Hello srmfx, im interested to learn regarding the STE, any way that i can learn the basic of the trade?
from what i observed from the charts and post :
1. most of the trade are done in minutes,
2. entry done at the extremes, (as in trying to capture the big wave)
3. entry done at :
-round numbers
-bounce of EMA - most that i have seen at 50,100,and 200.
-last high or lows,
-double top or double bottom.
4. closing of trades done in manners of trailing with 3 stops 1/3 everytime (if im no mistaken)
5. you close your trade if the trade does not move as expected within 5 to 10 mins (from the charts)
6. you use about 0.5 to 1% of the equity to risk for the trade.
7. trade done with the entry by observing the spike of pips in quote, or rush of order :
-if there is a sudden spike buy at the tick chart, you will enter at the next spike, buy (as there is a lot of buying power at the time) and apply vice versa for the sell.
- tape reading (i still dont understand regarding this method, need more reading)
8. special trades
- Bounce of EMA 200 (<----- im really interested on this one, looks very promising in binary option trading, short 60 sec call or put)
- call and put at round numbers,
- wish to learn this the most as if only fully focused on this also can give a significant return by option trading.
there are some more that i observed from the charts you posted. but im still lacking the basic on how the STE works, eg : the currency, or stocks, correlations for entry,
hope you can shed some light on the basic or add on what you can. my cup still empty, i wish to fill it with your knowledge.
Hi DrPip,
My trading is based on the order flow analysis. I see from your post that you get the idea in general. The point is to identify points on the chart or/and in time where decent flow could be generated. Some of them are the various support and resistance levels. prefer 200 EMA and round numbers. The trick is the timing of the trade. The exact moment when this order flow could move the market in your direction. There are some rules but you should monitor the market on a constant basis and see what the big money are doing. That's what I can say in a few words.
Thx srmfx.
Currently im trying to understand the order flow analysis.
From what i understand, order flow depends on demands of sell and buy, which in turn will generate the momentum to raise or decrease the price.
So rather than saying price action is the king, actually the order flow is the one that will forn the price action.
Orderflow will move the market, while price action will not move if no order flow does not provide the momentum for the price to move.
Eg. Double top or double bottom will not complete the pattern or will fail if the order flow does not provide the momentum necessary to move it.
So who can read the order flow will see the market strength at a raw level, rather then the after effect which is the price action later.
Regarding the big money movement, how you monitor their order flow, (any specific indicator or pure quote reading)?
- i know that the entry mostly using quote reading. And the entry are by spike suggesting sell or buy.
- But how do you decide you at the level where the order flow are more over the seller or buyer?
Any books you can recommend for me.to read for better understanding of order flow analysis?
Thx in advance for your reply. Im still searching on how to trade the market, as most of the time, all the strategy i have tried either failed, or work only half way..
When i saw your thread, i liked the way the trade made simplified, basic emas and support resistance. And i discovered regarding orderflow analysis which is the true mover of market rather than just price action. Hope this will be my big break.
Thx srmfx. Currently im trying to understand the order flow analysis. From what i understand, order flow depends on demands of sell and buy, which in turn will generate the momentum to raise or decrease the price. So rather than saying price action is the king, actually the order flow is the one that will forn the price action. Orderflow will move the market, while price action will not move if no order flow does not provide the momentum for the price to move. Eg. Double top or double bottom will not complete the pattern or will fail if the order...
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You get the big picture. I have a theory about the financial markets information flow. In short, there are stages where you can joint the information flow. First is the decision makers (large market participants. Their money move the price and they know first what could happen at the moment they decide to buy or sell. Next are the market makers (large banks and brokers). They receive an order from the first tier market participants and know that someone is buying or selling large amounts. Unfortunately we don't have access to the info at the 1st and 2nd stage. We can join the 3rd stage where the order is executed and makes those tick with different sizes. I don't know and don't care whether a 3 pips tick for EURUSD means that 500 mio order was executed. By constantly monitoring the price I know that this ticks means a large buyer enters the market. That's in general. The next stages of the info flow are not of interest for me.
For the OFT you need to identify the levels where large buyers or sellers could place orders, the time of the day when large market participant could buy or sell, and when such large market player entered the market.
alright srmfx, thx for the input. so far what i have understand is :
1. quotes wont show the volume of trade going in, but if combined with the proper level of support and resistance, we should be able to deduce where they (market mover) may enter, and we join the move in that moment (this would require quote reading)
2. identify the proper time where trades will happens, <---- this i guess would depends on the currency, news release, and also market open (london, us , etc)
3. our duty is not to guess, but rather, follow the trade, and ride the wave. (hence the name of your thread itself)
ill go through again the order flow analysis tutorials that i can find, and try to do some quotes reading/monitoring next week and get some paper trading done..
alright srmfx, thx for the input. so far what i have understand is : 1. quotes wont show the volume of trade going in, but if combined with the proper level of support and resistance, we should be able to deduce where they (market mover) may enter, and we join the move in that moment (this would require quote reading) 2. identify the proper time where trades will happens, <---- this i guess would depends on the currency, news release, and also market open (london, us , etc) 3. our duty is not to guess, but rather, follow the trade, and ride the...
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I'l try to explain the quote reading in short. It is kind of reverse logic. If you want to buy 500 mio but at every pip there are only 100 mio available, the price will jump 5 pips when your order is executed. There is no way to now the distribution of the orders at the FX market because it is OTC. Some of the dealers at the large banks have better info then the rest of us but even they don't know the exact numbers. However. if a 500 mio order moves the price with 5 pips then a 5 pips move means that a 500 mio order was filled. So, you just have to watch the quotes and see what a largs tick means in the current market reality. Sometimes it could be 2 pips, the other it could be 4 pips. You just have to watch the quotes.
Large pending orders could be expected around support and resistance levels. This is just a guess. But when the price is testing a support level, if upticks are larger than downticks there is a greater probability that a large buyer enters the market. This is the trick for the binary options. If you trade 1-minute options, you need the buyer to keep the price for that period above/below the strike. If you trade with a spot position the buyer must be strong enough to move the price not only to keep it above/below the level.
owh, now i get it. for certain trade like your 200EMA bounce option trading, quote reading is important, as you want to know if there is buying or selling power that will make the price bounce above/below and make it stay there for just a while, until your option expire ITM.
for the riding the wave, momentum is required and quote reading decrease the stoploss requirement with "at the moment" best entry.
but during a volatile session, like news release, sometimes they (price) just smash through the support or resistance, and if im not mistaking quotes reading at this time also have higher chance for false reading. do you recommend trading or just watch at the sidelines?
owh, now i get it. for certain trade like your 200EMA bounce option trading, quote reading is important, as you want to know if there is buying or selling power that will make the price bounce above/below and make it stay there for just a while, until your option expire ITM. for the riding the wave, momentum is required and quote reading decrease the stoploss requirement with "at the moment" best entry. but during a volatile session, like news release, sometimes they (price) just smash through the support or resistance, and if im not mistaking quotes...
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I trade the episodic volatility but based on different principles. Quote reading is useless after news releases.
