Discussions on Order Flow/Volume | Page 25 | Metals Mine

Options

Go to
Permalinks
Print Thread

Similar Threads

How to flow with the order flow? 26 replies

Applying Order Flow & Volume Profiles To Futures Trading 121 replies

Reading Order Flow 19 replies

Order Flow 26 replies

Oanda Order Flow Box 5 replies

Attachments: Discussions on Order Flow/Volume
Exit Attachments

Discussions on Order Flow/Volume

  • #481
  • Dec 3, 2021 2:34pm Dec 3, 2021 2:34pm
THANK you so mutch Don Pato and sorry if i ask you again somthing that you have already explained before several times
i will try first by my myself(couse i really hate give up) to interpratate this indi if i will don't achieve any result i will contatct you for private mentoring.

For now thank you are a great teacher i hope one day to become like you
  • #482
  • Dec 3, 2021 3:02pm Dec 3, 2021 3:02pm
by the way this indicator it s awesome.....
  • #483
  • Dec 3, 2021 3:29pm Dec 3, 2021 3:29pm
Quoting dieguito80
by the way this indicator it s awesome.....
You will have to pass that on to the author. I think his name is Ahmed. But he wrote it... I'm just not that smart.
@xxxx§|[::::::::::::::::>
  • #484
  • Dec 4, 2021 7:46am Dec 4, 2021 7:46am
Thanks DonPato for sharing great information about your trading style and market knowledge. Read all thread and I really liked it. Will start reading again There are so much great gold nuggets...
Question: is there any use of cyan and magenta colors (buys and sells out of profile value area)? I find it a lot easier to see only in two colors instead of four. Just asking if it adds any value to have it, or I can safely remove them and make delta profile only 2 colors.
Regards
  • #485
  • Dec 4, 2021 9:37am Dec 4, 2021 9:37am
Quoting za1jcas
... Question: is there any use of cyan and magenta colors (buys and sells out of profile value area)? I find it a lot easier to see only in two colors instead of four. Just asking if it adds any value to have it, or I can safely remove them and make delta profile only 2 colors. Regards
I used to be the same way in my thinking...and I believe that when I started using this tool, I did exactly that...

However I found value in knowing where (what price) the "bulk" of the trading was done as it also gave me and idea how price was effected by this bulk...In addition, when I see price moving large distances on only 30% of the tick activity I can clearly see where the liquidity is and is not. Again...seeing price move large distances on only small trading volume (<30%) means a lack of liquidity...while conversely, seeing very little movement on large trading volume (>70%) usually indicates a densely populated area of liquidity.

As I am so fond of saying the real value of this tool is being able to detect where the liquidity is located. Best of luck
@xxxx§|[::::::::::::::::>
  • #486
  • Dec 8, 2021 9:03am Dec 8, 2021 9:03am
Hi,
Trying to scalp m1 chart with m15 delta profiles intraday. Wanted to share with other peoples who maybe are interested in lower timeframes. Noticed that these absorption zones and active buying/selling zones are well respected.
Attached Image (click to enlarge)
Click to Enlarge Name: gu.png Size: 112 KB
  • #487
  • Dec 10, 2021 3:04am Dec 10, 2021 3:04am
Hi,
Another example of scalping trades on the absorption area tests. Probably not scalping and taking bigger profits would be more profitable, but my nature is like this and I cant do anything about it. After few days of live scalping I can feel that probably I will make it in this trading game Thanks again DonPato for sharing great knowledge, it's like putting on magical glasses and seeing where real buyers and sellers are, really different thing than traditional TA.

Regarding your answer about different colors then out of value area I understand and agree about it. However I can't process quick enough that information and charts looks a lot easier to read with just 2 colors.
Attached Image (click to enlarge)
Click to Enlarge Name: example of eur usd scalps.png Size: 88 KB
  • #488
  • Dec 10, 2021 12:58pm Dec 10, 2021 12:58pm
Quoting za1jcas
...Regarding your answer about different colors then out of value area I understand and agree about it. However I can't process quick enough that information and charts looks a lot easier to read with just 2 colors.
I understand what you are saying and again repeat...I used to view the charts in the same way. However, using this tool...using the understanding that only 30% of the order flow is causing a large price movement tells me where the liquidity is and is NOT.
Take a look at the below screen shot of daily GBP/USD
Attached Image
Do you see that for the last three profiles (daily candles) The majority of the aggressive order flow has been on the buy side...and yet, price is ranging at the bottom of six week move down. This tells me that all that buying as run into a WALL of selling liquidity and every attempt to push price higher is absorbed buy the selling interest...yet this selling is at the BOTTOM of a large move down!!

