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Easy ways to incorporate orderflow


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Easy ways to incorporate orderflow

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  #1 (permalink)
tietzmann
Brasilia
 
 
Posts: 8 since Oct 2020
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I use the volume profile for identifying trading levels and I mainly trade reversals. Right now I use no orderflow at all, I just check for divergence with some other correlated markets and enter a trade on the first reversal bar that I get near or at my trading levels.

I would like to incorporate orderflow to add confirmation to my entries, but in the past I studied orderflow and found it a bit complex and subjective. I am not looking for the holy grail, just want to reduce the amount of stop losses and those trades that people who are watching orderflow would never take, because the flow is completely against my entry.

So I am looking for easy and simple ways to incorporate orderflow to my strategy.
I also don't want to overcomplicate things and end up not taking any trades, because nothing aligns.

Any help is welcome!

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  #2 (permalink)
 loantelligence 
Syracuse, NY
 
Experience: Intermediate
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Trading: NQ
 
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if you are using NT8 and have a lifetime license....it comes with Cumulative Delta....(Order Flow) its pretty easy to use...if not....then look at the GOMI indicator it can do the same...but doesnt have history...just real time....I apply a bollinger to the Order Flow....when I break out...there is my possible entry....I also have added Dynamic SR zones to the price for confirmation....are you using NT....

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  #3 (permalink)
tietzmann
Brasilia
 
 
Posts: 8 since Oct 2020
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loantelligence View Post
if you are using NT8 and have a lifetime license....it comes with Cumulative Delta....(Order Flow) its pretty easy to use...if not....then look at the GOMI indicator it can do the same...but doesnt have history...just real time....I apply a bollinger to the Order Flow....when I break out...there is my possible entry....I also have added Dynamic SR zones to the price for confirmation....are you using NT....

Thanks, I am using Sierra and I have Cumulative Delta. I am going to look into it!

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  #4 (permalink)
opi5981
Beijing,China
 
 
Posts: 4 since Sep 2021
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If your current method is profitable, it is best not to refer to the order flow. Order flow is mainly used for scalping. Large orders in an ultra-short period of time do not necessarily represent changes in direction, but will mislead the judgment of prices. I think VP and TPO are sufficient, and the speed of the market is also an important judgement factor.Regarding Delta, it can only indicate market initiative, but even if the delta is positive, the price can still rise and break new highs. I have participated in a course on order flow in proprietary trading. In the end, I have counted the profitability of the market, and most of them are Breakthrough transactions, they use order flow to pay more attention to the market transaction speed rather than a few large orders that suddenly appear in the market.If the order flow is not used in important price positions, the noise in the market will be amplified in the order flow. When the choppy market appears in the market, it is a day of huge losses.

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  #5 (permalink)
tietzmann
Brasilia
 
 
Posts: 8 since Oct 2020
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opi5981 View Post
If your current method is profitable, it is best not to refer to the order flow. Order flow is mainly used for scalping. Large orders in an ultra-short period of time do not necessarily represent changes in direction, but will mislead the judgment of prices. I think VP and TPO are sufficient, and the speed of the market is also an important judgement factor.Regarding Delta, it can only indicate market initiative, but even if the delta is positive, the price can still rise and break new highs. I have participated in a course on order flow in proprietary trading. In the end, I have counted the profitability of the market, and most of them are Breakthrough transactions, they use order flow to pay more attention to the market transaction speed rather than a few large orders that suddenly appear in the market.If the order flow is not used in important price positions, the noise in the market will be amplified in the order flow. When the choppy market appears in the market, it is a day of huge losses.

Thanks. How do you apply the speed of the market to your trading? And do you gauge it by just looking at the tape?

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  #6 (permalink)
opi5981
Beijing,China
 
 
Posts: 4 since Sep 2021
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tietzmann View Post
Thanks. How do you apply the speed of the market to your trading? And do you gauge it by just looking at the tape?

