Estratégias de negociação de fluxo de ordens

Estratégia de negociação de fluxo de ordem.

Você ainda está tentando desenvolver uma estratégia de negociação de fluxo de pedidos lucrativa?

No artigo de hoje você vai aprender os passos para o desenvolvimento de uma estratégia de negociação de fluxo de pedidos.

De um modo geral, o desenvolvimento de uma estratégia de negociação de fluxo de pedidos é um processo de três etapas:

Desenvolva uma mentalidade de negociação de fluxo de pedidos Defina suas estratégias principais Observe as ineficiências do mercado e identifique quais se encaixam em suas estratégias.

O sentimento de leitura é uma das habilidades mais importantes que um profissional de fluxo de pedidos precisará. Se você identificar o sentimento corretamente, você terá uma vantagem e sua estratégia de negociação de fluxo de pedidos será robusta devido à maior probabilidade de que o fluxo de pedidos esteja a seu favor.

O exercício de 30 dias descrito no Order Flow Mindset é realmente a maneira mais eficiente de dominá-lo. Em seguida, concentre-se em um ou dois provedores de notícias que realmente cubram todas as informações que você precisa e aproveite isso.

Nosso feed de notícias (a plataforma de pesquisa de dados e notícias de fluxo de pedidos) será de grande ajuda nesta tarefa, pois o atualizará sobre as últimas notícias, fluxos de mercado e relatórios de análise econômica aprofundados que você precisa para fazer uma avaliação precisa de sentimento, mas você pode usar qualquer serviço que você preferir.

Apenas certifique-se que você não sofre de sobrecarga de informação!

Quando você usa um feed ou um site com freqüência, você rapidamente descobre quais categorias / jornalistas deseja seguir. Concentre-se nas informações que considera úteis para determinar o sentimento e não tente ler todas as notícias por aí. Quando você tem uma idéia do que é o viés no mercado, confira a ação do preço em vários mercados. Se o viés geral for negativo por causa de, digamos, dados econômicos ruins e crescimento chinês fraco, mas de alguma forma o Aussie está subindo sem qualquer lançamento de notícias significativo da Austrália, seja cético em relação a esse movimento. Pode oferecer-lhe uma oportunidade comercial.

Quais são as principais questões para determinar o sentimento?

Quais são os principais temas macro atuais no mercado? Quais são os fatores que impulsionam o sentimento positivo / negativo atual? Como o comportamento de preços está se comportando em comparação com minha análise de sentimento?

Eu preencho um jornal todos os dias que é dividido em quatro categorias: Ásia, Londres, NY e Resumo. Eu descrevo antes de cada sessão futura o sentimento do anterior com uma perspectiva para a próxima sessão. No final do dia (22:00, Londres ou 17:00 NY), faço um resumo do evento do dia e comparo com as perspectivas que escrevi durante o dia. Observo as razões pelas quais eu estava errado (mudanças nos temas macro ou ruído de curto prazo?). Estou muito interessado em economia, mas, para ser sincero, não o incorporo muito na minha negociação. É tudo ganância e medo dirigindo mercados ou melhor expressa - é tudo EMOÇÕES. Mantenha a análise de sentimentos simples.

Meu ponto aqui é que você deve sempre estar ciente dos principais temas macro que direcionam os mercados e não se concentrar muito em eventos intradiários; que terá apenas consequências de curta duração. Sentimento será realmente misturado na maioria das vezes.

Resumindo, concentre-se nos temas macro globais e, quando as coisas se alinharem, você poderá dizer que o sentimento é claro e vai buscar oportunidades de negociação. Geralmente, quando você não precisa complicar demais suas estratégias principais de fluxo de pedidos, deve encontrar muitas oportunidades para operar nesses ambientes.

Além disso, esteja ciente do intramarket (por exemplo, relacionamento entre ativos, como EUR / USD e GBP / USD, por exemplo) e intermarket (por exemplo, EUR / USD e SPX500 ou AUD / USD e GOLD). O modelo simplista de Risk-On / Risk-Off está basicamente desaparecido e não é mais tão fácil assim como “USD, JPY, CHF up = todas as outras moedas de risco para baixo”. Fique atento às correlações em constante mudança, pois o ambiente ZIRP e a estrutura em mutação da política do banco central estão misturando as coisas. Aqui está uma ferramenta que ajuda você a acompanhar as correlações para os pares FX: oanda / forex-trading / analysis / currency-correlation.

As rachaduras nas correlações podem ser de médio prazo, impulsionadas por fundamentos (no final, é tudo sobre expectativas de taxa de juros) ou de curto prazo, causadas por atividades de certos participantes do mercado. EUR / USD e GBP / USD têm uma correlação bastante forte na maior parte do tempo. Se considerarmos que o EUR / USD é negociado mais alto indo para a sessão de negociações de Londres, enquanto o GBP / USD cai, os gatilhos vendem paradas e põem uma baixa mais baixa, o que isso significa? Havia poder de compra no E / U mais forte do que vender um. G / U, por outro lado, não conseguiu atrair a demanda e os participantes foram para caçar as paradas de venda. Se a G / U se recuperar perto do nível de stop loss e rebotes, é um sinal de que um grande dinheiro não estava disposto a comprar a libra no nível anterior a Londres e empurraram o preço para baixo nas paradas para acumular sua posição. Tais rachaduras de correlação são mais importantes em zonas-chave de oferta / demanda e quanto mais durar, maior o impacto, é claro. Não perca seu tempo com rachaduras de curto prazo na correlação; eles podem ocorrer às vezes apenas aleatoriamente, isto é, sem uma clara iniciativa por trás.

Agora, com o sentimento coberto, vamos passar a definir estratégias centrais.

A Darkstar publicou recentemente um artigo onde sugeriu que ele está administrando um portfólio e usando uma estratégia de caça à parada para negociar futuros para cobrir o lado negativo. Eu tive que sorrir no final do artigo, porque eu imaginei o quão sem noção eu estaria lendo no início da minha viagem de Order Flow Trading. Minhas expectativas naquela época seriam algo assim: "Ele tem um sistema ultra-complicado contendo pelo menos dez estratégias aproveitando várias ineficiências de mercado" secretas "e levaria uma eternidade para ele explicá-lo a alguém novo no OF trading".