Now look at today's candle....the open candle. Note again that 70% of the buying was at the bottom and NOW, with a mere 30% of the order flow, price has jumped higher. Do you see this in the change in color?

What happened?

My bet is that active buying has "chewed" through the late selling liquidity and those late sellers have stopped out (resulting in a wave of buying). This wave is NOT a major wave but rather an indication that the seller's have given in. Note also that I saw this three days ago, and have positioned longs that are now in profit, while most are still "waiting for confirmation". This was NOT a bottom where absorption played a role in reversal...in fact it is just the opposite. The "trending concerns" were trying to absorb the reversal attempts and after three days, had nothing left to hold them back. The buyers "won" this little battle.

It makes sense when you think about it...we are now just a couple of weeks before Christmas, liquidity in the market is drying up, and people are closing out positions and getting ready to enjoy the holidays. AND its Friday!! So the selling liquidity is taking a small loss...no big deal...and will most likely look for opportunities in the new year. For now...buyers (especially scalpers like you) are enjoying the volatility, of low volume and making small gains.
@xxxx§|[::::::::::::::::>
  • #489
  • Dec 10, 2021 2:24pm Dec 10, 2021 2:24pm
Quoting DonPato
This tells me that all that buying as run into a WALL of selling liquidity and every attempt to push price higher is absorbed buy the selling interest...
Hi, DonPato! Please tell me where you see walls on forex? As I see the main "problem" of forex is that the fee for market order and for limit order are equal. So there is no sense to use limit orders ever. Also the forex market is highly robotized, so there is no problem to use market orders again. The only one thing the liquidity sits at are liquidation orders or/and stop losses. But there is no chance to see them (only fill or kill order, but we don't have and will never such a liquidity). And I'm talking here about cme futures data, not fake forex tick of course.

So, Master, please tell me what "walls" you are talking about? I wish I can see them like you do (to see walls like on crypto). That will be imba.
Observer effect
  • #490
  • Dec 10, 2021 2:57pm Dec 10, 2021 2:57pm
Quoting ryuryu
Hi, DonPato! Please tell me where you see walls on forex? As I see the main "problem" of forex is that the fee for market order and for limit order are equal. So there is no sense to use limit orders ever. Also the forex market is highly robotized, so there is no problem to use market orders again. The only one thing the liquidity sits at are liquidation orders or/and stop losses. But there is no chance to see them (only fill or kill order, but we don't have and...
The basic structure of any and ALL financial market are orders...whether you "see" them or not. The fact that the spot FX market is decentralized only means we have no access to the data that other markets have...it does not mean they don't exist. In fact this order structure is the basis of the interbank system.

The "wall" of liquidity I mentioned is deduced...not seen. In fact on any and ALL financial markets it is this way. I am speaking of depth of market here...the order book, or level 2 quotes...or what ever else you may have heard it called. The liquidity is place (in all markets) at levels that are only "seen" in the order book (in the central clearing house, of most centralized markets) or within the major banks participating in the interbank system.

These levels are not "seen" or accessed until the last quoted price come to within 10-15 pts (pips, cents, or what ever market you trade). This is not to mention the fact that there are many "iceberg" orders...OSO orders that art triggered when the last transaction reaches a predetermined level.

So how do I deduce this "wall of orders"...again I repeat...by price reaction to the order flow...EVERY MARKET ORDER is filled by an opposing liquidity order...the order flow seen (extrapolated on the spot fx charts) MUST be filled at a price and quantity opposing it. This is the structure of the market.

Therefore if I see that 70% of the order flow is mostly buying...and that all this buying can't seem to move the price more than 20-25 pips for THREE DAYS...I deduce there is a great deal of liquidity "absorbing" this MARKET order flow. Lots of buying...very little price movement upward. Then 1/2 way through the third day..."whoosh"...price jumps higher...on very little (<30%) of the day's order flow. This tells me that either (1) a participant or computer program if you wish, withdrew a large amount of liquidity that was absorbing the buying...or (2) there simply wasn't anymore left...it was all used up.

Either way, 50 pips higher on lower volume, than the previous 3 days...on a FRIDAY...two weeks before a major world wide holiday. This is what we in law enforcement call "a clue"!!

