OrderFlowTrading.com - Using orderflow analysis in trading

Hey guys, I'm going to make a new thread, more interactive & real-time.



Hey traders, I'd like to start doing courses on this subject on the weekends. I really think there's a lot of room for retailers to grow in the FX trading industry. I'm looking for a few novice traders that would like to take a 60-90 minute crash-course web meeting on trading spot FX orderflow.Maximum of 5 traders so we can focus better in a smaller group. It'll start Free of charge, microphone/headset & webcam required, I'll just ask to post a review of it in this thread, so current FF membership is required, and no joining just to do this either. Being a Commercial member now, I'm hoping to charge around $20 for the course next month. Maybe $40 for a 2-day meeting or something, as this starts.. we'll see how it changes. Good trading! [email protected]


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Scenario 1: You enter a trade, place a stop-loss behind the recent swing high/low, only to watch the market drift towards your stop, taking you out of the trade for a loss, only to then move toward the intended direction!
Scenario 2: A positive data release warrants a trade entry 'long'(buy), price shoots up as you enter, expecting price to keep going on good data, but quickly price starts retracing.. then dives down... then you realize you've bought at the high of the day!

These are easily fixed problems by using order-flow analysis when trading.
Scenario #1 when it was actually prudent for traders to push in to stops to offload their inventory of orders to (un)willing participants sitting with stops there. Or bargain hunters could pick up discounted prices if the stops pushed price too far away. Either way, you were used & abused by the market.
Scenario #2 positive data can be fully expected by the market, and stated in bank reports from various economic teams that also study trader's expectations. So if the data release doesn't 'wow' them in to buying more, the price jump upon release can actually be used to close buy orders from large traders off-loading their longs by selling them to willing buyers (retailers, uninformed large players too!).

All this can be too much to understand; but there's great resources online to help with how FX markets operate; from market mechanics to trader sentiment.

There's been threads on this topic involving the member Darkstar here on FF:
The Structure of Forex Brokers: http://www.forexfactory.com/showthread.php?t=7484
Order Flow - Finding cluster of stops on chart: http://www.forexfactory.com/showthread.php?t=274208
Order Flow - Achieving the mindset http://www.forexfactory.com/showthread.php?t=277925

I've had the privilege to join Darkstar's group of traders at www.OrderFlowTrading.com to develop the skills needed to trade analyze market order-flow.

Trading this way focuses on finding market sentiment for trade direction and order structure for which price levels to enter & exit the market at. I'd like to start interest in using these market-proven trading mechanics, and get some group web meetings for up & coming traders during their free time.

The great thing about Darkstar's site is the availability of any and all things Forex order-flow related are 100% free on the news feed: http://www.orderflowtrading.com/ForexNews.aspx sign-up to view links & reports from economic teams in some of the largest banks. I'll be going over directly what's posted on that news feed page.


Now, for this thread:

1. Have a basic understanding of market mechanics; ie, how buying/selling causes price to move, difference between limit orders & market orders.
2. Refrain the use of patterns, harmonics, indicators, ect. All you'll need is a clean, easy to read, price chart.
3. Keep the topic on order-flow; during down-time, check out some great trading articles: Orderflowtrading.com/ForexNews/Articles.aspx

Welcome to post up and discuss more here!
contact: [email protected]

Good morning EE
thank you for spicing my mind by this interesting topic
looking to follow your thread as frequently as possible
good luck

Thanks bzzz. Hope we can help you look at FX differently. Recently turned 'Commercial Member' so I'll be postin in here now

I spot a level on Aud/Nzd where, if price went to up, it would cause shorts to close their losses with buy orders and may even grab some buyers from momentum break-out traders.

Reasons I feel a breakout here would warrant further price movement higher:

1. There's been some good employment & business data out of Australian recently
2. Just last week the Governor of the RBNZ announced that if their NZD continued to appreciate (especially against their trade partners like Aud,Cny, & Jpy) that they're fine with using central bank intervention to actively sell the NZD on the market.

Looking to enter long at the beginning of buyers, on a break of 1.0875 with price target of 1.090+ :

I'll be watching this order structure play out as well on Usd/Cad. No trade setup initiated, but watching.
Friday Canadian employment change fell lower than expected while unemployment rate stayed at 6.9%.

When price moves very fast due to a lack of liquidity, its hard for traders to pick how far the retrace may occur as there's no swing/consolidation area for a target. More than not, an area that lacked liquidity, will do so again, forcing price to move further to find ample traders on the other side.

 

1. In this case, poor Canadian data drew a lack of CAD buyers and price shot up to an area where traders were willing to exchange the Usd&Cad, at the round number of 1.090.
2. These large moves can attract Fibonacci Ret. & price retracement traders looking to place bids to get in around half-way, which strengthens 50% levels as make-or-breaks.

The last screen shot is a before/after of this pattern in last week's price action.

And a clear area of liquidity to aim for as well...

Emerald,

I've been following you for a while and orderflow trading's order board is top notch. It completely mapped the moves of the EURUSD last week..... if it was traded correctly. I completely missed it.

Looking forward to your posts.