Mas esse não é o caso. Como muitos comerciantes bem sucedidos, ele tem tudo a ver com algumas estratégias básicas que são simples, para que ele possa ajustar-se facilmente a várias ineficiências e condições do mercado que se adequam a elas. Depois de algum tempo buscando a próxima melhor estratégia, posso apreciar totalmente a sugestão no último capítulo do Order Flow Mindset, descrevendo algumas estratégias de fluxo de ordens principais. Ele manteve simples e fácil de entender e isso é muito mais útil do que se ele tivesse oferecido uma descrição complicada. Use as informações gerais do livro para desenvolver um sistema que é simples em seu núcleo, mas tem uma vantagem clara!

Quando você tem uma ideia do que quer usar como estratégia central, pergunte-se:

Qual é a ideia por trás da estratégia? Quais são os pontos fortes e fracos da estratégia? Quais fatores estão dando uma vantagem à minha estratégia?

Eu mesmo estou usando a estratégia de parada, então responderei as perguntas da maneira que percebi:

Qual é a ideia por trás da estratégia?

Os grandes comerciantes não podem simplesmente acumular ou distribuir posições sempre que desejarem, porque sofreriam de escorregões. O escorregamento pode ter um grande impacto no seu P / L se você for um dos grandes players do mercado. Os níveis de preços com uma concentração de ordens de stop loss são um alvo atraente para ambos os participantes acumularem e distribuírem suas posições, uma vez que proporcionam liquidez a eles. As paradas são ordens híbridas, ambas exigentes e fornecendo luidez.

Quais são os pontos fortes e fracos da estratégia?

Pontos fortes: Iniciativa de grandes comerciantes por trás dele, o sentimento claro nos dá o apoio de outros participantes, objetivo de lucro claro.

Pontos Fracos: O ponto de entrada pode ser um pouco difícil de determinar, outra razão pela qual devemos nos concentrar no sentimento forte, para que possamos ter o apoio do “fluxo”.

Quais fatores estão dando uma vantagem à minha estratégia?

Eu só negocio quando o sentimento é claro. Eu olho para o mercado para acionar comprar paradas durante o sentimento positivo e quando o sentimento é negativo, eu viso vender paradas. Se o sentimento for positivo e a ação do preço começar a se mover de acordo, os outros participantes começarão a participar do movimento. Assim, você pode ter tanto o suporte de grandes traders, que estão visando paradas para maior liquidez, quanto outros participantes que estão acumulando. Os posteriores não estão realmente direcionando paradas, mas ajudam na compra deles.

Ferramentas Adicionais.

Lá nós temos algo com que já podemos trabalhar. Vamos expandi-lo descrevendo alguns eventos de mercado que podem nos ajudar.

Como já foi mencionado muitas vezes, os mercados são todos sobre a ganância do medo. Mesmo os profissionais com um longo histórico de sucesso, às vezes, encontram-se em um desses estados. Não é para nós seres humanos sermos como robôs, nem mesmo no comércio. Em combinação com a análise de sentimentos, tente incorporar alguma psicologia. Quanto àqueles sem posição ainda, é tudo sobre percepção. Onde a demanda e a oferta chave serão localizadas? E então aqueles com posição, qual é o alvo deles? Eles têm sentimento a seu favor? Qual lado do mercado é o mais fraco? Onde estão as paradas do lado mais fraco? Algumas perguntas que você pode fazer e anotar em seu diário. Embora essas perguntas não sejam fáceis de responder às vezes, trata-se de mantê-las simples observando e tomando notas. Sua mente subconsciente é capaz de coisas incríveis e você não tem nada a perder tentando.

AUD / USD empurrou mais alto, acionando paradas acima de 1.0530. Dados melhores do que os esperados da China impulsionaram a demanda pelo dólar australiano, especialmente nos cruzamentos. A faixa anteriormente apertada, que durou algum tempo, poderia ser uma indicação do acúmulo de posições, tanto de longs quanto de shorts. Os touros têm atualmente a vantagem, enquanto o objetivo pára acima de 1,06. O evento de notícias deixou uma lacuna de flexibilidade no par, o que provavelmente será um teste da força dos touros. Se o interesse do lance na lacuna for forte o suficiente, eles terão o poder de empurrar para paradas acima do próximo grande figo.

Não há necessidade de complicar demais. Basta combinar sua análise de opinião e ordem técnica e anote seus pensamentos sobre quem provavelmente tem a vantagem e quais poderiam ser seus objetivos. Aperta pode levar a uma ação de preço poderoso. Trata-se de identificar o lado mais fraco do mercado e direcionar suas paradas para serem acionadas no squeeze, levando a um impulso adicional contra os traders presos. Quando o preço está caindo muito, não se trata apenas de vender pressão; é também falta de compradores.

Squeezes são causados ​​por fluxos naturais nos mercados, como no exemplo acima. Os compradores correram para a saída, os vendedores ganharam a vantagem e o sentimento tornou-se negativo. O outro tipo de squeeze é o alvo, causado por participantes que procuram acumular posições. A parada de caça pode correr contra o sentimento e sua única finalidade é o acúmulo de posição. Vamos assumir um sentimento positivo para o EUR / JPY, com o par sendo negociado no meio de um intervalo recente após um grande movimento. Dinheiro inteligente vai olhar para acumular no nível mais baixo, o que irá criar a zona de demanda. Isso causará um pequeno aperto visando o lado do mercado que está negociando com o sentimento. Dinheiro inteligente direcionado para vender paradas dos longos para acumular a melhores preços e preço subiu rapidamente depois disso. Esta é uma oportunidade para diminuir a parada e executar uma posição com o dinheiro inteligente, sentimento e tendência predominantes. Se você vir um sentimento claro, mas a ação do preço for uma contrariedade, pense nisso.

Sua melhor aposta é focar em zonas chave de oferta / demanda em períodos de tempo mais altos, que provavelmente atrairão o fluxo necessário para inflamar o momento.

