Price-Structure-Order flow

Update on WTI - Long:

Price reached my first take profit target closing out 1/3 of the position with a profit of 419 pips. It currently appears like we will reach the 2nd take profit area during the day today.

Update on EUR/USD - Long:

EUR/USD continues to struggle. Clearly the order flow has balanced at this level. Nothing left to do but wait...

Update on WTI - Long:

Price has struck the 2nd take profit level exiting another 1/3 of the position for 464 pips. Now with 2/3 of the position booked in profit I have moved the stop loss on the remaining 1/3 to just a little over break even. As we are at the top of a monthly range< am unsure if price will stall or break, so I have protected the remaining portion of the position from loss.

Update on EUR/USD - Long:

NFP announcement caused price to go "nowhere fast". Other than scalpers getting whipped up and down, price hasn't produced any new low or new high. Just prior to the announcement the intraday charts did post a new higher low and if this holds may pave the way for an emergent bullish trend, assuming there will be some follow through next week.

Update on EUR/USD - Long:

Tough start to the week. I was stopped out on my original long entry for -70 pips, but was also able to re-enter again, at a better price than the position I had before. The position is now positive more than double what was lost, and is rapidly converging on the first take profit level. So we'll have to see what happens, as things are changing quickly this week.

Update on NZD/USD - Short:

A small position was triggered Friday before the close of the week. With the volatility across the entire FX market I had the opportunity to move the stop down to protect the position as was stopped out just an hour ago. I call it a "scratch" trade, but it did make a small profit of 25 pips. I am still bearish on this market, but will need to wait for a fresh signal to open another position.

Update on WTI - Long:

Price looks like it is wanting to produce a sustained break a 6 month high. Low volume today, as produced a move higher, but nothing to speak of quite yet. I have already moved my stop on the remaining portion of this position to just over break even, so nothing to do here but hold and wait. It would appear that the OPEC agreement is having the desired result on prices.

Update on USD/MXN - Short:

This market just cannot decide what to do!! It is at all time highs, and while there do not seem to be any fresh buyers, to push price higher, at the same time, there is still no one willing to sell this market (except me).

The governor of the central bank announced he will resign his post in favor of a job at the international clearing bank, produced a small (tiny by this scale) blip higher, which, today's action has completely cancelled. The only thing I can say here is..."look folks, ALL TIME HIGHS"

Stalking GBP/USD for a long trade

Price is producing higher highs and higher lows on an daily/intraday basis. Further, price has now pushed down into a target area. I am anticipating a final push lower, and then an entry signal...

USD/JPY - Short:

Another shot at shorting this market. While the upward thrust has been long and grueling, with nary a retrace, the order flow appears to have now balanced over the past several days, and is now beginning to unbalance. I have a short that is working with another pending short above the market, as I suspect the price may still try and prob the highs here before moving lower.

Hey...anyone out there? I feel like I'm talking to myself. Is anyone reading this journal? I was hoping to stimulate some dialog.

I don't write much ,but love your section and your style of trade

Thanks nutts...appreciate the response. I'm glad to know there is someone out there that is reading. When you get a chance I invite you to participate as you see fit. No worries...I understand most traders (successful traders) don't have time to diddle around on chat forums. I'm usually here during the US session...not sure what part of the world you are in, but when you get the chance, appreciate the conversation.

i am,but i don''t get how are you looking at orderflow?some website or looking at volumes?

Thanks for your reply geziz. I am "reading" the order flow and how that effects the price candles. It is a skill I learned from my mentors. It takes a bit to understand it but eventually you begin to see it naturally, once you've trained your eye to look at the charts.

One must understand that it is order flow that creates those cute little "price action" signals...in fact it is order flow that creates each and every candle. It is a constant stream of orders coming into the market and when that stream of orders is weighted to one side or the other the flow is said to be "unbalanced", meaning there are more orders on one side than the other....excess buying orders creates upward price movement, and excess selling orders creates downward price movement. When those orders seem to apparently the same on both side, the order flow is said to be "balanced". This means the buyers and sellers are relatively equal in volume, and thus price is relatively stable. A balanced order flow doesn't mean that price doesn't move, it merely means that there is "relative" balance to the order flow.

These two conditions create very separate and distinct patterns in price that can be clearly seen. When you look at a chart you can see clear areas where price moved in only one direction. As well you can also see areas in price where price went back and forth without really going anywhere, in a choppy and nonsensical pattern. Also note that one is ALWAYS followed by another. ALWAYS. That is the nature of the market flow and it is about the only thing you can say for certain will happen. Balance will ALWAYS be followed by imbalance, and vise versa.
This skill of observing how the areas of balance and imbalance resolve themselves based on market participation is key to successful trading. The order flow expresses itself across all time frames because it IS the market. It is we participants who divide it up into sections...5 min, daily, weekly, candles etc. Thus in order to truly "see" and appreciate the order flow and how it is currently affecting price, you MUST look at the entire market, or at least as much of it as you can.

Once you can do that you will very clearly "see" where buyers and sellers (big and small) are taking their positions in the market. It will become obvious where they have placed their stops, and that information can be used to your advantage.

Admittedly it is not an easy skill to master, but it is quite simple to learn. Like chess, or learning to play an instrument, it take practice and patience. My two mentors taught me how, and I had to put in many hours learning until I could "see" it. Once that happened, it was as if my blindfold had been taken off, and I could see and appreciate the beauty, of the market and wonder at it. It was like realizing the immensity of the universe for the first time. You can see how intricate, and interwoven, the order flow is and how it behaves. Not to mention that it is ALL man made. Every order is the result of someone (or someone's program) interpreting in their own way their beliefs about the present and future, and then acting on those beliefs. To me...everyday is a wonder that I sometimes just look at and marvel at how it works.

i use Oanda orderbook in my trading and it''s good,but i need some adjustments on my part to take the right side of the trade

Yes I have seen the order book. My understanding of it is that it tracks only the orders going through Oanda's liquidity provider. It is also historical, meaning it shows where the orders WHERE placed at the moment it posted the graphic. However the more you look and and study order flow, the more you will realize that it is dynamic. Meaning, the order flow changes by the second and must be "read" in real time. While the orderbook snapshot might give you an idea of where to expect some "push back" on prices, it really does not capture the true market flow of a 1.2 trillion USD a day market. It is just not possible. Add to the fact that there is really NO volume information available, in the FX market because it is decentralized, and you will quickly find that these tools are not really very helpful...at least they weren't for me.

It is far better to develop the skill on your own, the old fashioned way...through hard work. I have had conversations with others who develop indicators for reading order flow "delta" and find them extremely difficult to utilize them in real time, because the order flow is moving at the speed of the internet...really fast. In my opinion, it is far more useful, to "see" the order flow in its affects on price, and learn to read and "see" that. I know it is difficult but it is well worth it.

This skill is not the end all or be all in trading, but for me it has lifted the curtain of obscurity in my trading and allowed me to turn the switch from loser to winner. Not to say that I win each and every trade, but I believe that 55-60% consistent wins is reasonable and achievable, over a large sample of time...year after year. I am living proof that it works.

I'm happy to help if I can, but you will need to ask questions for me to give answers.

in other news FX is 5 trillion $ a day market

I stand corrected, I guess my information is old.... Suffice to say it is a HUGE market

Would you consider drawing unbalanced areas as such? Also do you consider price not wanting to re enter an unbalanced area, as tradeable.



Checking how it appears on a higher T/F.




Edit: I may have posted this back to front ie should have shown the unbalanced areas on a higher T/F (H4) and then checked if the areas are also unbalanced on a lower T/F (H1).