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Trading: CME Futures & US Treasury Bonds Futures (week) and Bitcoin (week-end)
Posts: 88 since Feb 2021
Thanks Given: 95
Thanks Received: 65
Even if they don't have the answers, they have deep pockets as you say, so regardless of the tools they use I will always try to align my trading in their direction because it's their deep pockets that move the market, not us retail traders.
Can you help answer these questions from other members on NexusFi?
Yes, I think that's always the right answer.
Market Maker is "the Smart Money" that traders always
talk about.
So... if you can figure out where She intends to move
the market, then you'll have that Edge (that traders always
talk about, also).
You guys have it backwards. The experienced retail trader has huge advantages over the hedge funds and banks. Having huge amounts of capital to invest is a liability.
We can be in and out of the market within minutes, hours, or days. We can pick and analyze markets, and be in and out as we need to. They can't.
First time poster but long time lurker.. have to say, this is the most intelligent thread on trading I have ever come across. Can tell there is vast experience and knowledge from many of the contributors.
I'm in the order flow camp but there is nothing out there close to how I use it.
I agree the retail order flow crowd is just that, a crowd. The tools & courses I see all try to label past events, categorising them.. and as one poster says: makes it all about looking for TURNKEY solutions. They transfer the critical judgement of the tape away from the trader and his intuition and instead are used as crutches for these "boxed" solutions.
Also agree with the reddit guy that focusing on Level II as a way to have a "free look" used to be a big edge but that has gone - for good. This corroborates with my own experience: I once traded in prop with highly successful scalpers who by their own admission saw their edge disintegrate and could no longer do it. Most have left the business.
My take: Order flow isn't a tool. It's a set of principles that's universal in how markets work. It can be done (traded profitably), but not if you go the "retail" way. Get the principles right and you are firmly on the right path (still have to walk it tho)
A good starting point is that it's volume and liquidity that moves markets, that's a pretty basic fundamental. If someone floods a market with heavy size relative to the liquidity on the bid, that price WILL go down as a FACT.. and it's not cos the MACD has turned.
In the immediate term, the only thing that exists in the market is the moment to moment pressures and I will go with Richard Wyckoff's definition of a tape reader as someone who identifies the immediate pressure and go with it for the duration that that pressure exists - then moves on.
Buying/selling pressure is created by large size traders through their inefficiency (their size relative to the market's liquidity). BIG traders provide us with edge through their PARTICIPATION and their PAIN. And you can see it on the tape, with training and experience.
The most important information on the tape is the volume transactions going through and if you stare at it for long enough, you'll develop the ability to see real buying and selling pressure... or maybe you won't, that's a talent/skill, nature/nurture debate for another day.
Finally, if you go down this road, you MUST suspend everything you know or think you know about the markets. Leave it at the door, all of it. TA, indicators, charts... the worst thing a trader can do when learning order flow is come in with pre-conceived notions and incompatible frameworks.
Im going to tell you like no one told me, save your self few hundred thousand dollar lesson , don't listen to anyone. you need to discover what you can understand ,what works for you and what you can explain why it was a winner or loser or why you did or did not take the position I was losing money until I found book mark.
MY VAGUE ADVISE WAS AS SUCH ON PURPOSE, THERE IS NO MAGIC BUY INDICATOR THAT WORKS, THERE IS NO PATTER, NO THEORY, NO SET UP , ONLY THE WOLF OF WALL STREET CAN DO THAT BECAUSE ITS AFRUAD
YOU NEED TO FIND WHAT YOU CAN UNDERSTAND AND WHEN YOU MAKE TRADES YOU DONT JUST SAY YOU KNOW WHAT THE ES IS DOWN 2.3 PERCENT ITS NEVER DOWN THAT MUCH IM GOING GONNA GO LONG ON A THURSDAY AT 2:15 PM .. AT 4 P.M. YOU COULD BE WARREN BUFFET OR YOU COULD BE SITTING BEHIND THE BAR AT MARGARITA VILLE WITH YOU LAST 1000 DOLLARS OF MARGIN AND JUST DRINKING THE PAIN AWAY.
YOU WILL FIND THE WAY, NO ONE CAN TELL YOU WHICH WAY IT WILL BE, NO ONE CAN TELL YOU THAT IT WILL WORK, ITS ALL ABOUT THE MARKETS
I SUGGEST YOU REALLY UNDERSTANDN HOW THEY WORK ,
BEUCASE VERY VERY VERY VERY FEW ACUTALLY HAVE ANY CLUE AS TO WHAT IS GOING ON (WHY PRICE MOVES)
ANY ONE ELSE INCLUDING MY SELF KNOWS DICK AND YOU SHOULD NEVER TAKE OUR ADVISE UNLESS IT SI TO FIGURE OUT YOUR OWN ADVISE
HAPPY TRADING
10 years been doing this full on and finally being consistent, IMO volume/deltas/footprints are not worth the hassle. They will distract you from the trades/bias.
Trading is simple. finished liquidity / full auction of price, test/accumulation into discount of that fb/full auction is your entry THEN you simply target liquidity / next market POC.
Whats hard and takes experience IMO is getting the correct perspective of chart view for the market/correct time.
Basically volume/delta do not add anything you don't have via candlesticks.
Pins into a floor for instance - you know they are algos accumulating. Delta being red is absorption, green deltas is demand or flat deltas = withdrawal/exhaustion ... what does it matter?? They are ALL confirmations of BUY! it's still at a floor / discount to buy - if you have weak liquidity ahead to squeeze and its the right time BUY BUY BUY. who cares what delta is doing.
Volume too ... say volume increases into floor that can mean demand/supply/profit take or accumultion?? right? again who cares??? you have a discount and target - GET ON.
Deltas/Volume are overkill and will only serve to distract you. In the heat of battle, you don't have the luxury to sit their analyzing everything. Or maybe you you have an IQ of 165+ (if so, fine use delta otherwise dont)
Your job is to get a discount in line with macro bias and manage the trade. Rinse and repeat. Your job is NOT to be right 100%. Deltas/Volumes do not give you any statistical advantage from what I've seen.
Whatever works for you works.
But for me D/V were distracting me. Like a cancer im happy to have finally cut out.
Better to concentrate on the floor/ceilings, levels, weak liquidity, finished liquidity and be aware of distribution projection targets. Be ahead of the game rather than chasing volume. Instos dont change zones and targets on a whim. Take advantage of being a small retailer and be at the zones (discounts) buying downticks/selling upticks at the correct time.
Just my two cents. Anyone else experience the same?