Se você estiver monitorando os níveis previstos de oferta / demanda, espere o preço chegar na primeira vez e veja qual é a reação. Idealmente, o preço é claramente rejeitado. Eu gosto de esperar por um retrocesso perto do nível e entrar lá. Eu posso perder uma jogada se ela for rejeitada rapidamente sem qualquer chance de entrar em uma retração, mas isso é melhor do que atuar em um nível de oferta / demanda não confirmado e ver sua parada sendo comida em poucos minutos.

Se você está no início de sua jornada de desenvolvimento da estratégia de Fluxo de Ordens e procura por mais informações, eu recomendo o guia de negociação de fluxo de pedidos de 22 páginas:

Dito isto, quero mais uma vez mencionar que há três etapas para desenvolver um sistema de fluxo de pedidos:

Desenvolver uma mentalidade de comerciante de fluxo de ordem.

Defina suas estratégias principais.

Observe as ineficiências do mercado e identifique quais se encaixam nas suas estratégias.

Seu sistema não deve ser complicado. No começo, encontre uma estratégia central com a qual você esteja se saindo bem, se sinta confortável e adequado para você.

Mantenha um diário e observe padrões de mercado e com o tempo você será capaz de adaptar a estratégia ao seu estilo de negociação. À medida que você ganha experiência, pode usar várias ineficiências do mercado e adicioná-las à estratégia.

Quando estiver completamente confiante em seu sistema e souber o que está fazendo, sua experiência ao vivo nos mercados o ajudará a moldar a estratégia ainda mais.

5 estratégias de negociação de fluxo de ordem você deve tentar hoje.

5 estratégias de negociação de fluxo de ordem você deve tentar hoje.

Os novos operadores geralmente ouvem falar em Bancos & amp; instituições nos mercados, ativas em certos níveis, e de fato muitas vezes verão os enormes movimentos criados por sua atividade, mas infelizmente infelizmente não são capazes de avaliar onde esses jogadores estão entrando no mercado, e ainda menos capazes de avaliar como se beneficiar dessas constantes fluxos de luidez.

Nós da Littlefish desenvolvemos um indicador que rastreia o fluxo e o volume de Banks & amp; instituições nos mercados e gera sinais oferecendo a oportunidade de se alinhar com esses fluxos direcionais. Tal como acontece com todos os grandes indicadores, o indicador é mais rentável quando utilizado como parte de uma estratégia de negociação sólida que procura identificar potenciais entradas de mercado e, em seguida, usa o Order Flow Trader como uma poderosa ferramenta de confirmação.

Continue lendo enquanto descemos as cinco estratégias de negociação de fluxo de pedidos que você precisa para experimentar agora mesmo!

Fluxo 1.Order Com COT.

Fazendo o máximo de informações disponíveis no mercado, esta estratégia é uma forma incrivelmente poderosa de negociar em linha com os grandes peixes no mercado Forex. Nosso indicador COT puxa automaticamente os dados do relatório COT semanal para exibir o posicionamento dos principais participantes do mercado diretamente em seus gráficos, dando-lhe o viés direcional mais amplo de bancos e instituições. O operador do Order Flow, em seguida, rastreia o fluxo e o volume de sua atividade para fornecer entradas específicas alinhadas com seu viés direcional.

Ganhou mais de 39.000 pips de lucro em 2014 Trades em linha com os bancos & amp; Principais instituições Sinais claros e fáceis de ler Leva apenas um pequeno tempo para checar os sinais.

Além disso, tenha acesso total aos nossos indicadores FX por 14 dias por apenas £ 10 & # 8211; Clique aqui para baixar agora!

Fluxo de Pedidos 2.Multi-Timeframe.

Uma estratégia de negociação de swing incrivelmente poderosa que procura negociar em linha com Banks & amp; grandes instituições em uma escala muito mais ampla, usando sinais OFT de prazo mais altos para sinalizar uma direção de comércio e sinais conflitantes de tempo menor para confirmar e executar o comércio com um risco reduzido e, potencialmente, entrar em movimentos muito maiores.

Só precisa de um indicador em seus gráficos Gera lucros realmente altos através de múltiplas posições confluentes Negociações em linha com Bancos & amp; grandes instituições numa base de longo prazo Trava tendências fantásticas.

Além disso, tenha acesso total aos nossos indicadores FX por 14 dias por apenas £ 10 & # 8211; Clique aqui para baixar agora!

3.Triple Threat Trading (Fluxo de Ordens com COT e Pin Bar)

Um pouco de ajuste no nosso fluxo de pedidos & amp; COT estratégia, desta vez trazemos o clássico candelabro Pin Bar, que é um favorito LFX, para atuar como confirmação adicional em nossa entrada de comércio. Voltada para o trader mais conservador, essa estratégia de três níveis ajuda a identificar entradas importantes para amplas movimentações de mercado com a segurança de uma abordagem de vários filtros.

Freqüência de negociação muito mais conservadora e mais baixa Obtém a entrada em grandes movimentos do mercado a partir de sinais realmente precisos Utiliza informações de mercado e ações de preço para gerar entradas comerciais lucrativas Pode usar nosso Indicador Pin Bar para destacar automaticamente Pin Bars e personalizar seus parâmetros.

Além disso, tenha acesso total aos nossos indicadores FX por 14 dias por apenas £ 10 & # 8211; Clique aqui para baixar agora!

Fluxo 4.Order com RSI.

Combinando o melhor do antigo e do novo, esta poderosa estratégia de negociação do swing é incrivelmente simples e fácil de seguir e usa a divergência do RSI juntamente com a confirmação do Multi-Timeframe OFT para destacar os negócios fantásticos. Comerciantes de prazos mais altos vão adorar a simplicidade e eficácia deste método.

Melhora totalmente a eficácia da divergência de RSI Funciona off Daily & amp; Horários H4 e bastante tempo para monitorar as configurações. Pode ser usado em prazos mais baixos também. Dá entradas realmente apertadas em grandes pontos de reversão Estratégia realmente simples com processo fácil de aprender.

Além disso, tenha acesso total aos nossos indicadores FX por 14 dias por apenas £ 10 & # 8211; Clique aqui para baixar agora!

Fluxo 5.Order Com Padrões Gráficos.

Uma estratégia extremamente eficaz que ensina o trader a ler a estrutura do mercado e a usar o OFT para confirmar movimentos de acordo com os padrões históricos do mercado, criando oportunidades comerciais poderosas com simplicidade e facilidade.

