So true ziggy.......in particular last week the move from Dow -200 to +700 a case in point and I'm still learning when to just jump on the train and stop picking levels/support or resistance for reversals!! At risk of aging myself still cleaning out the bag of tricks felix the cat left on the side of the road.



But as long as we're talking about imbalances I've posed this in another thread and wonder if anyone has anyone here has comments on the arithmetic between these 2 imbalance calculation methods. The basic diff between mk77ch's FootprintV2 and the NT8's default is whether to use a %age of the total bid/ask trades (footprintV2) or just the ratio bid/ask trades themselves.:



imbalance_NT8vsFootprintV2





Regards

Bruce

But how can those imbalances show in real-time the actual liquidity being put in and pulled at various levels?

It's more a means to figure if there are more buyers or sellers by a certain %age at a particular moment in time and even whether the same are proceeding to successive price levels also eg. "stacked". Think of a tug of war game. Are there some % of players pulling on one or the other side of the rope by some %age. What I'm wondering is which is a better indication of the imminent price direction: a %age of one side greater than the other OR a %age of the higher respective sides per the whole group holding onto both sides of that rope.

Hi Trader709

I think the main point is there are two ways to trade the markets. Predict where price is going or React when price moves somewhere.
After 20 years in this game, I think the best way forward is to react after price has moved so orderflow is the better option.

As an example, if the Nasdaq index spikes up with large volume higher than 500 units in a 5 second block, you have a 90% chance it will move a few more points higher before collapsing because the Asks have been removed from the order book and the imbalance can't be substained unless volume keeps increasing.

My point is price at any point on the chart does not offer the trader the odds of moving up or down 50% of times. On ocassions, there is a 90% chance it can't move one way - therefore orderflow strategy's in my opinion do offer the best chance of profitability.

Cheers