Okay Traders,
Here is the lesson on Order Flow. I will be making a second video that will cover expectations in greater detail but I want you practice the first part.
Order Flow Analysis:
Order Flow Analysis goes hand in hand with Structure Analysis and helps you gauge the strength or weakness of the price swings. We can achieve this by observing and comparing the three components that determine strength and weakness from swing to swing in any market. These components when analyzed properly gives the technician a huge advantage in determining whether a trend is strengthening, weakening or if a reversal is imminent. The most important element of this analysis and the one overlooked the most is its ability to provide extremely accurate expectations as to where these cycle highs and lows are likely to occur. This become even more powerful with the use of Bar by Bar Analysis and Fibonacci Studies. Before I address this I will address the components of Order Flow and the expectations we have from them.
Here is the lesson on Order Flow. I will be making a second video that will cover expectations in greater detail but I want you practice the first part.
Order Flow Analysis:
Order Flow Analysis goes hand in hand with Structure Analysis and helps you gauge the strength or weakness of the price swings. We can achieve this by observing and comparing the three components that determine strength and weakness from swing to swing in any market. These components when analyzed properly gives the technician a huge advantage in determining whether a trend is strengthening, weakening or if a reversal is imminent. The most important element of this analysis and the one overlooked the most is its ability to provide extremely accurate expectations as to where these cycle highs and lows are likely to occur. This become even more powerful with the use of Bar by Bar Analysis and Fibonacci Studies. Before I address this I will address the components of Order Flow and the expectations we have from them.
- Projection is the distance a NSH or NSL makes from the previous NSH or NSL. The expectation from Projection is that the stronger or longer the projection the more strength behind price and the shorter or weaker the correction. Whereas a weak or shallow Projection shows weakness and we can expect a deep correction or possible breakdown in the trend.
- Momentum is not looked as in the traditional sense of the word. Momentum is the pitch or angle of the swings in comparison to each other. Steeper angles in comparison to the previous swing are an indication of strength building. The opposite is true if there is a decline in pitch as this signifies weakening in price action.
- The third and final component is Depth. Depth is all about the pullback, correction or the retracement. It is the distance from a NSH or a NSL to the corrective swing high or low. Deep depth in price action indicates weakening of the driving force while shallow depth indicates strength.
This is the analysis we focus on to identify breakdown is price swings and address turning points or market reversals. It also helps us determine based on expectations areas of interest for possible entries on either continuations or reversal opportunities.
https://youtu.be/k55VTGs4F-Q
If you fail to plan, you plan to fail.
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