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Discussions on Order Flow/Volume

  • #281
  • Jan 22, 2020 7:49pm Jan 22, 2020 7:49pm
Quoting Iamfx
G'day Don Some might consider it spoon feeding(myself included) but if you get a chance could you post a chart at your time of entry so I can have a look at what you consider a trade trigger? Thanks heaps for all your work here
That was done... check out the links above entitled "here"
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  • #282
  • Jan 22, 2020 8:34pm Jan 22, 2020 8:34pm
Yes on the Cad trade pg11 I see the order flow inversion then a largish block of selling with approx 10 pip bearish response but not any specific bar as a trigger. Would you consider a strong bullish bar in amongst this setup as a trigger or you mostly ignore price action signals?
We are all One. Be present. Be the Observer
  • #283
  • Edited 10:09pm Jan 22, 2020 9:39pm | Edited 10:09pm
Quoting Iamfx
... but not any specific bar as a trigger...
There is no specific bar. That was the point of posting that entry. I believe that I mentioned that if you look at the typical technical analysis you would see only bearish bias. What I watched was the order flow and price response (or lack thereof). In this instance my "trigger" was the clear absorption taking place. In addition I was expecting price might spike lower but that didn't happen.

The order flow was changing and in fact prices did go sideways for a few days before lifting...

Quoting Iamfx
... Would you consider a strong bullish bar amongst this setup as a trigger or you mostly ignore price action signals?...
No I do not ignore price action signals, it's just that my prompts to enter occur before these signals are complete. So by the time they present it's often too late. Further many will wait even more to "confirm" the signal creating an even larger distance (in pips)... pips that go into my account and I can then comfortably absorb any volatility (common and swing points) that cause most traders to stop out or bail out.

I hope you can understand that my trades are based on my candle by candle observation and analysis of the order flow and volume NOT on a particular signal or configuration. It is literally something like this:

  1. Is the order flow'normal'?
  2. If the answer to question #1 is "yes" then expect price to continue what it's doing. (Falling, rising, ranging)
  3. If the answer to question#1 is "no" then expect price to change. (Falling to range, rising to range, ranging to break)
  4. Remember there are only two overall price conditions. Order flow dominance, or order flow balance. One ALWAYS ends in the other... ALWAYS. (see my thread on this subject, Price, order flow, structure)

So you see there really is no "signal" or "trigger" it is just good observation and decision making.

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  • #284
  • Jan 22, 2020 11:02pm Jan 22, 2020 11:02pm
Ok thanks. Thats what I'm trying to ascertain. An insight into the focus of your intense concentration. I will study further.
We are all One. Be present. Be the Observer
  • #285
  • Jan 23, 2020 11:38am Jan 23, 2020 11:38am
@DonPato I just wanted to ask which product of Order Flow are you using on ctrader ? ( not volume profile or delta )
  • #286
  • Jan 23, 2020 11:54am Jan 23, 2020 11:54am
Quoting vivaldi2
... ( not volume profile or delta )
I'm not sure what you are asking?? If you've read this thread you've seen my charts. AND you've been provided links and configuration settings. What else are you referring to?
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  • #287
  • Jan 23, 2020 5:46pm Jan 23, 2020 5:46pm
Follow up on the USD/CAD - Long:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 66 KB

Where as yesterday we saw a buying "whoosh" today the buying was mostly absorbed, and most of the volume appears to have been selling. In addition this selling looks to me like either profit taking and/or short term buyers either keeping stops tight or trying (and failing) to jump on the buying bandwagon a bit too late. (read: retail buyers stopped out).