The decision to use market vs limit orders is up to the individual participant...and cost is only one of many factors involved in that decision...perhaps a major entity (like Toyota) wants to liquidate USD for JPY at a particular price to "lock in" P/L for a particular quarter. Perhaps this same entity wishes to hedge an outstanding investment in the US currency by taking a long term position in JPY. This king of information is unknowable outside the corporate boardroom. (Or where ever else these decisions are made).

Bottom line: It just doesn't matter to me at the level I trade. My job is to observe the order flow...watch for what I call "signs and symptoms of exhaustion" and use that to my advantage...its working out very well for me. But if you prefer a moving average...your probably not liking this rise in price right about now.
@xxxx§|[::::::::::::::::>
  • #491
  • Dec 10, 2021 3:37pm Dec 10, 2021 3:37pm
Quoting DonPato
The "wall" of liquidity I mentioned is deduced...not seen.
Quoting DonPato
But if you prefer a moving average...your probably not liking this rise in price right about now.
I prefer math. Unfortunately I can't see invisible non-existence walls like you do.

But anyway thanks for the detailed answer
Observer effect
  • #492
  • Dec 28, 2021 5:05am Dec 28, 2021 5:05am
Quoting DonPato
{quote} The basic structure of any and ALL financial market are orders...whether you "see" them or not.
Hi DonPato, I've been reading your content thorugh FF around Volume and I find your teachings very precise and logical. I've been trying to find an indicator to show Order Flow on the FX markets, or at leat a proxy to it by using tick volume. Have you ever tried the Session Volume indicator from Trading view (phot attached)? If so, do you have any feedback from it?

Cheers to more success!

djsmig
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot.png Size: 34 KB
  • #493
  • Dec 28, 2021 8:31am Dec 28, 2021 8:31am
Quoting djsmig
... Have you ever tried the Session Volume indicator from Trading view (phot attached)? If so, do you have any feedback from it? Cheers to more success! djsmig
I have not tried this indicator. From what you posted it looks promising. However, I see that this indicator is posting BOTH buying and selling at each level...I have found that it is much less complicated to see just delta volume at each level. (Buying-Selling = Delta). I do like that your indicator is registering the VPOC (dark red line). I've found this to be very helpful as well. Check and see if the author of this indicator offers a Delta setting on the volume.

Best of luck
@xxxx§|[::::::::::::::::>
  • #494
  • Dec 29, 2021 4:20am Dec 29, 2021 4:20am
Quoting djsmig
{quote} Hi DonPato, I've been reading your content thorugh FF around Volume and I find your teachings very precise and logical. I've been trying to find an indicator to show Order Flow on the FX markets, or at leat a proxy to it by using tick volume. Have you ever tried the Session Volume indicator from Trading view (phot attached)? If so, do you have any feedback from it? Cheers to more success! djsmig {image}

You won't find volume for fx since trading is done against dealers.
  • #495
  • Dec 29, 2021 5:34am Dec 29, 2021 5:34am
Quoting DonPato
{quote} I have not tried this indicator. From what you posted it looks promising.
It is a built-in indi from Tradingview. I will try to code the delta myself and post it back for review. Thanks for the feedback Don Pato

Best,
djsmig
  • #496
  • Dec 29, 2021 10:17am Dec 29, 2021 10:17am
Hi Don,
I would like to have a discussion on a specific type of price-volume activity seen in DOM.
A trade should be based on an assumption based on facts
  • #497
  • Dec 29, 2021 12:41pm Dec 29, 2021 12:41pm
Quoting djsmig
{quote} It is a built-in indi from Tradingview. I will try to code the delta myself and post it back for review. Thanks for the feedback Don Pato Best, djsmig
Best of luck...I am not a coder and wouldn't know where to begin...I would be very interested however in your results...
@xxxx§|[::::::::::::::::>
  • #498
  • Dec 29, 2021 12:51pm Dec 29, 2021 12:51pm
Quoting maverick2017
Hi Don, I would like to have a discussion on a specific type of price-volume activity seen in DOM.
Please proceed...do you have a specific question? I assume, "DOM" means "depth of market". Perhaps you might tell us what type of DOM you are looking at and we can go from there...I do know this:

  1. DOM in the spot FX market is only available from Level 2 or higher brokerage quotes. This service in my experience is cost prohibitive.
  2. DOM in the futures market is readily available as part of most services, however, the bid and offer only extend to 10 levels (ticks, pts, pips, cents) above and below the last transacted price. As an example: if price for YM is 36000, one can see the depth of market in offers up to 36010, and depth of market in bids down to 35990. (Because in YM each point is a tick).
  3. As the last transacted price moves higher, the DOM on the offers moves higher also, and the DOM on the bids also moves higher, leaving behind what you once saw at 35990...now at 35995 (or what ever the price advance was). It is the same, in reverse, if price moves lower

Most of the time the DOM quotes move so rapidly my "slow thinking" mind has great difficulty keeping up. This is why I watch Delta at each price level...it slows down this DOM activity to a speed I can both watch AND think.