The speed of order flow is a relative concept. For example, the market is trading in a stressful position. Before that, the average transaction per minute at each price was 50 contracts, but near the stress level, the average transaction per minute The volume has increased to 100 contracts, and the order flow is the speed of observing the microstructure through this method. The faster the transaction between buyers and sellers, the greater the momentum of the market. If the market speed is not very fast (this means that the price changes very fast, such as NQ, DAX), you can observe the cumulative volume of DOM, if the speed is very fast, you need to observe the tape.

Sent using the futures.io mobile app

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  #7 (permalink)
 loantelligence 
Syracuse, NY
 
Experience: Intermediate
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in the example I displayed....the orange bars(and the shading of the chart) were created by the Pace of Tape indicator...it shows greater volume occured at those times....which I use, to know that the transactions/volume/momentum just increased....which is one of my signals to join in....and yes, scalping is my trading method of choice.....have added examples of the first 6 mins today and with a conversion from 5 second screen to 233 tick....it shows the Pace of Tape shading....price is top chart and Order Flow Cumulative Delta is below...


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  #8 (permalink)
 creamyyy 
Brisbane, Australia
 
Experience: Intermediate
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Trading: CL, ES, DAX, Crypto
 
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There are a few ways to incorporate OF into your entries depending on the kind of trader you are and time frame.

If you trade mean reversion, you could consider:
Cumulative Delta - Look for divergences at extremes indicating trapped traders. This doesn't work well at VPOC
Footprint charts - Look for absorption or exhaustion at extremes. (Use VP shapes b or P to help here).

If you're more comfortable trading momentum, then maybe:
Cumulative Delta - Look for price and CD to move the same direction
Footprint charts - Look for stacked imbalances after a break or reversion move. Look for price to pullback to these levels.

This is what I often trade in trending markets


Forgot to add, with OF it's all about the interaction around relative change and cause and effect.
Why was there heaps of selling here, but price hasn't moved down?
Why was it that the last 3 times we hit the extremes of this range, we saw 1000 contracts sold, but this time, there are only 200?

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  #9 (permalink)
tietzmann
Brasilia
 
 
Posts: 8 since Oct 2020
Thanks: 5 given, 0 received


loantelligence View Post
in the example I displayed....the orange bars(and the shading of the chart) were created by the Pace of Tape indicator...it shows greater volume occured at those times....which I use, to know that the transactions/volume/momentum just increased....which is one of my signals to join in....and yes, scalping is my trading method of choice.....have added examples of the first 6 mins today and with a conversion from 5 second screen to 233 tick....it shows the Pace of Tape shading....price is top chart and Order Flow Cumulative Delta is below...

Thanks, I really heard from many traders that it is a better idea to trade when there is actual volume and speed on the market (ie more volatility). I am using Sierra and will look for this Pace of Tape indicator. Looks like a simple and easy addition.

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  #10 (permalink)
tietzmann
Brasilia
 
 
Posts: 8 since Oct 2020
Thanks: 5 given, 0 received



creamyyy View Post
There are a few ways to incorporate OF into your entries depending on the kind of trader you are and time frame.

If you trade mean reversion, you could consider:
Cumulative Delta - Look for divergences at extremes indicating trapped traders. This doesn't work well at VPOC
Footprint charts - Look for absorption or exhaustion at extremes. (Use VP shapes b or P to help here).

If you're more comfortable trading momentum, then maybe:
Cumulative Delta - Look for price and CD to move the same direction
Footprint charts - Look for stacked imbalances after a break or reversion move. Look for price to pullback to these levels.

This is what I often trade in trending markets

Forgot to add, with OF it's all about the interaction around relative change and cause and effect.
Why was there heaps of selling here, but price hasn't moved down?
Why was it that the last 3 times we hit the extremes of this range, we saw 1000 contracts sold, but this time, there are only 200?

Very good, I think this is the best explanation and example of Orderflow anyone ever gave me, thanks! When you say in the image that "buyers run into liquidity" are you seeing that just on footprint or are you seeing the limit orders on the book?

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