Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I hit the wall again and this time I realised I need help indeed :-)
Some background - unfortunately, a bit long - hope someone will manage to read to the end :-)
Currently, I have accounts with both Tradestation and IBKR so, access to both platforms and data. Additionally, I got a subscription to TradingView.
Until recently, I was trying to trade price action somewhat mimicking what I learnt from Brooks's trading course (though I am still to finish it). My success rate was something like 20/80 (obviously, not in my favour). Typically, I am loosing money during electronic hours (cutting it out now), first 15 mins of intraday and when the market is choppy (I am only looking at micro E-minis). I'd say my success rate during trending days is a bit better with some caveats. Obviously, I can not predict whether the day will be trending or choppy.
Recently, I stumbled upon John Grady's interviews and videos where he was strongly advocating against trading price action and promoting order flow trading instead. Now I am a bit cautious converting to new ideas but I decided to try to augment my charts with Level 2 on a side. I tried doing it in TradingView first - really sucked and finally decided that doing it in TradeStation is a reasonable compromise between chart quality and market depth app. And here came that wall: I am really struggling to see any correlation between Level 2 and key price level actions. I even recorded my screen yesterday and watched some key moments and still have now clue what's going on. During 1st 2 market hours when the market was trending up I could only see reasonably consistent order numbers in positions 2-10 away from the current price on both bid and ask (range 50-100 orders each price). There were normally 7-30 orders next to the current price changing erratically. At one stage when one local resistance was hit I could see higher orders popping up on the sell side (100-200 quantity) and no increase on buy side but the price was going up finally taking over those higher order numbers. To my understanding, seeing larger sell offerings and no increase on buy side means that I had to go short but the price action was all contrary to that. Later on I could not see any correlation between Level 2 order quantity and price action. So, my questions are:
- Level 2 quotes provided by TradeStation (10 levels with some aggregation I suppose), are they useful at all? Or unless I invest into a separate data feed I can forget about order flow?
- If they are any useful, what should I be looking at? Should my eyes be more fixated on the numbers next to the current price or more look at the bigger numbers popping up higher up (lower down) the price ladder?
- Is there a better way to learn order flow than the screen time?
- This question is probably more generic and may bring up some controversy: is trading "naked" price action is indeed unsubstantiated? Every video I see of professional trader I see L2 and not necessarily charts - is this indeed the answer to my question? I wonder is there any successful trader on this forum who trades price action only and able to sustain a living out of it?
Thanks to those who managed to read it to this point :-)
Cheers,
V
Can you help answer these questions from other members on NexusFi?
I recommend purchasing Jigsaw Daytradr and opening an account at a broker that supports Rithmic or CQG.
Then practice practice practice on sim. You should go from losing to then breakeven, and eventually to profitable. Orderflow is for scalping.
I can't really address order flow as a method, as I have never used it... there are so many things, and many will work, but it takes the trader to make them work. One method may be good in one person's hands, and the exact same thing may be a failure in another's.
John Grady is sometimes mentioned as a source for information on order flow by people who have used him. You should understand that when someone is championing one method, it is not unusual for them to say the others are "unsubstantiated" -- this is both due to the fact that anyone naturally likes what they use, plus they naturally like something they sell material for.
As to successful traders using one method or another, the fact is that most traders are still in the "development" stage, trying to work out what they can put to good use. There are, however, profitable traders on the forum using a number of methodologies, some essentially just what they have put together from different sources and much experience, which includes experience in trying things out and taking losses and learning from it. As you know, it is not a short process.
Someone who knows more about order flow may be able to give you more pointers about where to look for more about it. The same goes for using TradeStation as an order flow platform. There are enough traders on the forum who are familiar with both, and some others may have other suggestions both for a platform and a method.
I suggest browsing the forum, including using Search, to see if there are posts that address your issues, or threads you would like to participate in to look into further.
Good luck.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Bob, thanks for your reply. Just to confirm my understanding (apart from your advice to search the forum ) - there is no right or wrong way to trade? Does it also mean that there is no particular method that would be a total waste to try? My concern is that I am spending time playing with price action which occasionally gives me hope. But at the same time I am not sure if that hope is not "false positive" and the method that seems the most obvious is not the total waste.
Let me slightly change the way you have put it: there is no one right way to trade. There may, however, be wrong ones.
I might also add, some may be better or worse for you, or for any particular trader, simply because of how it fits you. And on top of that, I would add things that are not exactly part of a "method," but that definitely are part of a trader's execution of that method, including a trader's ability and willingness to manage loss, how well they can keep a steady head in the face of risk, whether they go off the rails emotionally when things go wrong (or for that matter, when things go right -- overconfidence is as bad for profitability as being too fearful), and so on.
I will say that there are traders on the forum who successfully use some of the varieties of price action, including the Brooks version. So I do not think that is a total waste. You should know that there are others who would say the exact opposite, that Brooks is a ripoff, or price action is a ripoff, and for that matter, that "x" is a ripoff, where "x" is simply anything that didn't work for them.
I don't know how many thousands of posts I have read here over the years, and because of that, I do not have such a simple view of what is good and bad anymore. If it were as simple as "just do (or don't do) 'x' ", then the way to vast wealth would be widely known, and everyone would be a billionaire. As of last check, I believe that they aren't. On the other hand, if nothing were any good, then no one would ever make any money trading, which is also not true.
I suggest simply starting somewhere, anywhere, with something. (Well, it should be something that you understand and think has some value too.) Work with it, find out how and whether it fits you and you fit it. Be aware of the non-method issues of trading, including emotional self-control and above all, controlling losses (killing them while they are small is usually a good idea.) After some hands-on, real-world or nearly real-world experience (sim if you have to, small dollar amounts in the micro contracts if you can manage the risks), then assess what you think of it, and whether it is the thing for you.
Or, there is no reason not to go back to the drawing board and look at other things too. But the only way to learn and the only way to improve is by getting into the trenches, as much as you can.
I hope this is not cold comfort, but I also realize it is not just "Do 'x' and everything will be wonderful." But it's what I have for you.
Yes, there is room for hope. And for a whole lot of work, and trial and error, and changing your mind, and getting discouraged, and getting un-discouraged, and pushing ahead. To be honest, the odds are not in anyone's favor of success -- the markets are competitive, and you are in competition with people who have done this trading thing for a long time. So be aware of that also, and then see if you do want to try to make it work.
And again, good luck.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Just to let you know that with Jigsaw the advantage is that it prints the trades hitting the bid or the ask price. It also shows the stacking and pulling of orders.
You do not have these features in the Tradestation DOM Matrix, which is just the limit orders for the bid and ask price. This is a limitation of the TradeStation platform.
So that's the difference. This is vital information to have in order to do order flow trading from the DOM.
Also, the forte of TradeStation is algorithmic trading as strategies are easy to code in Easy Language.
It's your choice on how you want to proceed in your trading journey you can be profitable both ways either price action or order flow or a combination of both.
I used charts for more than a decade and I am familiar with price action trading but now use the DOM mainly to trade the ES and Treasuries.
) - there is no right or wrong way to trade? Does it also mean that there is no particular method that would be a total waste to try? My concern is that I am spending time playing with