Método simples e confiável Funciona em todos os prazos Só precisa de análise básica + OFT OFT é uma ótima ferramenta para filtrar falsos rompimentos e movimentos falsos, que são problemas tradicionais com operações padronizadas.

Então você tem isso. Cinco das nossas melhores estratégias de negociação de Order Flow para você aprender e começar a usar. Certifique-se de verificar o nosso Curso de Negociação Forex que contém capítulos completos sobre a negociação de Fluxo de Encomenda, bem como estratégias de negociação detalhadas e planos de negociação completos com material de vídeo.

O guia final para ordem de negociação de fluxo.

Este guia aqui é sobre Order Flow Trading e lembre-se, eu acho que este é o melhor guia para negociação de fluxo de ordem forex você nunca vai ler.

Ele realmente tem algumas informações sólidas sobre o fluxo de pedidos, incluindo:

como ler os fluxos de pedidos fluxo de pedidos estratégias e técnicas de negociação como analisar o sentimento do mercado e combinar isso com fluxo de pedidos negociando como usar a ação do preço com o fluxo de pedidos negociando como entender a microestrutura do mercado e usar isso com fluxo de ordens e muitas outras também.

Eu tenho procurado sobre o fluxo de ordem de negociação no mercado forex, porque é um assunto que costumava despertar a minha curiosidade e parece haver muito pouca informação sobre como realmente aplicar o conhecimento de fluxo de ordem em situação real de negociação ao vivo.

Felizmente me deparei com um trabalho de um comerciante chamado Dali, que iniciou um Thread de negociação de fluxo de pedidos em babypips.

O segmento de negociação de fluxo de pedidos em si tem cerca de 40 páginas, então passei por todo o segmento e extraí todas as informações necessárias que Dali escreveu e o que eu fiz aqui foi simplesmente reescrito (para explicar os conceitos, pouco mais), reorganize-os, coloque títulos, legendas etc. para facilitar a digestão & # 8221; em um lugar sem passar por 40 páginas de thread (conteúdo) e lendo todas as outras coisas desnecessárias nesse segmento também.

Então, o que você vai ler não é o meu trabalho, é o seu Dali.

(Obrigado Dali pela grande informação de troca de fluxo de ordens & # 8230; se você acontecer de visitar forextradingstrategies4u)

Alguns trechos de conteúdo podem estar faltando ou não parecem estar conectados neste guia de negociação de fluxo de pedido - Estou apenas avisando, você pode encontrar alguns.

Índice.

O que é ordem baixa negociação e o que não é.

A definição de negociação de fluxo de pedidos tende a causar muita confusão. Aqui estão 3 definições possíveis do que é o comércio de fluxo de pedidos:

Algumas pessoas pensam que quando você negocia diretamente do fluxo de informações fornecido pelos bancos, isso é considerado negociação de fluxo de pedidos. Para ser sincero, essas informações só estariam disponíveis para um número muito pequeno de pessoas e elas não estariam compartilhando isso na internet ou com você. Outras pessoas pensam que a negociação de fluxo de pedidos é a leitura de fita. E há outros traders que também pensam que a negociação de fluxo de pedidos é uma forma ou negociação de ação de preço.

Então, qual destas definições é correta para a negociação de fluxo de pedidos?

Você vê, não há uma definição clara - todos esses métodos mencionados são baseados na antecipação de fluxos futuros de pedidos nos mercados.

A negociação de fluxo de ordem é uma mentalidade.

A maneira que eu vejo é que a negociação de fluxo de ordem é uma mentalidade.

O que isto significa?

Bem, em vez de apenas procurar padrões técnicos, um comerciante deve dar um passo adiante e pensar sobre o que outros participantes do mercado podem fazer.

Pense sobre o que outros participantes do mercado podem fazer.

Este é um conceito muito importante para o fluxo de negociação - pensando sobre o que os participantes do mercado poderiam fazer.

E quando você pensa nessa linha, pode antecipar que tipo de ações elas tomarão no mercado.

Você vê as forças do medo e da ganância no mercado todos os dias.

Se você é um novo trader e você é um trader de análise técnica de 100%, isso pode ser uma grande mudança, porque você teria confiado tanto na análise técnica.

Mas, como qualquer outra coisa na vida, uma vez que você continue a estudá-lo, aprenda e, com o tempo, ele se torne mais fácil e você poderá começar a ver o mercado forex com um olhar completamente diferente e você começará a:

esteja ciente de como o preço está se movendo de que maneira ele se move (não é tão bom quanto informações de fluxo bancário, mas a ação de preço dá algumas boas percepções) seu conhecimento sobre outros participantes ajuda a evitar erros comuns e, finalmente, seu conhecimento sobre ineficiências de mercado ajudará você Combine tudo isso e explore essas oportunidades no comércio ao vivo.

Os comerciantes podem argumentar muito sobre o prazo de negociação do fluxo de pedidos, mas para mim:

A negociação de fluxo de pedidos é simplesmente um modo de coisa. A negociação de fluxo de pedidos é uma abordagem diferente para negociar os mercados do que os comuns e não é limitada a um método específico.

Você vê, eu não tenho nenhuma informação de fluxo de banco privado, nem tenho nenhuma informação privilegiada, mas aqui está a coisa - meu conhecimento sobre micro-estrutura de mercado e eu não tenho nenhuma informação de fluxo de banco privado, mas ainda assim, meu conhecimento sobre:

microestrutura de mercado e outros participantes do mercado.

estão me dando uma vantagem para negociar os mercados.

Quais são os passos para aprender a negociação de fluxo de ordem?

Existem 3 etapas básicas para aprender sobre o fluxo de pedidos e aqui estão elas:

Passo 1: Aprenda sobre a microestrutura de mercado (como mudança de preço, tipo de ordens, luidez etc.)

Passo 2: Aprenda sobre os outros participantes do mercado (comerciais, bancos / revendedores, dinheiro real, soberanos, grandes especuladores)

Etapa 3: explore as ineficiências do mercado.

Tipos de pedidos e como o preço muda.

Neste artigo, vou abordar:

os três tipos principais de pedidos usados ​​na negociação e como o preço muda.