I need to get back into the OFT chat room. I've come to the realization that being a SuppDem/SuppRes/PA trader (which I aspire to be some day) is impossible without Orderflow.

Id really like to aim for the top level padt the highs. We'll see how it reacts if it hits 1.090 I saw you in the chat for minute a while back. Defiantly come back to chat abt the markets. Theres a mod in there along with active traders in every trading session; I'm online for just about every Asian trading http://www.orderflowtrading.com/Chat.aspx

AUDUSD – Large stops at 0.9345, under bids at 0.9350. Buy stops just above 0.9395 then offers at 0.9400

EURAUD – Bids at 1.4660, sell stops start under 1.4660. Offers at 1.480 with buy stops above.

Aud/Usd falls through bids and trips sell stops upon slight Chinese industrial data & retail sales miss.

Getting another possible run for Aud/Nzd buy stops.

First intraday level took out NZD data release highs, triggering some smaller buy stops (sm green box)

2nd & 3rd charts: Aud/Usd lost option hedgers as large options expired Monday and Tuesday, allowing A/U to explore price discovery outside the range. I took an AU & AJ short above the 9400 & 96.0 range

EURUSD – Price stuck to 1.37 as $370M worth of options (250M puts/120M calls) being hedged ahead of their expiration today at that lvl.

So what does option info like this mean? Large traders have purchased the right to sell (puts) or buy (calls) a predetermined amount at that strike level, and exercise it if price is below the strike (puts) or above the strike (for calls).

With this info we've obtained from the DTCC, we can see that puts outweigh the calls, meaning more volume of options are to be exercised if EU goes under 1.37. By closing out the Put options, the option holders force the option writer to initiate a buy order (under 1.37) so they don't get screwed out of too much $$. This buying pressure when price dips under a large strike, makes the chart look like this:

To the TA trader, these instances where price dips under 1.37's "support" would be classified as a 'false breakout', which large traders get blamed for manipulation, or just wanting stops under 1.37 to facilitate their trade. The truth is, there's limited liquidity to buy that low, so large banks will need sell stops to save $$ on slippage, thus passing the savings on to their own customers.

Just another wrinkle in the orderflow mindset. Good trading!

Closed both AUD short trades, A/J for +25pips, A/U for -2 pips. My conviction of Aud/Usd falling didnt happen, and it held up nicely despite Aud/Nzd & Aud/Jpy falling so I'd rather not stay short in a market where traders aren't willing to keep selling

Hey traders, I'd like to start doing courses on this subject on the weekends. I really think there's a lot of room for retailers to grow in the FX trading industry. I'm looking for a few novice traders that would like to take a 60-90 minute crash-course web meeting on trading spot FX orderflow. Maximum of 5 traders so we can focus better in a smaller group. It'll start Free of charge, microphone/headset & webcam required, I'll just ask to post a review of it in this thread. Current FF membership is required, and no joining just to do this either. Being a Commercial member now, I'm hoping to charge around $20 for the course next month. Maybe $40 for a 2-day meeting or something, as this starts.. we'll see how it changes. Good trading! [email protected]

I do plan to start a new trading acct & link a Trade Explorer on here as well. & just so you guys think bc I'll charge for FX, that I can't trade.. I'd like to keep this thread active and see other's orderflow trades as we develop along with my own.

Hey, wanted to share a trade I took in early Asian session, after Japan's preliminary GDP figures came out. Using these e

05:55 05/14USDJPY- Small stops below 101.70
15:47 05/14USDJPY – Large bids reported at 101.70. More bids from Japanese importer accts at 101.50 to provide price support
16:58 05/14USDJPY – Unchanged post-Jpy data; $600M worth of options ending at 101.80 strike in US today, helping keep price close
http://www.orderflowtrading.com/ForexNews.aspx

There weren't many shorts hitting the market for the rise in Japanese GDP, then price fell down past 101.70 and quickly shot back up, so I entered long at 101.70 and traded towards the nearest lvl of liquidity, 101.80 (large option there, lots of buying & selling)

So 3 traders on board so far, looking for 2 more FF members.

Upcoming Notable Orders
EURAUD – Lrg cluster of sell stops at 1.4560/50
EURGBP – Buy stops range from 0.8175-85
EURJPY – Light bids remain at 139.0, more sell stops under 138.97
EURUSD – Large option volume at 1.3750 strike, $1.8B worth, to expire Friday.
GBPCHF – Sell stops mixed with bids at 1.490
GBPJPY – Offers stand at 171.0
USDJPY – Bidders remain under 101.50 to 101.30
More FX order info on Order Flow News Feed

Orderflow Game Plan May 19th, 2014

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Planning the week ahead

by JupaFX

In this weekly report, we will try to direct our attention to the currency pairs and assets that are most likely to offer trading opportunities during the coming week, based on a combination of sentiment, orderflow and price action analysis.
On the docket for this week
Taking a glance at our calendar, we can notice the more important news events for the week. For the coming week starting May 19th 2014, the main events are:

 