My stop on this trade is below the last balance zone and I will leave it there until I see another opportunity to raise it and lock in more profit. I do not see (at this point) any serious buying interest at the current levels, but it appear that 1.3085-1.3100 area might attract buying if price were to return to this level. I will give this trade one more day to make new highs, but it would appear that the "whoosh" is all we might get.
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  • #288
  • Jan 24, 2020 1:41am Jan 24, 2020 1:41am
Quoting DonPato
{quote} I'm not sure what you are asking?? If you've read this thread you've seen my charts. AND you've been provided links and configuration settings. What else are you referring to?
Sorry, I just missed your post about asking the developer to provide delta volume profile and I thought the product was just a simple volume profile without delta profile . thanks for tolerating newbies like me !
  • #289
  • Jan 24, 2020 2:22am Jan 24, 2020 2:22am
please,what tool do you use for delta volume profile?Do you trade using NT8?
  • #290
  • Jan 24, 2020 8:15am Jan 24, 2020 8:15am
Quoting Emma1
please,what tool do you use for delta volume profile?...
If you read this thread all the way through you will see various places where I have placed the link and the setting to the tool I use for delta

Quoting Emma1
...Do you trade using NT8?
NT8? Is this ninja trader? If so...no I do not use ninja trader. For my futures trading I use Trade Station, and for the cash FX and metals I use cTrader.
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  • #291
  • Jan 25, 2020 7:41am Jan 25, 2020 7:41am
I know DonPato has already talked about identifying trade trigger points, but I'll add my thoughts, as I feel like I have something to contribute on this topic.

There are various tools and strategies available to the trader to help maximise profits and minimise losses. Some of those tools and strategies give clear trigger points (e.g. the strategy popularised by Bk8 of this forum), while others require observation, analysis, and interpretation from the trader in order to arrive at a decision to trigger a trade. Since this thread started I've spent quite a long time looking at applying this approach to chart data. In my opinion the order flow/volume approach requires a significant amount of observation, analysis, and interpretation from the trader. By that I mean that you need to be looking at the bigger picture, how everything fits together (or doesn't in some cases), and you need to evaluate the context of what you're seeing. To put it another way, you need to be able to filter out the important from the insignificant, and recognise anomalous observations. Some people will find this easier than others because they already have the required skills and experience. Although I'm new to Forex and trading, a large part of my day job involves sifting through data to discover relationships and patterns. Until June 2019 I had never even looked at financial data, but I believe that 'data is data', and so I am applying over two decades of data analysis experience to the Forex market. If you are a highly analytical, logical person, and are used to mentally processing your observations and discarding those that are clearly a red herring, then I have no doubt you will find this significantly more straightforward.


TLDR; There is no shortcut or free lunch. The order flow/volume approach does not give a simple or quick and easy trigger point. You have to learn to observe, analyse, and interpret, and depending on your current levels of data analysis skills and experience, that could take anything from a few days to years of practice.
Monopoly Money Trader
  • #292
  • Jan 25, 2020 3:16pm Jan 25, 2020 3:16pm
Quoting Flunky
I know DonPato has already talked about identifying trade trigger points, but I'll add my thoughts, as I feel like I have something to contribute on this topic. There are various tools and strategies available to the trader to help maximise profits and minimise losses. Some of those tools and strategies give clear trigger points (e.g. the strategy popularised by Bk8 of this forum), while others require observation, analysis, and interpretation from the trader in order to arrive at a decision to trigger a trade. Since this thread started I've spent...
Well said!! Thank you for this contribution.

While I really don't think of it as data analysis that is exactly what you do when you look at a chart. And because I am a visual learner I always lean toward visual representations of the data, this the histograms appeal to me visually. But there are programs that do present you with the raw data. I just can't analyze the numbers quickly enough. This is why the graphics help me.