Vamos dar uma olhada no que realmente acontece e qual é o preço em movimento.

Para entender a negociação de fluxo de pedidos, você também precisa saber sobre esse termo chamado luidez.

Então, qual é a definição de luidez? Bem, deixe-me dar um exemplo:

Se você quiser comprar um ativo (você é o comprador), também deve haver vendedor que esteja disposto a vender esse ativo para você também.

Agora, se você é o vendedor, também precisa de um comprador que queira comprar o que quer que esteja querendo vender.

Desde que a transação possa ser feita tanto pelo comprador quanto pelo vendedor, você pode dizer que há liquidez disponível tanto para o comprador quanto para o vendedor para realizar a transação.

Agora, essa é a explicação mais simples da flexibilidade que você terá.

Então, na negociação, como é a luidez criada?

Como a Luidez é Criada no Mercado.

A luidez é criada quando os negociadores fazem pedidos no mercado e esses pedidos são chamados de oferta e oferta.

Estas são as definições de uma ordem de oferta e oferta:

Um lance é uma ordem limite para comprar um ativo a um preço específico (melhor que a taxa de mercado atual) Uma oferta é uma ordem limite para vender um ativo no preço determinado (melhor que a taxa atual de mercado).

Licitações e ofertas criam liquidez em um mercado, elas fornecem aos participantes que negociam através de ordens de mercado.

Se você é um grande negociador, a luidez é um fator muito importante. Os grandes comerciantes não podem simplesmente pensar em quanto preço irá se mover, mas também em como sairão de suas negociações quando chegar a hora.

Bem, se você é um grande comerciante e você não quer fechar suas posições de negociação grandes, mas se não há luidez, você está realmente encalhado.

Isso não é um problema para nós, comerciante de varejo, mas definitivamente um fator chave para aqueles que negociam grandes quantidades de dinheiro é um grande problema.

Quanto mais líquido for um mercado, mais atrairá outros comerciantes.

Tipos de pedidos.

Ordens de mercado.

As ordens de mercado consomem a liquidez fornecida por ordens limitadas.

São ordens emitidas para comprar / vender um ativo específico ao preço de mercado atual.

Um pedido de compra de mercado será preenchido com base na melhor oferta e um pedido de venda no mercado será preenchido em comparação com o melhor lance disponível.

As ordens do mercado tiram a liquidez do mercado, pois o participante que as emite quer negociar imediatamente e consome liquidez disponível por meio de ordens com limite.

Ordens Limitadas.

As ordens limitadas fornecem liquidez porque dão a outros negociantes a opção de negociar com eles.

Se eu emitir uma oferta de 1 milhão (ordem de limite de compra) em 1.31000 para EUR / USD, ofereço luidez a outros participantes que desejam vender no mercado a esse preço.

Eles são chamados de ordens limitadas porque não podem ser preenchidas a um preço pior do que o especificado.

Isso significa que meu lance de 1,31000 pode ser preenchido AT ou ABAIXO (slippage positivo) da taxa, mas não acima disso.

Pedidos de livros ou DOMs (Profundidade do Mercado) são usados ​​principalmente na negociação de Futuros, já que o mercado de FX não possui dados de volume agregados. Exemplo:

Neste ativo, não temos pedidos em 44 e 45, o que significa que você pode comprar atualmente a 46 (a melhor oferta disponível) e vender a 43 (a melhor oferta disponível).

Se eu decidir que 45 é um bom preço para vender e emitir uma oferta a essa taxa, o spread diminuirá e os compradores poderão comprar de mim a 45 o valor que ofereço para vender.

Digamos que há um comprador impaciente que move seus lances para 44.

Ele novamente reduzirá o spread e agora os vendedores poderão vender a um preço melhor do que antes. A carteira de encomendas parece agora assim:

Como o preço muda.

Cenário 1: O Trader „A“ compra 20 contratos do ativo no mercado.

A carteira de encomendas acima mostra a validade disponível e é visível que ele não será preenchido aos 45 anos, pois a luidez é insuficiente.

Ele será preenchido da seguinte forma: 10 a 45, 8 a 46 e 2 a 47.

Como ele consumiu TODA a luidez em 45 e 46, a carteira de encomendas será agora assim:

A carteira de encomendas continuará assim até que haja novos lances criados abaixo de 47 OU haja ainda mais compras pelo preço de mercado (com a melhor oferta), o que leva o preço a um preço mais alto e consome mais ofertas.

Os DOMs não são usados ​​em FX (ou, pelo menos, não devem ser usados, pois não há dados de volume agregados para FX), mas o mecanismo de alteração de preço é o mesmo em todos os mercados.

Ordens de limite estão fornecendo luidez, enquanto ordens de mercado estão consumindo-as.

Parar ordens.

Ordens de parada são ordens para comprar acima do preço de mercado atual / vender abaixo do preço de mercado atual.

O termo "ordem de parada" é usado porque a ordem é "interrompida" de ser executada até atingir o preço determinado.

Está sendo interrompido porque, caso contrário, se você criar um lance no preço em que as ofertas já existem ou acima, ele se tornaria uma ordem comercializável e seria executado imediatamente.

Na maior parte do tempo, uma ordem de compra será executada quando o preço atingir o "preço de oferta" do mercado e uma ordem de venda será acionada quando o preço atingir o preço de "oferta" do mercado.

Eles serão convertidos em ordens de mercado e consumirão a liquidez.

Mas há algo de errado em parar ordens.

Eles também podem fornecer luidez.

Digamos que eu seja um grande trader procurando vender um ativo (por favor, esqueça a lista de pedidos acima para este exemplo). O preço de mercado é atualmente 44/46 (eu posso comprar às 46 e vender às 44).

Não quero vender às 44 porque a liquidez não é boa o suficiente para a quantidade de contratos que pretendo vender.

Estou ciente de que há muitas paradas de compra acima do preço de 50 dos participantes que já são curtos.

Outros participantes também estão cientes disso e o preço será atraído para esses níveis.

Por isso, vou definir minhas ofertas acima de 50 (digamos 51 e 52) e obter vantagem das paradas.

As chances são boas, não há muitos compradores nesses níveis, já que o preço será percebido como alto e a liquidez é um pouco baixa.