Was there something specific you wanted to discuss?

@xxxx§|[::::::::::::::::>
  • #499
  • Dec 30, 2021 4:09am Dec 30, 2021 4:09am
Quoting DonPato
{quote} Please proceed...do you have a specific question? I assume, "DOM" means "depth of market". Perhaps you might tell us what type of DOM you are looking at and we can go from there...I do know this: DOM in the spot FX market is only available from Level 2 or higher brokerage quotes. This service in my experience is cost prohibitive. DOM in the futures market is readily available as part of most services, however, the bid and offer only extend to 10 levels (ticks, pts, pips, cents) above and below the last transacted price. As an example: if...
I trade index options, without applying strategies because they are not expensive. So, I watch the DOM for them and my broker shows 5 levels on bid and 5 on offer side.

The activity troubling me occurs before market trends. Understanding this action will allow me to enter at the beginning of a move or one can say more aptly, when I THINK a move is about to start (there are many more ways market moves while a direction is being established).
What happens is the volume, limit orders, on both bid and offer side is normal, let's say between 1000 and 2000. Then the market rises 5 levels and limit orders on offer decrease to 400 (So, I'm thinking that if it is really bullish then the 400 limit orders or the reduced limit orders should be absorbed easily). Market then moves back 5 levels to where it was previously and the limit orders on bid side, which were between 1000 and 2000 before, have reduced to somewhere around 400 (now the clue which market was giving earlier that it is bullish has disappeared because 400 is also a relatively small volume to be absorbed). Trouble really is that both sides start to mirror each other and if I have a position open then I don't know what to do. It might continue moving in my direction or it might reverse and this is when FOMO kicks in.
The real question is why are the two sides mirroring each other and if there is a way to look beyond the cloud of numbers then please help.
A trade should be based on an assumption based on facts
  • #500
  • Dec 30, 2021 10:56am Dec 30, 2021 10:56am
Quoting maverick2017
... The activity troubling me occurs before market trends...
What you so aptly described is very typical of market behavior and as you have noted, it occurs right before the very move you wish to catch. Since you are only watching the DOM and even that has only 5 ticks above and below the last transaction, it is difficult to know if the market might be preparing for a reversal or a continuation...on such a micro level these clues are very hard to find. I would humbly suggest you that using some from of charting might help you "bias" your entries with additional data.

So what happens in your description is typical...the "normal" liquidity you mention when price rises, is not absorbed, but instead "use up" by the market orders causing the rise. (Again, 5 ticks rise isn't all that much and seems more like "market noise" than price movement.) However, the fact that liquidity went from 1,000-2,000 down to 400 tells me that it was either used by market orders or withdrawn (sometimes by "spoofing" programs). And the fast reduction in liquidity shows the activity DID at some point cause price to rise, but not very far where market orders fizzled out and price returned to where it was before.

Quoting maverick2017
...The real question is why are the two sides mirroring each other ...
That the two side "mirror" each other tells me that interests on either side are about matched...I'm sure you broker has a vested interest in seeing this happen. So the only way price will move is for one side to either withdraw (by a significant amount) their liquidity or for it to be used up by more market orders. You have with I have come to call a "stable" range. Albeit 5 ticks. Honestly speaking I have never attempted to keep my trading to this small a level. As you mentioned...it is "a cloud of numbers". My best suggestion might be for you to watch which side of the liquidity reduces more quickly than the other...and this will be instantly reflected in price movement in that direction. Or broaden your view point with charts...I think at this level even a 100 tick chart would be "calming" and allow you to see beyond this cloud.

Bottom line: The advance in price you speak of, most likely triggered an algorithm that withdrew liquidity from the market quickly or perhaps pounded the market with the opposing market orders, to cause this minute 5 tick move. Then once this small move was accomplished, the computer exited quickly and pulled its remaining liquidity on the other side of the order flow. This cause the return back to where you started...but now you see "balanced" liquidity on both sides of the market...

I hope this makes sense
@xxxx§|[::::::::::::::::>
0 traders viewing now