Order Flow - Achieving the mindset

I've used the story of the Hunt Brother's corner of the silver market to illustrate several orderflow concepts. Turns out they're in the news today!

http://news.smh.com.au/breaking-news...506-1eaqe.html

Gold and silver sure are looking like a hot buy.

You changed your blog theme I think. Anyhow, I'm interested in your take on gold. All I have been hearing lately is the U.S. dollar is on it's way to zero, hyper inflation is coming to the U.S., and the best hedge is precious metals. You are short gold (I would not buy at this level), but I was watching for silver to drop somewhere around $27 oz before loading up.

Glad to see some life returning to the thread!

lol..just thought I'd ruffle a few golden feathers. The gold hoarding is going to end very badly for most involved.

Nice blog post B, I agree 95%. I think your on the money with the timeline but I don't see it going below ~$600/oz. Still some healthy profits for those with the balls to fight the monster.

Some people that trade AMT think like that, but not all. So I'd disagree with this to an extent.

That being said AMT isn't strong or weak form, and isn't necessarily related to EMH, and not as fatally flawed as you suggest.

Playing devils advocate here, I'm not primarily an AMT trader, so much as supply and demand and price action.

I dunno man, that John Paulson guy says its going to $4,000. Hes betting like half his net worth on that one trade. If he says it, it must be true.

Ohh but wait, I'm an order flow trader so I need to think in terms of order flow and not some magical ramblings of a top hedge fund manager.

He's already fully invested into gold. He can't generate anymore bullish order flow. His statement that gold is going to $4,000 is not going to generate any bullish order flow. So that means he is relying on other market participants to push gold to $4,000. Umm, I wonder which market participants are going to generate the necessary order flow. Umm, I wonder what scenario he thinks is going to play out. Umm, I wonder what his pain tolerance point is. Umm, I wonder where his stops are.

So very interesting...

The banks, exchanging one currency for another, for one reason or another. And a little bit of the change is people in medium companies and small timers doing their thing for what ever reason. Something like that.

If somebody is talking so everybody can hear it, dont listen they are lying. Thats pretty much a rule since journalism started focusing on peoples breasts and whos nailing who instead of asking tough questions to people in power.

Why not use AMT to gain some information about areas where you can expect some (no) reactions or about that overall pattern itself.
Yes, i would call it one small piece of OF trading.

The VSA is in my mind an inaccurate and lagging way to "interpret" OF.

Pretty useful for me to find "common" traders sentiment, just like any other indi even if that one didn't have any direct correlation to order flow at all. From my point of understanding, order flow is to understand every market participant motives behind their decision, including the TA user.

There's one point where I see AMT relation to order flow. Say asian session was trading in a range and after it closed the price went up during London/US session. Some of those who were short in asia would like to get out of their positions at least at breakeven so their bids would be clustered somewhere in that asian range - AMT POC. I might be completely wrong here though, it's just how I see it.

Hi folks!

I think I need to post charts to see if my understanding of OF is similar.

All comments welcome

CAD - CHF : In - 0.9010 , TP at 0.9150

I took this b/cuz of the buy orders I knew were there. HTF prior interaction with the level told me this, I saw the BUOB at a SWL and I bought.

I identified the 0.9150 ( HTF Opens / Closes i.e PPZ) as the FTA and so I placeD my TP there.

USD - CAD: In - 0.9660, TP at 0.9560 (later moved to 0.9520)

Same thinking as before, the HTF told me there were more sellers at the 0.9700 level and so I took 4HR PA to confirm entry. The 0.9575 is a key area for buyers as the 4/5 May push showed. There was an imbalance here, so I had my TP above it. We did see a kick off this level going South but it seems now the buyers have been gobbled up.


All comments welcome

Anthony

I think the way i see it orderflow means to try to understand where price doesnt want to be, and how much it doesnt want to be there so to speak. Of course price in itself isnt intelligent/sentient like we are, but i think you know what im saying.

So in in very short terms

1) Identify where price dont like to be

2) If price gets there chill out

3) If if shoots away from that area and it seems not to be fake break, go for the money and enter

VSA and a couple of other approaches often seem to try to do something similar.

Hi,

i'll throw some of my thoughts here.

I understand your sarcastic mindset here where you think that gold and silver are TOTALLY mispriced.

However (and this is where you surely disagree), you have no REAL basis to support your argument here.

Here's why you think that the gold is mispriced:

Gold has NO fundamental VALUE to support the rise. There's absolutely nothing REAL to do with that piece of shit metal, besides jewelry.

Here's why gold has been rising (fundi reasons):

1) economic slowdown in developed countries that causes stimulative actions
2) expanding debt crisises in developed countries
3) media circus coupled with Austrian school of economic theory conspiracy theorist fueling that bull run with their anti-government statements where they are against ANY bailout or stimulus and how all of that will only lead to a broader disaster.