Mas há compradores forçados acima de 50 anos e eles terão que tomar minha luidez.

Meus shorts serão preenchidos e o preço provavelmente se moverá rapidamente a meu favor, já que a maioria das compras veio de shorts que foram parados.

O preço não é atraente para os compradores e provavelmente cairá rapidamente.

Parar de caçar é uma atividade comum em todos os mercados, não apenas no mercado de câmbio.

Os comerciantes de varejo estão cientes disso, mas principalmente do jeito errado.

Não estou falando sobre o alargamento do seu corretor de varejo para fazer algumas paradas, mas pare de caçar em uma escala maior.

Os grandes comerciantes precisam dele por acaso como descrito acima e os bancos também o usarão para controlar melhor o seu livro.

Mas vamos deixar isso para depois ...

Informações adicionais sobre ordens de parada.

As paradas não estão tecnicamente fornecendo luidez, mas de maneira indireta.

Vamos novamente usar o exemplo acima mencionado. Eu estou olhando para vender um ativo que está atualmente em 44/46 (eu posso vender a 44 e comprar a 46).

Eu não acho isso uma boa taxa para vender, então vou emitir uma ordem de limite.

Eu sei que há paradas acima de 50 e essas provavelmente vão chamar a atenção dos comerciantes predatórios, o que empurrará o preço na direção das paradas.

Eu, portanto, emito duas ordens de limite de venda em 51 e 52.

Vamos supor que o sentimento para o recurso é bastante misturado e não há muitos touros.

Com isso, é provável que não haja compradores a 51 e 52 e o preço não atinja esses níveis.

Mas com as paradas de compra acima de 50, forçamos os compradores.

Esses traders determinaram que querem sair de suas posições vendidas nessas taxas e sua demanda acelerará o movimento e acionará minhas ofertas.

Eu forneci luidity para eles, mas eu explorei o lado mais fraco do mercado e entrei em uma posição em uma taxa melhor. Sem os compradores forçados, eles provavelmente não seriam "feridos".

Quanto à sua segunda pergunta: você não precisa do DOM para prever o fluxo de pedidos.

Mesmo que você tenha o DOM para futuros, ele mostra apenas pedidos para os cinco níveis de preços mais altos e mais baixos, e com esses mercados sendo tão nítidos e de rápida mudança, você não poderá extrair nenhuma informação útil dele .

Eu usei o DOM acima para explicar visualmente o processo de mudança de preço.

Abordarei o tópico de projetar o fluxo futuro também em um momento posterior.

Existem duas maneiras pelas quais as paradas podem me ajudar:

1) a presença das ordens stop loss acima irá atrair a atenção dos chamados stop hunters.

Pode ser especuladores, modelos de fundos (algos) comprando em momentum de curto prazo ou revendedores que fazem isso para gerenciar seus livros.

Eu cobrirei esta atividade em um artigo posterior, mas a chave é que um maior cluster de ordens de stop loss terá a atenção de outros comerciantes, especialmente quando eles estão próximos.

2) a compra de stop loss que acontecerá acima de 50, acelerará o momentum superior por um curto período e fará com que minhas ofertas sejam acionadas.

No entanto, como eram compradores forçados e há poucos compradores reais, # 8221; aqui em cima, o preço cairá rapidamente.

Eu posso explicar isso melhor em um exemplo real do mercado:

O viés da GBP é claramente negativo e vimos uma queda acentuada para 150,80 na abertura de domingo.

Como o preço declinou, houve comerciantes que reduziram suas paradas para proteger seus ganhos e, em geral, mais paradas foram construídas acima.

É uma prática comum dos comerciantes de varejo (mas não apenas eles) colocar suas paradas um pouco acima do grande número (grande número = a cada 100 níveis de preços), ou seja, 1.50, 1.51, 1.52) quando eles são curtos.

À medida que o GBP / USD se recuperava, as primeiras paradas acima de 1.5150 chamaram a atenção dos stop hunters e, depois, daqueles acima de 1.52.

Dê uma olhada no gráfico abaixo e você verá o que eu descrevi acontecer duas vezes!

As primeiras paradas acima de 1.5150 foram retiradas e o par negociado até 1.5160. No entanto, o impulso desapareceu e o preço caiu rapidamente abaixo.

O nível de suporte de 1.5090 mantido e o preço marcado para 1.52, paradas acima, estavam em foco. Você vê o que aconteceu?

Paradas acima de 1,52 foram acionadas, ofertas foram preenchidas, pequenos compradores saíram depois que os forçados foram feitos e o preço caiu!

Pare de caçar.

Comerciantes de varejo são geralmente conscientes de parar de caçar, mas tem uma idéia errada do que realmente é.

Não é o seu corretor de varejo escorregando por alguns pips para conseguir sua parada.

Esses corretores não têm o tamanho para movimentar o mercado de tal maneira!

Como abordei anteriormente, grandes traders não podem simplesmente acumular ou distribuir uma grande posição sempre que desejarem.

Eles têm que procurar a luidez e as paradas estão ajudando-os de maneira indireta, como expliquei no exemplo acima.

É por isso que as buscas de parada tendem a se desvanecer rapidamente: os grandes lances ou ofertas foram preenchidos e com as paradas acionadas, não há compradores deixados em um cenário de parada de compra e nenhum vendedor em um cenário de venda de parada.

Essas ofertas e ofertas tendem a estabilizar o mercado.

Se houvesse poucos deles disponíveis quando as paradas fossem acionadas, isso resultaria em um evento chamado de parada em cascata & # 8211; não há luidez suficiente para as ordens de stop loss e o preço é empurrado para a próxima área de grandes paradas até que ofertas / ofertas em bom tamanho apareçam.

Há também os traders que antecipam tais movimentos e procuram obter lucro perto do nível onde as paradas são rumores de serem.

Esses são, na maioria, especuladores de curto prazo e modelos de fundos (que compram / vendem no momento).

Eles vão aproveitar os compradores / vendedores forçados e fechar sua posição como preços atingidos nas paradas.

Vamos abordar o tópico de como identificar níveis de ordens de stop loss concentrados mais tarde.

Os concessionários também participam dessa atividade.

