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Order Flow - Achieving the mindset

  • #1,301
  • Apr 9, 2011 6:06am Apr 9, 2011 6:06am
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  • #1,302
  • Apr 9, 2011 8:54pm Apr 9, 2011 8:54pm
I don't scalp or trade news, I don't follow this methodology, and I don't belong to the service. BUT I'm putting this on here because Boris says he trades 'flow' and it appears a valid way to trade order flow of round numbers and news. He basically takes trades between the levels 00 25 50 75 and then 00 again. Not an endorsement, but just how some other people are using order flow to trade that may or may not help or give someone an idea of one more way to trade flow. His cohort Kathy also trades order flow, but on a longer term more fundamental level. I like reading their articles, but again I don't trade their way.

Hope some find it useful and it would be interesting to hear what 'order flow traders' think of this type of trading as well.

.
Inserted Video
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #1,303
  • Apr 9, 2011 10:06pm Apr 9, 2011 10:06pm
Quoting CindyXXXX
If you guys aren't careful this shits gonna end up in the interactive traders thread...

Why you so keen to bump this goldmine ?I recon close this thread... What more needs to be said?
Seriously, stop bumping up the thread. The more people continue to post in this thread, the closer you guys get to figuring all this stuff out. The longer this thread goes on, the more I get goaded into posting more and more.

I am starting to get scared some of you guys might take my liquidity...

I guess I should of thought about that before I made all my posts. Stupid me. I bang my head against the wall everyday now.


Private message me for a link to my order flow website.
  • #1,304
  • Apr 9, 2011 10:15pm Apr 9, 2011 10:15pm
Quoting grkfx
Seriously, stop bumping up the thread. The more people continue to post in this thread, the closer you guys get to figuring all this stuff out. The longer this thread goes on, the more I get goaded into posting more and more.

I am starting to get scared some of you guys might take my liquidity...

I guess I should of thought about that before I made all my posts. Stupid me. I bang my head against the wall everyday now.

  • #1,305
  • Apr 10, 2011 12:47am Apr 10, 2011 12:47am
Quoting Tilt
Nasir that's very interesting point of view that I have never heard of before.
Thank you for expanding my horizon
But now I have a problem...trying to think what my strengths are,and I don't think of any
Could you give an example of that....to se what actualy are strengts in trading. Cuz weaknesses,i know what they are.

Regards
Yeap. The more you are cognisent with WHY you are entering a trade, the more objective you become in terms of working that trade for its profit potential, seeing the weak and the strong moves as they unfold. It's in those instances where greed never features.
The road to pipland is arduous and fraught with challenge.
  • #1,306
  • Apr 10, 2011 8:34am Apr 10, 2011 8:34am
Quoting grkfx

I am starting to get scared some of you guys might take my liquidity...

I guess I should of thought about that before I made all my posts. Stupid me. I bang my head against the wall everyday now.


Some of you guys really crack me up....
He was looking for the card so high and wild hed never need to deal another
  • #1,307
  • Edited 1:27pm Apr 10, 2011 1:09pm | Edited 1:27pm
Grkfx,

Been looking back on your posts recently which sparked a few more areas of interest. From what I've seen from various websites the major use of forex is for speculative purposes. So from what I can see these guys will be keeping an eye on the Economic releases, Geopolitics etc which is much the same information that everyone uses.

Now going from what you've said in various posts about trying to learn what drives the market intra day the major participants are only going to trade as the information available to them is interpreted and new ideas about the value of a currency becomes priced in.

I noticed that you wrote this about a question a poster had about an Australian release:

Quote:
Originally Posted by gummy101
Hi guys,

Can anyone tell me why was there a dip in AUD/USD after the release of the Australian home loans news today even though the data was actually very positive.

Well. There are a few possible explanations.

1. The market was pricing in a much higher number than the 1.9% even the though the forecast number was 0.7%. As such when the 1.9% number came in it was at or below the expectations resulting in the down move as the market was disappointed. The report needed to be a monster report to move the aud/usd.

2. The market did like the 1.9% jump in home loans BUT, with the AUD/USD already up 300-500 pips from last week, a lot of the people already covered their shorts/and or are already long aud/usd so most of the bullish order flow that you expected was already sucked out of the market from last week. The market may just need to rest a bit before another bullish move.

3. The third and last potential explanation is that the market's sensitivity level to that particular news was very low. This means that the market did not care about the report. Meaning that it did not generate any order flow, meaning that any movement following the release of that report was just the "noise" of the market and not related to the release of the report. You just just as easily been oblivious to the report and would have been fine.