Considering all the above it's all but impossible to kill the furious gold appetite by the chiniese and the rest of the gold buggers. The market is NOT wrong. There's simply an imbalance between buyers and sellers cause the sellers have no REAL basis to CONTINOUSLY demand to sell the commodity. Selling is purely a speculative activity. Someone has to demand tat excess selling when the market has retraced lower and where there's seemingly a good opportunity to go long. Retail is NOT selling gold...never (unless getting out their longs)...they are only "investing" their savings into something (read: buying things).

Unless you can strongly convince me (and everyone else) that the asset purchase program by the U.S. is truly ending once and for all with that QE2 and the next step is towards raising rates only THEN you have real basis to short the gold. Truth is you can't convince me on that. There's already rumors about the QE3 (whether or not it's based on rational expectations doesn't matter)

Many anti-gold minds might disagree that the prevailing QE's are the main cause of the short-dollar bubble AND THUS the commodities bubble (because of the reserve currency status). I myself am convinced that it is and would welcome anyone to prove me wrong.

I'm sorry that this is rather off-topic but i like to debate on the subject that's why i post this

take care.

yeah agree with that but price needs to go to certain places in order for orders to get filled ,hence the movement

its being able to indentify these areas on a chart and trade off them, essentially coat-tailing the big fish

if you are able to see those areas on a chart and the novice cant then youll be taking his money, he'll buy into an area where there are more sellers (me, you and the big fish)

I rather discuss it without chart, because for me chart is only one factor - to understand TA user motives, yet in order flow we need to understand all market participant, not just TA user. When we're focusing only on chart our view would be limited.

i mean yes, i could do tape read if thats what u mean and i think it would be the same, OF sounds like tapereading in a way

but if ur referring to fundamentals they dont play any part in my trading

Interesting! I never even began to think about it that way. But it makes sense, and I remember reading something similar in percival's book. The idea that extreme participation and extreme sentiment almost have to mark a correction because there is no one left to participate in that same direction (something like that I think).

The thing I struggle with a bit is Scotty's long term view that gold is going to $400. I mean, and maybe this assumption is the flaw in my logic, but to me the rise in things like gold and silver (along with the fall in dollar) represents smart money (I use that term loosely) losing confidence in the dollar, and moving capital into assets that historically have been a good hedge against inflation. So with that assumption, I look at our current leadership. I see them almost shutting dow over a measly 30 odd billion in budget cuts, which are then only projected by CBO to save only several hundred million, and I see the IRS stating it sent out over 500 million in underserved FTHB credit (and their apparent lack of willingness to take it back), and that more than wipes out the budget 'cuts' that congress made such a huge deal about.

I see them about to raise the debt ceiling again, floating more and more ways to tax people to try and bring even more tax receipts in, all the while either clueless to or uncaring about their spending.

So to me, I see all that and think to myself, smart capital HAS to be abandoning the dollar and flowing into assets that historically perform well during inflation. So even though the gold and silver charts had gone parabolic and I have no intention of buying into that, I have to think that after a correction they will continue back up unless the U.S. policy makers do a 180. Which frankly I have no faith in

So thats my thought process on gold and silver. But then, maybe, some even smarter people knew a lot of folks would be thinking that way, and took speculative positions in g and s, got the suckers to buy from them at the top, and the whole rise was purely speculative.

Well, at least I'm thinking hey...

I apologize for the intrusion on the thread. I have found the subject of order flow fascinating. I have been declining to comment, as I have not read through all the valuable info found in this thread. I would feel more comfortable after digesting all the material found in the thread. I just wanted to share. In educating myself in AMT, I ran across a video, of a so called professional trader. Let me also mentioned he was trying to sell a product. He’s sales pitch was that MP indicator (he didn’t say AMT) was “A Poor Man’s Way of Viewing Order Flow” That comment stuck with me. How true it is, that’s another thing. I don’t believe everything I read or see on the internet. But that comment stuck. I didn’t believe the sale pitch, but I have been looking into order flow ever since. Looked a little into it. What turned me off somewhat was these “order flow games”. I know very little about what I am talking about. Large bids or offers, then all of a sudden those orders were no longer there. With my limited understanding, I was a little bit leery of trying to learn something that based on orders that may or may not be there in the very near future. Way out of my league! But I am curious if there was any truth to it. I am afraid there is a lot of material here in this thread, which is very valuable. It will take quite awhile for me to digest it all. But because I do use AMT everyday in my trading, I thought it was great that AMT was even up for discussion, in this great thread. I have been trying to research the statement “A Poor Man’s Way of Viewing Order Flow” for awhile. I hope I haven’t ruffled any feathers by commenting in a thread I have not fully read yet, about a subject I don’t fully understand. But I hope this subject continues to be up for discussion, I so want to understand order flow and how it might relate to AMT.