1. Monday: Nothing significant – could be a day to spend away from screens! It's also Victoria Day in Canada. Patience is key...refrain from trading out of boredom! The only potential market movers could be Weidmann, Mersch and Coeure from ECB speaking today. Going into the Tokyo shift, pay attention to the RBA Minutes.
2. Tuesday: German PPI (bullish expectations), UK CPI + PPI (bearish expectations), Plosser to speak + Dudley.
3. Wednesday: JPY BoJ decision, EU Current Account, UK BoE Minutes + Retail Sales (bearish expectations), US FOMC Minutes, CNY HSBC Manuf. PMI, Dudley + Yellen + other FOMC members to speak.
4. Thursday: EU Parliament elections start (until Sunday), GER Markit PMI, EU Markit PMI (bearish expectations), UK GDP, CAD Retail Sales, US Markit PMI + Existing Home Sales + Leading Index (bullish expectations)
5. Friday: EU Parliament elections continue (until Sunday), GER IFO, CAD CPI, US New Home Sales, ECB's Lautenschlager to speak.

Strong vs. Weak

Since the DXY is pausing around the 80.00 mark, we need to wait for further developments before trading USD-linked pairs this week. Our attention turns to the crosses: looking at the CME FX futures market, we can see that:

1. CAD has a long bias
2. EUR has a short bias
3. CHF has a short bias
4. AUD has a long bias

So if we combine and filter the most evident FX pairs to analyze, we come up with:

1. EURCAD short bias
2. EURAUD short bias
3. AUDCHF long bias

To understand more about strong vs. weak, keep an eye on heat maps posted to the news feed here.

Sentiment Analysis on Relevant Assets

Going into the week, there are a few appointments to keep in mind. First, the European elections will be held between May 22nd and 25th , but the polls are not changing much as of late. The rise of Eurosceptic parties has been confirmed and this is somewhat worrying even if the markets are not concentrated on it just yet. While there are few data events, there are several Fed events this week in the form of FOMC minutes and various voting members' jawboning. Regarding the ECB, Mr. Draghi gave a very clear indication of “when” policy action may be taken (June) but the 'how' is not yet clear so the various ECB speakers jawboning this week should be a focal point for forward guidance. All in all, position adjusting (especially ahead of the EU parliamentary elections and Ukraine's presidential election) may be more important than the economic data this week.

EUR: sentiment is negative. In the Eurozone, economic surveys have failed to live up to their promise. The recovery is too slow, inflation is too low and last week even Germany's economy showed signs of faltering. China is Germany's third-largest trading partner so the slowdown in the EU's productivity engine should not surprise that much. In FX, the sell-off in the Euro failed to extend because of the decline in U.S. yields, but a 300-pip drop is probably an adequate discount of Draghi's stance. The market's expectation are currently revolving around a series of measures that could include a reduction in the refi rate, a cut in the deposit rate, an end to SMP sterilization and new LTROs. The actual impact of these measures will probably be subdued.

AUD: sentiment is positive. The much anticipated 2014/2015 Budget proved to be a non-event for the Aussie last week. Even so, consumer confidence and spending could be negatively affected by fiscal tightening, which could be mildly negative for the Aussie. But this is likely to be only a short-term impact on confidence and we should start seeing the first influences in the Westpac–Melbourne Institute Consumer Sentiment Index, due May 21. Regardless, we also need to factor in price action: the Aussie has basically shrugged off the worse Chinese data and has been quite resilient. This is the tale of the tape.

CAD: sentiment is positive. I'm a canuck, but still have a tough time gauging sentiment on the Loonie. My guess is that the first wave of bank earnings reports will give way to two key indicators for market attention, in this holiday-shortened week. Retail sales should rack up a third successive positive print, though it probably won’t match the weather-related rebound seen in the first two months of the year.

For updates on sentiment as it progresses throughout the week, stay active in our live trader chat.


To Sum Up: Best Looking Charts & Comments
http://www.orderflowtrading.com/Port...e002_thumb.jpg
EURCAD 4H Chart – downwards momentum continuing


http://www.orderflowtrading.com/Port...e004_thumb.jpg
EURAUD 4H Chart – EUR weakness still evident


http://www.orderflowtrading.com/Port...e006_thumb.jpg
AUDCHF 4H Chart – upside momentum still intact


It’s a tough challenge to combine sentiment, price action, technical analysis, and fundamental analysis all together to turn these thoughts in to actionable order flow trade ideas. If you still find yourself struggling in that regard, our mindset lessons can help relieve that stress.

Im liking this setup to favor aud strength & euro weakness as in the weekly open report.

Order levels reported from the Forex News Feed. Mark 'em and check out how price reacts at them:

1. AUDUSD – Light bids at 0.9325, sell stops on break below 0.9320, bids at 0.9300. Offers remain at 0.9400 with buy stops developing at & above 0.9410
2. EURAUD – Large cluster of sell stops at 1.4560/50
3. EURGBP – Buy stops range from 0.8175-85. More stops under bids at 0.8140
4. EURUSD - Stops above 1.3730 with offers 1.3740/50
5. USDJPY – Well-supported today by importer and option-related bids. Large option level at 101.55 ($377M) to draw in price; Larger level of Puts($550M) set for today’s expiration at 101.35.