Now which of the three categories the report falls into I will let you decide.

Now I would say that it could have been anyone of these reasons however the one that stood out to me was number one. I'm not really certain about how I could use this to generate an entry idea but it certainly could come in handy. If we saw the market react in a negative way to what would could be classed as a positive release then couldn't we say that the Specs had high expectations but they had overestimated on how strong the pair actually was. I hope I've explained this clearly. Another example may be where we have several sets of negative results ie worse than forecast but the market fails to move on them. This could be a sign that the bigger players may have different opinions about what would normally look weak and has priced this in for this already. Now if you take the latter in context if everyone took these results as negative for a pair then this would also mean that the specs would have lots of people providing the liquidity needed for them to open a large long position.

Someone said somewhere on this thread that the market is very quick at pricing data in e.g Something that may happen in 6 months gets priced in a month. That statement being true if the market is not responding normally to releases it may be that something in the future stronger than the current data has been priced in hence why everyone is ignoring the current data.

Sorry about my ramblings I'm still struggling with finding more Order Flow generators and wanted to ask Grkfx's opinion. The only one I have up to this point is trading off the back of large Acquisitions data and the Options barriers.

I'll have a few beers and see if I can make my post a little more understandable.

All the best,

James.
  • #1,308
  • Apr 10, 2011 1:57pm Apr 10, 2011 1:57pm
Quoting redbaron1981
Now I would say that it could have been anyone of these reasons however the one that stood out to me was number one. I'm not really certain about how I could use this to generate an entry idea but it certainly could come in handy. If we saw the market react in a negative way to what would could be classed as a positive release then couldn't we say that the Specs had high expectations but they had overestimated on how strong the pair actually was. I hope I've explained this clearly. Another example may be where we have several sets of negative results...
Well I am not necessarily going to try to figure out what % is speculative vs hedging vs other things. People interpret things in different ways.

I just care about what will move the market. What market participants or combination of market participants will move the price. That is the beauty of order flow trading. Either you know what will move price, or you do not know (other way is to get lucky).

As for that old aud/usd home loan release, If I remember the correctly the answer was number 3 - that the market was not sensitive to that particular news item, so it generally did not matter what the number came out was, aud/usd wasn't really going to move. Now everyone interprets things in different ways so some people might disagree with me. Thats what makes a market. One person thinks this might happen, the other person thinks the opposite is going to happen. Who is going to win? Whoever truly knows what will really generate order flow and move the market and positions themselves appropriately.

As for how you can use it to generate entry idea. You could say if news release number is above/below "x" number you buy/sell. Most people don't know of the concept of sensitivity. They think a certain thing will move the markets but it does not. Then they scratch their heads as to why. Most people screw up and don't know what the market is sensitive to. Even order flow traders can screw it up. Even I do occasionally. Now the people who are trading off moving averages and technical indicators screw it up all the time, because the market does not move off moving averages or stochastic, so they have zero chance of actually nailing why the market moved or will move.

As for if you have a set of negative results but the market fails to move, that can signal signal that the bigger players have different opinions, OR, it can signal that the market did not care about those news releases to begin with. The markets sensitivity to that news, or series of news may have been low/minimal, so therefore any movement you saw was noise and not related to the news.

Yes the market tries to price in things many months from now. But those expectations can change on a daily basis. They may think that a central bank may hike in 6 months, but their expectations do not stay the same every day for the next 180 days. Expectations change, sensitivities can change, which is why you get up and down movements.

The market gives you order flow examples every day. At the end of the day get all the data and information together from IFR, forexlive, and the financial news websites, forex news calendar, and try to figure out why the market did what it did. Sometimes it can be one major thing, other times a combination of things. Sometimes it can be as simple as stops tripped, or as simple as profit taking. Other times it can be more complicated.

The information that I use to make decisions, everyone has access to them. I am sure there are 100,000 other people viewing the same information as me. The skill and profit lies in knowing what is important, when it will be important, timing the trade, and structuring it properly. Having a good order flow mindset helps.