Embora esteja procurando obter algum lucro com o comércio de curto prazo, sua tarefa principal é fornecer aos clientes uma avaliação de qualidade e colocá-los com o menor escorregão possível.

Vamos passar por um cenário:

EUR / USD está sendo negociado a 1.3050 e Dealer & # 8220; A & # 8221; vê muitos de seus clientes comprando ordens de stop de 1.3100 até 1.3110. Isso significa que esses clientes querem sair de sua posição quando o preço quebra acima da taxa determinada.

Se ele não fizer nada e esperar o preço quebrar acima de 1,31, ele terá problemas para preencher seus clientes sem deslizes. Haverá paradas de outros participantes do mercado acima de 1,31 e outros revendedores estarão agindo de forma semelhante, empurrando o preço mais rápido.

Ele encheria seus clientes com uma taxa ruim, não ganharia nada com isso e sua reputação seria seriamente atingida se isso acontecesse várias vezes.

Então, o que ele pode fazer?

Ele pode gradualmente começar a acumular uma posição longa e antecipar uma quebra de 1,31 nas paradas.

Concessionários tendem a ter uma ótima sensação de movimentos de curto prazo e são qualificados para ter uma sensação de mercado.

Se ele comprar gradualmente EUR / USD até 1.31, ele poderá encher seus clientes sem derrapagens e terá um bom lucro com isso.

Exemplo mais detalhado:

LIVRO DE ORDEM DE DISTRIBUIDORES:

Compre paragens de 1.3100 & # 8211; 1,3110 valendo US $ 100 milhões.

Compre 20 milhões @ 1,3060.

Compre 20 milhões @ 1,3075.

Compre 20 milhões @ 1,3080.

Compre 20 milhões @ 1,3085.

Compre 20 milhões @ 1,3090.

Posição líquida = Long 100 milhões @ 1,3079.

Assim, ele distribuirá sua posição como quebra de preço acima de 1,31 e preencherá seus pedidos de stop loss.

Isso pode dar errado, se o preço não conseguir manter o momentum superior e se tornar menor.

O dealer deve então rapidamente sair de sua posição.

Mas, novamente, esses traders são hábeis em administrar suas posições e, embora eles não possam estar certos o tempo todo, como outros comerciantes não podem, eles têm uma boa noção dos movimentos de curto prazo.

Como usar as informações do fluxo de pedidos.

Mais uma vez, os bancos não abrem suas carteiras de pedidos diretamente para qualquer pessoa de fora, seria necessário ter boas conexões.

So people claiming they have some software that shows the order books for the FX market are scammers.

As volume is not concentrated and FX is an OTC market, there is no real ‘Depth of Market’ for the whole market.

The one you maybe see in your trading platform is only the DOM of your broker and retail brokers have a small role in this huge market.

However, discretionary flow information is something different.

There are a few sites that provide this information for free and I’ve been using them long enough to tell they are quite reliable.

Those are people that have some connections in the trading industry, mostly as they worked as traders too in the past.

One needs to distinguish between discretionary information like shown below and people claiming to have DOM’s for the FX market.

Flow information often looks like this:

Bids at 1.30, 1.2980, 1.2950.

Offers at 1.3080, 1.31, 1.3120.

Buy stops above 1.31.

Sell stops below 1.30.

So again, bids are limit orders to buy at a determined price.

Bids mentioned in the flow info providers will be levels where good buying interest is noted.

Offers are limit orders to sell at a determined price.

The mentioned Offers will be where decent selling interest is noted.

Market participants always look for the weaker side of the market, so both buy and sell stops will be targeted. Be aware that you shouldn’t just enter a trade and “gun for the stops”.

You need to have other factors that support your trade idea.

When using this, it is very important to keep in mind that this is additional information that may help you in your trading, but you should not trade off this information alone – that is, using them as trade signals .

Orders get cancelled all the time. We cannot know the size of the mentioned orders. Por exemplo. if there is a lot of demand for EUR/USD and rather small offers ahead, it will absorb those rather easy and continue to move up. If price stops after hitting the cluster of orders, it is not a sign that it will reverse immediately. Watch for additional signals.

Price action and sentiment comes first!

There are always bids and offers, smaller and large ones, but in the end it depends on the power of the bulls or the bears.

As I mentioned, if there is strong demand for EUR/USD, offers will do little on the way up until the accumulation has finished.

How to Use This Information.

First, determine the current sentiment.

Example: The market bias for the Pound is currently very negative and GBP/USD is clearly trading in a downtrend. I therefore will only look for opportunities to sell the pair.

Second, note key price levels. These include bids and offers from the resources I will post below and key technical levels (standard support/resistance levels).

Third, watch for price action to give you a high probability opportunity to enter short. I will cover later some of the various Order Flow technues I learnt.

For now, I just want to note that you should always use flow information like bids and offers with caution. You want the market bias to be in your favor and wait to see a reaction to those levels, not enter ahead.

I hope I have emphasized enough how important it is not to use them as trade signals, so I will post now the resources I use for the flow information (they are free):

The Thomson Reuters IFR feed also includes good flow information and Oanda offers it for free to clients.

If you dont have access to it, dont worry, there is enough info from the free sources.

The subscription from Reuters costs something like $150 a month, which is way too much and definitely not worth the price, especially for retail traders.

I use the Daily, 4H and 1H chart, but trade on the 5M to execute my trade idea.

Depends on what type of strategy you are concentrating.

If you decide to apply the stop hunt strategy, you can either enter on momentum (e. g. break of intraday S/R level -> target stops below next level) or wait for a retracement into a support/resistance level to get a better entry.

Make sure you concentrate on the high probability opportunities. Clear sentiment (i. e. currently negative GBP and JPY bias) will give you the best edge.

Technical factors include price action around the specific support/resistance level (i. e. if it bounced several times of a support level, stops below will grow larger).

If you want to fade a stop hunt, the entry should be pretty clear (near the stops).

The set up will give you the opportunity to use a tight stop, but here it is even more important to only apply it when sentiment is clear.

You don’t want to go against the flow, as it will just take out your stop and move on.

A good example is EUR/JPY. There were larger stops above 123, but sentiment was clearly JPY-negative and there was real momentum building in EUR/JPY, not just some stop hunting.