I congratulate you on your understanding and adaption to your native talents. Thank you again!
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  • #293
  • Jan 25, 2020 10:58pm Jan 25, 2020 10:58pm
Quoting DonPato
{quote} Well said!! Thank you for this contribution. While I really don't think of it as data analysis that is exactly what you do when you look at a chart. And because I am a visual learner I always lean toward visual representations of the data, this the histograms appeal to me visually. But there are programs that do present you with the raw data. I just can't analyze the numbers quickly enough. This is why the graphics help me. I congratulate you on your understanding and adaption to your native talents. Thank you again!
Hi, by the way,,
i wonder that if histogram charts is just a visually way of raw numbers(number matrix of a bar), or they are totally diffrent?
as i know histogram charts known as volume profile ,however number matrix known as Footprint chart, and they are different indicators
learning...
  • #294
  • Jan 26, 2020 10:10am Jan 26, 2020 10:10am
Quoting hefei
{quote} Hi, by the way,, i wonder that if histogram charts is just a visually way of raw numbers(number matrix of a bar), or they are totally diffrent? as i know histogram charts known as volume profile ,however number matrix known as Footprint chart, and they are different indicators
As I am not the developer of the tool I cannot say. I simply use it as a visual representation of the data and look for "normal vs NOT normal"
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  • #295
  • Jan 26, 2020 11:03am Jan 26, 2020 11:03am
Don,

A BIG THANK YOU for your easy-to-understand explanation into the basic mechanics of order flow... this is one of the best threads on FF and IMHO should be a MUST-READ for every trader regardless if they're fundamental traders, indicator-based traders, or PA traders...underpinning every price move is the order flow from one liquidity pool to another for both the Buy-side and Sell-side. Thanks for the insights and the lessons!

Best Regards,

Dave
  • #296
  • Jan 26, 2020 11:31am Jan 26, 2020 11:31am
Quoting davelansing
Don, A BIG THANK YOU for your easy-to-understand explanation into the basic mechanics of order flow... this is one of the best threads on FF and IMHO should be a MUST-READ for every trader regardless if they're fundamental traders, indicator-based traders, or PA traders...underpinning every price move is the order flow from one liquidity pool to another for both the Buy-side and Sell-side. Thanks for the insights and the lessons! Best Regards, Dave
I'm very pleased that this small thread has assisted so many in their trading journey. I'm also very happy that you realize that this is not a "system" or "method" it simply IS the market. How you adapt this information to your way of trading is up to you.
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  • #297
  • Jan 27, 2020 9:50am Jan 27, 2020 9:50am
Continuing follow up on the USD/CAD long:
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 115 KB

A gap higher over the week end has kept this trade going in the right direction (for me). But the buying that sent price higher seems weak...however on the other hand, I am seeing what appears to be some very serious selling, yet price does not yet seem to be responding. But clearly this selling is keeping price capped at this point. Price may come back to retest the 1.3160 area. I guess we'll have to wait and see. For now, the position has an open profit of 200 pips with a stop locking in 125 pips.
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  • #298
  • Jan 27, 2020 12:20pm Jan 27, 2020 12:20pm
Quoting DonPato
Continuing follow up on the USD/CAD long: {image} A gap higher over the week end has kept this trade going in the right direction (for me). But the buying that sent price higher seems weak...however on the other hand, I am seeing what appears to be some very serious selling, yet price does not yet seem to be responding. But clearly this selling is keeping price capped at this point. Price may come back to retest the 1.3160 area. I guess we'll have to wait and see. For now, the position has an open profit of 200 pips with a stop locking in 125 pips....
Great as always
  • #299
  • Jan 27, 2020 12:30pm Jan 27, 2020 12:30pm
Quoting Hooman86
Great as always
Thank you Hooman
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  • #300
  • Jan 28, 2020 6:12am Jan 28, 2020 6:12am
Hello, Don
in your post 29 i feel a little confused here:
after second chart:
"And while price did advance it was not "new" longs that were advancing the market it was really shorts stopping out...lots of them. So many in fact that the delta on each price bar was significantly greater than before the stall."

in the 2nd chart, at bar 6&7, you circled red area as 'dominant selling'
you said the rising of these 2 bars because of the stopping out of shorts. My thinking is The shorts here may set up stop orders which are buying agressive orders so that the transactions here should registered as buying. so why the areas of 2bars are red (which represents the selling)?
in order words, if shorts are stopping out their positions, they must use aggressive buying orders to liquidate positions and thereby, the circled area should be green(buying) rather than red（selling）..
i dont know where is my mistake, ,,
learning...
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