for me. Information overload was what I was suffering on a daily basis for like a few months. But it was a good type of information overload. Although you do not realize it until much later.

Yes it is hard in the beginning, just like anything else is. I had spent around 2 years failing in forex before I discovered order flow. I suppose I could of quit, after all 2 years and countless hours spent with nothing to show for it is pretty harsh. But you need to pick yourself up and get back into the game.

I then spent around 10-12 hours per day consistently for around 6-8 months before I saw any results. Of course you need to spent time and work hard on the right things, on the smart things. So that was a further time commitment of 2,000 - 3,000 more hours. That it obviously on top of the previous 2 years spent. If I quit after those 2 years, or before I completed those extra 3,000 hours then I may have failed. Some people can learn faster, other people it takes longer. But if you really want it badly enough you will find a way.

I am not saying it to toot my own horn. There are other traders going through the same process and I just want to help them along and know that they were not alone in going through the process. Becoming an order flow trader can feel very lonely at times as very few other people can understand your mindset or truly understand what you see about the market. Your friends and family may think your crazy for falling for the whole 'become a trader thing'. You may also talk to some of your trader friends and they tell you about this trade they had, where the moving averages lined up, or they are trading this killer forex robot, etc. You may question yourself as it just doesn't line up with the order flow stuff you are doing. You may question yourself because sometimes there is this nagging little question about, why isn't everyone else doing this? Am I the only one who can truly do this order flow stuff? You may think that because you are the only one that understands the stuff that you are wrong. So you have those emotions and psychological problems to fight as well. Only after you become an order flow trader do you realize that, yes they are truly a special breed of traders, each unique in their own way, and yes, very few people understand their mindset and what they know. That is just the way it is and how it will always be no matter how much I try in this forum.

As for the information being some guys opinion. Yes it is always reported to you by someone. It could be an analysts, a reporter, someone at forexlive, etc. They can each have their own view of the information. It is up to you to figure out what is important and how to use it in trading. Everyone interprets things differently. The only thing that matters is that your opinion, and your trades match the order flow that will be generated. Each individual trader is the only person that can do that.

I think you are too paranoid about information sources being controlled and manipulated. There are credible news sources out there. But they cannot make you a good trader. You need to interpret things correctly and know how to use the information. Only you can do that.

Let them try to put out false information, or rumors, LOL. Once you've been at this game for a long time you can pretty much know fairly quickly was is true and what is not. Or you figure out ways to confirm the information that you are getting. You can't be 100% accurate, but you can do very well for yourself.

If they try to put out false information, your order flow 'sensors' within your own mind and body will tend to pick it up (I know it sounds weird). Then you can run that false information through your order flow mindset and play out different scenarios about what is the best way to proceed. About whether to fade the information, whether to wait a little bit, whether to stay out, whether to just take the day off, whether to just ignore the information and go back the things that really matter.

It doesn't matter if those news sources went away tomorrow. Others will sprout up. As long as you have achieved the order flow mindset, and placed many profitable trades. you already you know what to look for. No one can take that away from you. You just may need to find other sources of information to help you. If you want it badly enough you will find another way. It may even be easier.

Order Flow trades and success are replicable indefinitely into the future.

Or just go here:

http://www.forexlive.com/category/fo...stions-answers

For those that don't already know they also give info on talk of stops, limit orders, barriers, which central banks and other big guys are seen or rumoured to be in the market etc and site is free. I prefer this site more than IFR, although i look at both.

Note: when looking for order info just read the first couple of pages of the home screen, it's not always in the 'order' section

Haviana,

Where do you get IFR info. from? I see it on some MT4 platforms under the news tab. Plus Oanda, I think. Was just wondering if there was a direct source.

I get it through Oanda, i think to get it direct source you will need to pay for it, think this is the site:
http://www.ifrmarkets.com/home

IFR Markets?? Slow on the feed... CQG shows depth of market, but pricey.

Plotting orderflow on charts.. that would be helpful! I've built an indicator that does it, but it ends up being so consuming of overhead for a chart to update at the rate of depth changes. Some other method would be nicer.

ShopperX: As your chart is of no benefit to achieving an order flow mindset please respect the rules that Carnegie set when he started this thread. If I may give you a suggestion try taking all those lines and indicators off the chart then have another look.

ajt1970: IFR is from Thomson Reuters but I think it may still be available by setting up a demo account with Oanda.

Good luck,

James.

Red, Havaiana, and Rockshore,

Very much appreciated. Thank you. I am really gearing my tradi ng methodology towards order flow info., etc. from sources like these....market depth and tapereading on futures, and other things of this nature. Charts...they don't do much for me except possibly tell me where large bids/offers/stops might be from retail clients.

Excellent discussion on this topic. I'm really looking forward to Darkstar's upcoming book as well. That should explain and clear up a lot.

I finished Trading and Exchanges and learned what I can from it ...for now. I'm sure the more I go thru it multiple times, the more it will make sense. My ony thing is implementing market microstructure into a real tradeable strategy....the specifics. But I am working on it.

I think everyone on here could do with reading all Darkstars posts, there are so many little clues, and I'm on my secound time round!

Quote:
Originally Posted by JosTheelen http://www.forexfactory.com/images/buttons/viewpost.gif
The question is whether retailtraders have the same orderflow as the big guys.


"Thats my point. As a retail trader you have only what is provided by the moneycenter banks through IFR and related services. You won't ever have access to the real orderflow because you don't have orders that your managing for other people and there is no central exchange. I suppose you could get a job at a bank, but then you would be trading "their" accounts and that would defeat the purpose.

