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in the moment of heat it´s more difficult. the delta is shifting and so on... one second it looks good the next not so... in a faster market i would buy the close on the first green bar. that one looks and looked then like a good oppertunity. because of the time of day and the more illiquid market i hessitated and then saw the weaknes so i tried to get in more closer to the vpoc with lower risk...
fiki, i wasn't criticizing just wondering out loud if my reading of the flow was correct! either way great entry, hardly any heat and great r:r thanks for your continued updates really helping me.
rassi. critics are welcome. thats how we learn. the "after fact" comment was a "joke". the bar u refer to would be optimal but like i wrote to david. it "looked" like a buy until all those sellers started hitting the bid. and i again looked like my avatar swearing like a...
rassi i use 2 units for trades. 1st i exit 68 ahead of poc 68.5 (poc ont the chart i posted earlier today) and the next target was my value high 70 but price turned 69.75 missing my limit so i exit 68.5 on the close of the 5 range bar i look at.
To be honest, I'm confused. I agree the level is important, but I thought that the thing to look for at a level if wanting to go long would be high volume at the ASK or lower volume at the BID. I then saw a recording on MarketDelta where they talked about the concept of high volume at a level where the demand is absorbing the supply, so even though there is a lot of selling at the bid in the bar it can be a sign of strength. If volume is high on the BID side at a level of support and it means they are hitting the bid hard, does it not also mean that someone is accumulating/buying at the level as well? I'm very new to reading orderflow and I'm wondering if I am looking for the right things. you say the entry was bad, but 2 tics of heat, seems minimal to me. Can you show some pics of what to look for a support and resistance in regards to orderflow? Also, was it more the Delta that gave you the clues? When you say pullback delta, do you mean the bar that you were filled on?
David: I made this picture for u guys on the pullback data on Monday but for some reason i never got to post it. The second picture is from my journal on a entry i made that shows what i mean. The pullbackdata is the COT in OFA terms. But instead of a just the delta it shows a bar on the side of the developing bar. This is good because it gives u a glue on how the period will close. I trade from a 5tick rangebar chart and my trigger is usually the close of the bar. I define a momentumshift as a 5 tick reversal. By looking at the pullback i can hopefully get better trade location since i´m early.
First I´m no expert but I´ve watched a lot of stuff concerning orderflow and I’ve been very actively trading it for a while now starting with pure DOM-trading and now with the breakdown indicator/ladder. Many are very sure of their technique - at least in their material. I have a different opinion. I think there´s a lot of noise in the orderflow. Large trades are executed through algorithms and other size is based on calendar or inter-product spreads and so on. The markets purpose it to facilitate trade but the buyers/sellers are in the market for many different reasons, not just profiting from speculation. So for me value is the most important part of my trades. At least the successful ones. Intrabar orderflow comes second to me. I use the orderflow to help me handicap the odds in my trades.
Now concerning the bid/ask side. I think both ways u described are correct. If I go long I like to se a lot of trading at the ask because this evidence for buyers initiating trade. But there are 2 types of reversals: 1) sellers stops initiating/selling drys up. You se this in weak prints. Only a few contracts are traded at the bid at the pricelevel you are watching or if it is a retest less then on the previous test. 2)buyers start to respond (climax). This is the most common. Buyers start to accumulate and sellers over commit. You se this as a large volume node in the bar. If I se “big” volume at the bid after a rotation down and price reverses the sellers probably entered late and are wrong. So as long as price is over I view this as bullish. Many times the next bar makes a retest but its hard to get a fill at the vpoc since there is a lot of competition for contracts. A lot of short sellers will try to get out breakeven or with 1-2 tick loss. But if price goes under the node it the opposite. The knifecatchers, buyers, picked the wrong bottom and odds are it´s a continuation pattern. Now if your looking for long and price is over you don’t want to se a lot of volume at the levels above, especially at the bid because this shows that sellers are responding and initiating. U want to see just low volume and green flow when it clears the node. So it 2 different patterns: responsive and initiating.
Concerning the “bad” entry: it bad from a orderflow perspective. I got “lucky”. Now I would argue I made a good valuation and that’s why I made profit. Its bad out of orderflow perspective since price went under the high volume node and large traders wanted it to go down since they initiated large trades at the bid. So at the time of my fill I was opposite to the large orders. If I just went with the flow I should of sold. But probably other traders using algos made the same call as I since all that selling was absorbed in 2 ticks. The really bad call was entering on a limit at the vpoc. When u enter with a limit more often then not price will go through your order. The principle is most traders are wrong. So if you se a big number at the bid I DOM, they will be wrong either by not getting the fill and missing a great trade or by getting a fill and having price go against them. So if I believed I would get a fill at the vpoc using a limit order then logic dictates that I would get a print under vpoc witch would be bearish. Then it would be better to wait for the next bar to see what happens. Or if I belive this was the reversal I should have entered market 1 tick above the vpoc.
Don’t know if this clarifies it a bit. The thing is, it´s never easy or a sure bet. Like Steidlmayer expressed it : try to make the hardest trade rather than the easiest trade; if it's easier to sell, it's usually the wrong way to go, and vice versa.
This post was edited something like 5 times. Don´t know whats worong with me but i confused the words ask and bid all over. Sorry for this. Hopefully nobody read it yet.
Great posts david and fikki, my understanding is say you are looking for a long in a specific area, the senario of many sellers hitting the bid and then crucially getting trapped as price moves against them often results in a sharper impulse move as they get stopped out.
Whereas accumulation at that level can take longer to play out.
I would be interested to see some others comments on the vol divergance that benbrooke uses on his 500v chart, I have been following that and it gives some great signals combined with the profile and order flow.
rassi. i think benbrookes vol divergency plays are great and i study them closely. its basicly the same thing as i wrote in the previous post. the volume bars shows u how much a constant volume factor drives price. with the delta momentum u look for a divergency where price moves in one direction but buying/selling drops off or moves into the opposite direction. compare to what i wrote on the intrabar analasys. the weak print. i get a retest with less initiating action. the vwap shows you objectively vertical movement. that is when price has moved away from the ”fair price” that much that warrents you attention.
there are many ways of looking at a chart. the chartsetup i show works for me. i use rangebar and i´m profitable with that so i don’t feel the need to try the volume bar chart approach. but i also look at divergences and have my way of measuring vertical movement.
