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Trading By The Order Flow


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Trading by Order Flow analysis is a method that combines few concepts such as Supply and Demand, Price Action, Market Profiling and plenty of common sense.

While in central exchange markets like stocks and futures, it is possible to subscribe to a level 2 stream, In Forex there is no reliable Level 2. But the good new is, you can conclude the order flow from simple naked chart observation.

 

Knowing where the order flow waits, on what price levels there is higher probability of support or resistance, will add the certainty needed for making sensible and logic entries, exits and position holding.

 

Starting Tuesday, Sep 19th, 2017, I will present my understanding of the Order flow analysis in a series of webinars, hosted in one of the biggest financial markets website portal.

If you are interested to join (it's free to attend), stay tuned to this thread, I will publish the webinar links in here as they come.

 

After every session, I urge you to post your questions, thoughts, and ideas in here, and I will do my best to help you through this exciting material.

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My Reply in the image below

 

I wrote a very long explanation and I lost it before saving my reply.

So you will have to settle for the short concept answer:

 

Keep reading the full story.

ask yourself who is stronger in that story, we see higher supply printed that result with our breaking demands, that should tell you that buyers are stronger in the market.

Zoom out and see that the main context of copper at that time was also moving up. so you have both micro and macro analysis aligned with you.

Trading the upper decision point you had marked was a bad practice, because according to your analysis price tested that level few times before, and according to what we can know from the chart, the level has un-known orders waiting.

So you should not have take that trade.

I would mark decision points at [1] or [2], in which it would hold either. Mainly because the bigger story is a very strong uptrend loaded from strong demand levels, while supply levels constantly being broken.

 

9-27-20177-50-51AM.thumb.png.6ffc26edeb0f60f8c1fcd7a04ef92a1f.png

Edited by the5ers
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Reversal study

 

Thank you for your great answer!

 

I understood that the micro-macro alignment give different powers ( in terms of probabilities ) to all the movements starting from a S/D zone. Not all of them have the same power ... Like the down move from point 1 into zone 4...it has no probability power, even if it is somewhat intense ... I will crunch this ideea for a while ... And I hope you will touch the micro-macro alignment subject in one of the future webinars ! :)

 

But, even if you said it's bad ideea to trade that upper decision point ( because of buyers being stronger ) ... I uploaded an image with my vision on this. Can you comment what's wrong there, or how you recommend to trade that situation ?

 

I mean, how do you know from the chart story that the force balance moved from buyers to sellers ?

 

http://i63.tinypic.com/iydhmr.png

Edited by izogrey
Changing the picture with a bigger one
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Thank you for your great answer!

 

I understood that the micro-macro alignment give different powers ( in terms of probabilities ) to all the movements starting from a S/D zone. Not all of them have the same power ... Like the down move from point 1 into zone 4...it has no probability power, even if it is somewhat intense ... I will crunch this ideea for a while ... And I hope you will touch the micro-macro alignment subject in one of the future webinars ! :)

 

But, even if you said it's bad ideea to trade that upper decision point ( because of buyers being stronger ) ... I uploaded an image with my vision on this. Can you comment what's wrong there, or how you recommend to trade that situation ?

 

I mean, how do you know from the chart story that the force balance moved from buyers to sellers ?

 

 

Dear Izogrey, thank you for your question. I like your dedication and learnign eager.

 

I will give you one comment at this point, as I think it is the most fundamental one for price reading.

Put a horizontal line to every High Or Low you mention, then scroll to the left and see the cause of the reaction.

 

That itself will help you understand how significant that level is. By this information, the picture of the forces balance will start to be clearer for you.

 

Let me know how it goes...

 

G

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Learn about The5%ers trading Opportunity.

This upcoming Sunday, October 8th at 18:00 GMT, we are hosting a live webinar presentation about The5%ers Trading Fund program.

 

In the webinar, we will present our background and vision, we will explain how we may enhance your trading potential, and the structure of the fund's work frame.

After the presentation, we will host an open microphone questions and answers session, with Gil Ben Hur, the founder and CEO of The5%ers Trading Fund.

 

Signup for the webinar in this link below

https://register.gotowebinar.com/register/4041413703384175874

 

Hope to see you among our crowd

 

Save the date:

Sunday, October 8th, 2017, 18:00 GMT

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Fail to return ( or Quasimodo or Over and Under or ... )

 

 

I will give you one comment at this point, as I think it is the most fundamental one for price reading.

Put a horizontal line to every High Or Low you mention, then scroll to the left and see the cause of the reaction.

 

That itself will help you understand how significant that level is. By this information, the picture of the forces balance will start to be clearer for you.

 

G

 

Hi there Gil,

 

Thanks a lot ! Even it was somehow cryptic, I think I got it! :)

 

I studied the FTR pattern ( linked with engulfing price action ) and S/R level that it creates and the influence on probabilities of returning a move which goes straight into those S/R levels ...

And I studied also "Over and Under" pattern ( or Quasimodo or whatever ... ) ( linked with sort of fake breakouts ).

 

I studied those two because when I put those horizontal lines, at the left was almost always one of two.

 

I want to crunch this for a while, but already my vision has modified: I search now moves which appears very powerful, but their probability of continuing over a S/D zone is weak, and the power of those moves just feed the power of the reversal ( because of weak probability ). Sort of contrarian ... This vision helps me to have a big picture ...

 

I have one more question, if you have some little time: which timeframes are better to use for identifying the decision points and S/D zones ? And I suppose the answer will be the larger ones .... :)

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Hi there Gil,

 

Thanks a lot ! Even it was somehow cryptic, I think I got it! :)

 

I studied the FTR pattern ( linked with engulfing price action ) and S/R level that it creates and the influence on probabilities of returning a move which goes straight into those S/R levels ...

And I studied also "Over and Under" pattern ( or Quasimodo or whatever ... ) ( linked with sort of fake breakouts ).

 

I studied those two because when I put those horizontal lines, at the left was almost always one of two.

 

I want to crunch this for a while, but already my vision has modified: I search now moves which appears very powerful, but their probability of continuing over a S/D zone is weak, and the power of those moves just feed the power of the reversal ( because of weak probability ). Sort of contrarian ... This vision helps me to have a big picture ...

 

I have one more question, if you have some little time: which timeframes are better to use for identifying the decision points and S/D zones ? And I suppose the answer will be the larger ones .... :)

 

There is no specific timeframe for price. However the risht approach of this, is to analyse and be aware of all the high timeframe levels, then trade it by Lowertimeframe reaction price-action.

It is really depends on your indevidual subjuctive personality, how pataient you are in waiting for the trade, and in handeling a live one. You should find this aspect while you trade live money acocunt (demo is only good to learn analysis, but not the trading mentality needed for being a good trader).

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