As a retail orderflow trader you can't take the type of trades a bank does so their winrates are all but irrelivant. Most of their orderflow trading consists of specific trade frontrunning which is a high probability methodology.

Our only option is to look for concentrations of liquidity and make assumptions about how prices will respond to those concentrations based on our understanding of market microstructure. Liquidity is liquidity and prices always respond to it in the same way. All we need to do is find those concentrations and watch what happens when they are encountered. See what happens enough times and you can develop a simple methodology around it. Once you understand the mechanics you don't even need a chart."

Second time only? I must of gone through them like 1,000 times.

Yes.. retail traders have the same orderflow data as the big guys..

I too went through them at least 100 times.

If today something happens and I miss it, I go back and try to find out what could have given me the tip on it, why did it act that way.

What I do believe is reading those news feeds and watching whats going on, and how the market reacts and experience will go a long way if you just keep trying to developing the mindset... orders drive the market. It can only help your trading big time to keep in line with whats going on in the market, rumors, orders, stops, options info, etc. This is how I feel you survive in the long run... and why a system that will work today may not work tomorrow or a year from now, because tomorrow is different then today.

and btw, on cable last night, there was info that pretty much gave you money about 15-20 minutes before it happened. stop hunt...

hey rockeshore

i was talkign with garry fullet the cme broker and wyckoff expert and he tells me that cqg is better than esignal
esignal has errors in their volume,he says

trading without marketdepth is like putting a cap over ur eyes and tying to cross the street
but in marketdepth,traders can iceberg,and make 100's of orders look like 1,
one disadvantage

quote...

"Yes.. retail traders have the same orderflow data as the big guys.. "


are we talking about futures here?

u can see in futures but not in spot forex

CQG is better.. I'd never suggest esignal. its only indicative pricing... CQG though is a bit latent.

No I'm not talking about futures. I'm talking about aggregated spot book. showing global depth and orderflow. Nobody's produced it.. that is until I designed one.

how can u see the fx order book
if the market is not centralised

im looking at euro futures orderbooks,theres more buyers then sellers ,and the market still tanked 20p,on german balance 11b
theres too many things affecting the price of currency,
and we cant see the big guys orders,only retail ones,and as darkastar mentioned retail orderbook is not true orderbook


as medici mentioned,u need to have someone in big dealers and hedge funds to tell u wats goin on,but sometimes u cant even trust them

i would say if anyone wants to trade with full order book,they would need to trade stocks and pay 100s of dollar on exchange fees

but i heard goldman paid 200m in fines for not reporting couple of big trades to the sec,so....

You don't need to see an order book, period.

Monroe,

I 100% agree. Even though depth of market may help a little for the entry Time and Sales is whats really required. Without having any record of the orders thats already been made theres no way of seeing the buying/selling side pressures which can predict a move. I'm not a level 2 trader (yet) but from what I've seen your looking at the tape to see large bid/offers being absorbed until theres an imbalance.

The more I look at Forex the more I think liquidity plays a far more important role. Think about it if your an Institutional/algo/hedge and you have put a large order in your looking for cheap transaction costs. From the information I've seen regarding how Algos trade there all designed to hunt liquidity out.

http://corp.bankofamerica.com/public...ets/agencyalgo

If we know where the liquidity pools are then we can monitor them for action and when it looks like its being used fade it. Is it just me or has anyone else noticed that on the lower time frames we see these spikes poking up/down well away from where price has been trading followed by another one a few mins later?

I am thinking about starting up an order flow picture thread where we can posts our observations but I'm afraid it will just get all screwed up by people without the same mindset as we have.

All the best,

James.

From a post of Darkstar,

Now thinking along the same lines we know that BoE will not increase rates today. But we also know that given inflation they are facing,... a rate hike is inevitable but it could be a little late maybe after ECB hikes first.

If above two assumptions are correct i.e

1- They will not increase rates today

2- But they will have to soon

(Now what i am going to say is will take a lot of effort to put words out of my mind as i see them)

we could have a window opening today that will enable us to get in the market in anticipation of actual outcome that is inevitable. I dont know if i could call it mispricing or not cause i think mispricing could only be there for some seconds to mins. But this scenario could last from a minute to weeks.

It all depends on what people expect. But most probable and tradable scenario that i can imagine is,

Offcourse a no rate-hike scenario would not be a shock to the markets so price may fall down some 40-50, taking out Stop's and than spike back up and than stall for some time until another event happens that signal more strength to a rate hike so price would go up and make new high's. Now this could be a case of mispricing that would last from some seconds to mins and this where a OF trader could get in in anticipation of actual outcome that would eventually take price back up in near future but he may have to suffer through the daily swings as market keeps pricing in every probability along the way until the actual come happens.

Now i thought is all in the bathroom without a chart so u can call it a piece of shit.
.

I would enjoy such a thread.

The one thing I can think of that could help us here is the fact of using the flow info we can get, which tells us where bids/offers/options are or rumored to be (and who is behind them) and watching the price action there or anticipate a reaction to that liquidity.

Regarding what nasir is saying... I think what you're talking about is longer timeframe sentiment arbitrage type of thing. It's the same mechanics behind it all from intraday to longer term, just different levels of play.

If sentiment always lines up with current price, you have to have a good grasp of what will likely happen or play out in the future with what is effecting currency right now. It's all the time being discounted so you have to get in before and have a good feeling about your analysis. then use market mechanics that we have been discussing here with stops hunts, etc for your entry.

For instance, there were rumors of high inflation and a rate hike, that got us up above 1.40, after the rumor, it's sell the fact... take profit.

Markets are forward looking.

And this is how I am seeing it at this point.