I agree, I do the same. I go into the day only with an awareness of my levels and the week's key reports. After the market opens for 5-10 min, I pretty much know all I need to know to begin my first trade. Within the 1st 20min, I usually have a very good idea how I plan to trade the day and the plan then develops throughout the day.
I wish I could approach the market like some of you and go long then go short or whatever your strategy. I have tried just about every type of strategy to find what makes me feel comfortable.
Even now, We could hit super capitulating bottom at a century number and test it 3 time on lighter vol and I know its going up, but when I go long, every point, up or down feels like i just committed a crime. It's a mental block that I have to deal with later. Night before last I sent my personal account trades breakdown to ofa, because I know they didnt believe me when i was there. (I had not looked at my % like that before). And when I saw a 53% return in 3 months with a 95% daily win rate, I started thinking about everything I shouldnt, and monday I couldnt pull the trigger on the open because I didnt want to mess up. Took one higher risk trade in the afternoon and got stopped out. I couldnt attempt it any more like normal because I was scared of losing. Now I have figure out how to deal with it. It seems like its a constant battle between me and myself. Thats prob the real reason I didnt trade today. This never happens
The opening trade is usually my smallest position and I don't always take it for the same reason though it often positions you in a great location. I believe the psychology of trading is something that will always be a work in progress. Somethings that help me are not oversizing my positions and having faith in my expectancy to keep trading the way I'm supposed to even if the trade was not profitable. The daily goal is never the profit but to trade correctly; profits should result if the methodology is solid. Even for a trader with a lot of natural talent for this, the method always needs to be clearly defined. It doesn't have to be mechanical but it should be well defined enough so that at the end of the day when you go back over your trades, you can identify your mistakes clearly. That's the only thing I know of that can help my psychology, to be very clear about the approach, and then to do my best to be as objective as possible when I'm getting stopped out 3-4 times in a row and I see the next compelling trade.
It's just a training course I took, when I decided to concentrate on timing my entries to where I could limit my risk, because my biggest weakness at that point was getting shook out.
There is a thread here under "OFA" or "order flow analytics" I think I described my experience with it.
For me (I had never approached daytraing at such such a micro level before) It just happened to fill the gap in my trading. it's one of those things, I use it as one part of my methodology.
If anyone is going to daytrade for a living, I think that someone must know orderflow for the simple fact of entering positions in very specific spots that you cant do with an indicator because of lag. But that's just me.
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Knowing Orderflow trading without having a super reliable consistent foundation means nothing.
I am going to get personal and bold with this post because some of the things (not all) a person needs to make money consistently is to qualify EVERY trade (first) based on things in the market that are VERY, VERY reliable.
If you use these few things and absolutely never let a loser run, You will beat 90% of all traders. I have a ton of things that I use to raise the odds higher but I will list the foundation for which direction I go.
There are 2 things that cycle back and forth every day with such reliability that it's ridicules. And why anyone would not base their entire system of of this for reliability is beyond me. This is what i used for years in swing trading until I started a mission to time my entries in order to have NO visible drawdowns on my longterm P&L.
I will will answer your question when we get to the orderflow part.
The main things I monitor are total volume cycles and fear and greed cycles.
when you know these levels in extreme times all the way down to a normal chop session.(chop sessions are hard)
Your confidence will be so high that it almost makes you cocky.
I can short into any level I want to at extremes, The big money question is where in that level do I go, because IF there is another push higher, I have to cut my loss quick enough so I can short again at the next higher level. The reason I almost never have a down day is because at some point during that day, price will retrace some. But alot of times, I ride from the highest levels till I feel we have panicked to the downside. The main thing that will make you tons of money is quantifying in your head the vol levels in between swing highs and lows.
Me personally, while daytrading, can't stand to lose even a hundred dollars on one attempt. Because I know that if it is a day where longer time frame players are coming in, my normal panic volume levels may be off and sometimes I have to try 3 or 4 times higher, even after my first extreme pick. Every now and then I will get jerked around 5 or six times and throw in the towel for the day.
In order to do this type trading, I have to read orderflow, because if I get stopped out and its a false break, I have to switch to a momentum entry and feel confident. If we are somewhere in the middle of swing highs and lows, I have to trade alot smaller and take profits quick.
Looking at the broad picture and studying tons of people who trade for their living. Most have records ranging from 60% to 70% daily win rates. And looking at all the tools that they all use. You can't find an orderflow expert that swing trades. They normally go for 2-5 points, where the 70% win statistics are.
One of the most useful parts of ofa is the volume clusters that print as little boxes on the momentum chart. (I would classify the cluster chart like an easy to read P&F chart) The vol cluster is the highest area of vol within that particular directional momentum run. It lists what %vol it is in relation to the whole bar. Greater than 50% is notable. The main thing to understand about a vol cluster is that is doesnt matter so much that a large cluster printed. It matters which side is going to gain control from that point. It gives you a defined line in the sand, because you know that when price leads 6-8 ticks (ES) off. The wrong side's stops should start to kick in. Using that little bit of info and combining it with, near s/r levels and so on, You can build strategies on fading stop runs or getting in and letting the stops slingshot you into a safety net. You can use this theory also on larger timeframes to identify stopruns out of wedges, flags, etc. You have to know why price shot out of the gate before you can trade it. I try to fade upside stopruns for my tightest stops.
The safest way to use the the cluster charts is to wait for the breakout and a pullback into the latest set of clusters that are jumbled together, so you know there is a solid war line.
Hope this helps a little.
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