Everyone starts the day with the same information. It is what you do with it that counts.
Private message me for a link to my order flow website.
  • #1,309
  • Apr 10, 2011 2:14pm Apr 10, 2011 2:14pm
Quoting grkfx
Well I am not necessarily going to try to figure out what % is speculative vs hedging vs other things....
Traders don't care about pricing things in, there is no such thing. The market cares about correct prices only in the halls of academia--they are the ones who contrived the idea. If you think about it, it's pretty funny they've only started figuring out in the last decade and a half that orders move markets. lol.
  • #1,310
  • Edited 2:51pm Apr 10, 2011 2:31pm | Edited 2:51pm
Quoting grkfx
At the end of the day get all the data and information together from IFR, forexlive, and the financial news websites, forex news calendar, and try to figure out why the market did what it did.

Everyone starts the day with the same information. It is what you do with it that counts.
there it is....

Along with IFR and I like to really pay attention and know what is on the plate for the day/week ahead and the FF calendar doesn't provide you with everything, such as bond auctions and speakers which can move the market greatly. Forexlive is ok but I actually prefer DJ International, Ransquawk or MNI as you get the info a bit faster. I look at forexlive occasionally.

fxnews includes DJ International which you can use, but I like to have ransquawk on too. I use the free delayed version but.. they have an economic calendar as well, that is better the FF's because they include the speakers for the day (FF does show speakers, but not all of them I notice) and the bond auctions. DJ international has an economic calendar which also tells you when the speakers are talking, but they don't include the bond auctions though.

I think the main thing with all this, is to find out what the market is focusing on and what it's not, and think about what could change things in the future and how you can profit from it. What's causing orderflow...
  • #1,311
  • Apr 10, 2011 2:48pm Apr 10, 2011 2:48pm
Quoting Monroe
there it is....

Along with IFR and I like to really pay attention and know what is on the plate for the day/week ahead and the FF calendar doesn't provide you with everything, such as bond auctions and speakers which can move the market greatly. Forexlive is ok but I actually prefer DJ International, Ransquawk or MNI as you get the info a bit faster. I look at forexlive occasionally.

fxnews includes DJ International which you can use, but I like to have ransquawk on too. I use the free delayed version but.. they have an economic calendar as...
Thank you for your list of news sources! I will check them out. Always looking for something new and better.
Private message me for a link to my order flow website.
  • #1,312
  • Apr 10, 2011 3:02pm Apr 10, 2011 3:02pm
Quoting grkfx
Thank you for your list of news sources! I will check them out. Always looking for something new and better.
no problem. DJ International from oanda is pretty damn good, but I really like MNI (market news international) they have great sources of info and they archive it. The main wire is like DJ's wire, but it's a nice interface, clean and ordered and the MNI FX Bullets are great, super fast and it's like IFR. You can try 1 month trial for free. Not sure how much it is, but I like the FX Bullets.

Ransquawk rocks too.. they basically squawk out bloomberg/reuters news as it happens.. they have a bunch of analyst watching the markets and news sources different things and they squawk out all the rumors and everything, and then have the wire to go along with it. The free version is 2min delayed but it's good enough. Plus the economic calendar is great.

So I'm basically using DJ news, IFR, MNI fx bullets and have ransquawk on for my daytrading.
  • #1,313
  • Apr 10, 2011 3:03pm Apr 10, 2011 3:03pm
I think I may have solved this Order Flow mindset or at least made a major breakthru.

Just one question if were are trying to trade at the same time as people who move the market then surely theres going to be execution risks.

If theres large orders hitting the market our orders may get slipped. But from what I'm looking at even with a few pips slippage this OF method is still extremely profitable. I'm already in with an ECN anyway which would help.

The efficient market hypothesis has got a lot to answer for!
  • #1,314
  • Apr 10, 2011 3:15pm Apr 10, 2011 3:15pm
Quoting grkfx
Thank you for your list of news sources! I will check them out. Always looking for something new and better.
Another question. Besides monitoring the news and such for trading Eur/Usd are you also monitoring Aud/Usd, Eur/Cad, Aud/Jpy,Gbp/jpy, Ggp/usd, british pound, Nasdaq 100 index, Japanese yen, and gold to monitor the corolations to really see or gauge the depth of the mispricings?
  • #1,315
  • Apr 10, 2011 3:51pm Apr 10, 2011 3:51pm
Quoting Scotty B
Traders don't care about pricing things in, there is no such thing. The market cares about correct prices only in the halls of academia--they are the ones who contrived the idea. If you think about it, it's pretty funny they've only started figuring out in the last decade and a half that orders move markets. lol.
Hey there ScottyB, I know you've been following EUR/USD for some time, but if you subscribe to the view that traders don't care about pricing things in, then I'd be interested to hear your views on how the market responded to the recent 25bp hike by the ECB.

Quoting Louie
Another question. Besides monitoring the news and such for trading Eur/Usd are you also monitoring Aud/Usd, Eur/Cad, Aud/Jpy,Gbp/jpy, Ggp/usd, british pound, Nasdaq 100 index, Japanese yen, and gold to monitor the corolations to really see or gauge the depth of the mispricings?
Mispricings in forex can be created by happenings in other markets, since they are all interconnected, and information is king. You don't have to watch 562 instruments, but paying attention to the ones that are currently in the market's focus may prove valuable.

EDIT: Didn't realize that was directed at grkfx, my bad!
  • #1,316
  • Apr 10, 2011 4:33pm Apr 10, 2011 4:33pm
My take is that the 25bps hike was already "priced in" as they say. Obviously traders aren't saying "ok lets price that in" but whatever.

Last week I couldn't find one reason to sell euro. You have ECB tightening and the market looking for more ECB rhetoric on more hikes in the future. We're hearing talk from FED officials saying some hawkish shit, but not a great amount of FED voters are in agreement of cutting QE2 short and tightening... though the changes are starting. Most of all, you have ACB's heavily diversifying dollars into eur and aud, oil and commodities surging, and U.S government shutdown risk. Along with all these barriers touted after a big breakout on euro over the november highs.... so we have rumors and charts in line too.

seemed like a no brainer...
  • #1,317
  • Apr 10, 2011 5:54pm Apr 10, 2011 5:54pm
Quoting Monroe
My take is that the 25bps hike was already "priced in" as they say. Obviously traders aren't saying "ok lets price that in" but whatever.

Last week I couldn't find one reason to sell euro. You have ECB tightening and the market looking for more ECB rhetoric on more hikes in the future. We're hearing talk from FED officials saying some hawkish shit, but not a great amount of FED voters are in agreement of cutting QE2 short and tightening... though the changes are starting. Most of all, you have ACB's heavily diversifying dollars into eur and...
My sentiments exactly, which is why I wanted to see exactly what Scotty's interpretation of events were...

But in all seriousness Monroe, those reasons you listed all come in second place to the fact that the Weekly Down Trendline was broken. We all know that was the real reason for the move, but nice try convincing us to think otherwise.
  • #1,318
  • Edited 6:20pm Apr 10, 2011 6:02pm | Edited 6:20pm
Quoting Monroe
My take is that the 25bps hike was already "priced in" as they say. Obviously traders aren't saying "ok lets price that in" but whatever.
I'm with ya there

Nice post... After gathering many statistics last night I was trying to decide which stage of the business cycle all these countries are in and looking at the EUR things look very bad... Just by the fundamentals you would think their currency would be in quite a decline, but the only thing going up is their exchange rate against many major currencies...Seems like quite a bad sign... Just another point for the argument that fundamentals alone don't move the markets.


Quoting redbaron1981
Grkfx,

Been looking back on your posts recently which sparked a few more areas of interest.

James.
Did the same thing on the weekend Also made a document with all of grk, DS, Gaston posts and Monroes, DS, ET and grk posts from this thread... I think the rest is just noise,, Took me effin ages but now I have my bible!

Quoting grkfx
Seriously, stop bumping up the thread. The more people continue to post in this thread, the closer you guys get to figuring all this stuff out. The longer this thread goes on, the more I get goaded into posting more and more.

I am starting to get scared some of you guys might take my liquidity...

I guess I should of thought about that before I made all my posts. Stupid me. I bang my head against the wall everyday now.



Well I'm not gonna argue with you on that boss...


See you guys in 6 months, I'm going on a mission!


Inserted Video
Time hides Nothing
  • #1,319
  • Apr 10, 2011 6:24pm Apr 10, 2011 6:24pm
CindyXXXX... good luck and kick ass on the mission bro.
  • #1,320
  • Apr 10, 2011 6:27pm Apr 10, 2011 6:27pm
Quoting xXTrizzleXx
My sentiments exactly, which is why I wanted to see exactly what Scotty's interpretation of events were...

But in all seriousness Monroe, those reasons you listed all come in second place to the fact that the Weekly Down Trendline was broken. We all know that was the real reason for the move, but nice try convincing us to think otherwise.
lol! of course! but that was a secret.... and you spoiled it.

In all seriousness that weekly trendline and the break of the novemeber high's... basically both strong technical significance.. which is why i keep an eye on long term technicals, especially when reported by the bigger names, as part of my orderflow analysis.
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