Obviously, someone who would have applied the strategy here and went short, would have got stopped out.

On the other side, GBP-sentiment was negative and GBP/USD provided a few good opportunities to fade stop hunts.

I agree that large participants certainly will look to hide their intentions, but the bids/offers mentioned in the feeds that provide flow info are rather levels where a larger amount of different limit orders reside.

Sometimes, more detailed flow info can be leaked (i. e. “x” has large offer @ 1.30), but those were mostly from corporations (hedgers).

We certainly won’t find info like “Large hedge fund has offers at 1.30”.

I also agree with your 2nd statement and this is why I strongly advised against using such info as trading signals. Sentiment has always priority to order info and traders should wait for a reaction to the reported levels, not acting ahead.

Participants In The Forex Market.

Before we dive further into the world of Order Flow Trading, we must be aware who participates in the FX market. While not all groups have the same characteristics, there are some most have in common. I will split the groups up and explain them all in more detail.

Dealers are the main market makers for the FX market as they operate on the “Tier 1” level – the interbank market. A dealer quotes his customers a bid and an ask price and the difference (the Spread) will be his profit.

As a transaction with his customer takes place, he takes the other side of the trade and can either get rid of his exposure via the interbank market or he can hold the trade if he thinks it will benefit him.

Dealers therefore can hold trades for speculation, but they usually close them in a short time period. They mostly finish their trading day without any open positions.

Dealers are well-informed traders and have a good sense for short-term market movements, so it only makes sense for the banks to let them also do some discretionary trading beside handling customer trades.

They participate in stop hunts, as I explained earlier in the thread, because they look to manage their book.

The network of dealers working for the top FX market-making banks build the “Interbank Market”, the highest tier in the FX market.

Sovereign Names.

This group includes central banks and institutions like the Bank of International Settlements (BIS).

Central banks operate in the FX market on a daily basis and when other participants become aware of their presence, they will pay a lot of attention to what they do.

Asian Central Banks are one group within the Sovereigns that are often identified in the marketplace and news providers like Reuters are reporting about their business.

Especially if things are rather quiet, they can have a strong influence, so keep that in mind! The “BIS” is an institution that handles transaction for other banks.

The idea is basically that other CB’s can operate in the market without being identified.

Nevertheless, any mention of “BIS” or “Basel name” in the news feed is worth paying attention to.

Large Speculators.

Those are hedge funds, model funds (algo & HFT trading) and large traders.

They are in this game for the profit and are the group with the greatest variety amongst members.

Some trade intraday, some exclusively long-term and some combine all of this together.

Model funds mostly focus on automated trading and volatility is something they love.

Most of the hedge funds however, will look for stable trends to ride, like the current GBP and JPY downtrends. As they are leveraged players, they can feel the pain sooner when a squeeze is happening in the market.

It is certainly not just the retail traders getting stopped out, large specs can be caught with a vulnerable stop loss too.

Dinheiro real.

They are called that way because they do not use leverage. Included in this group are mutual funds, classical investment funds and sovereign wealth funds.

They are conservative and will generally either look to manage their currency exposure or, if speculating, look for stable trends.

Hedge funds do too look for trends, but they have the ability to leverage up and switch to short-term trading if they wish to.

As you’ll understand, real money funds that do not operate on leverage and cannot get aggressive, will not be able to operate that way.

Real Money will be usually a bit late in a move, but their presence is still worth noting, as they look to accumulate positions.

Example: Real Money accounts were quite present sellers in GBP/USD the past few weeks.

Commercials.

Commercials (or corporations/businesses) are looking to hedge their currency exposure they have through their business operations, mostly due international business.

Managing their risk is the number 1 task for them and not profits from speculation.

Their activities can have an impact on the markets if they are trading in a big size, but they are not participants one should follow, as they are not profit-motivated in the first place.

Comerciantes de varejo.

The number of retail traders that lose is hard to guess, but it is definitely high.

The popularity of Technical Analysis (TA) led them to place their stops at predictable places and this can be exploited by Order Flow Traders.

Even as the number of proven trading strategies shared free has increased over time, most retail traders lack the consistency and discipline to make it in this business.

I hope that gave you a good insight who’s operating in this market and some of their common characteristics.

You are competing against other traders in the market and some of them are powerful players with a lot of experience and capital.

Without losers, there would be no winners. Start thinking about how could you exploit the characteristics of other participants.

Markets are all about fear and greed. As price moves, some will start to feel pain and will have to cover at some point.

Hunting stops and initiating squeezes in the market place is not just about retail traders, professional traders also get stopped out or are forced to cover as the position moves against them.

One of the most important thing is that Order Flow Trading is a mindset that teaches you to exploit the weaker side of the market.

You want to take the high prob opportunities and go with the flow.

Some questions to think about …

1) What are the key themes in the market currently?

2) Pick a currency and write down if current sentiment is positive, negative or mixed. What are the main factors driving current sentiment? You don’t have to be an analyst and you certainly don’t have to make it complicated. Follow a news feed or get some headlines from either Reuters, Bloomberg or Financial Times website. Keep it short in form of notes.

3) What is price action telling you? As prices moves further, compare it to your sentiment analysis.

Think about the stops of other participants.

Think about the characteristics of other participants.

Don’t just see simple “Support/Resistance levels” & # 8230; there is nothing magical about them, orders drive price action. Think about what it means for bulls if a key support level holds. Will they be accumulating further?

Does PA indicates decent demand or are the upmoves quickly running into further selling?

What if the level breaks, where does the pain start for the bulls?

I don’t want to make this complicated or confuse anyone, but in my opinion thinking more deeply about these topics is useful, especially for newbies.

Eventually, I will cover this in more detail through the thread, but take some time to see the markets in a different way than you did before.

When I just started with OFT, I thought about these themes and made a lot of notes and observed the markets.

It was of tremendous help, but I over complicated things a bit.

Just make sure you don’t over complicate things!

Reading Order Flow.

There are several services that provide real-time flow information like the one’s I mentioned above.

Again, they have to be used with caution as orders can get cancelled or can have little or no impact. Also, we don’t want to get too dependent on them.

Imagine a service get’s discontinued – you want to be able to do your own order flow analysis and not let yourself be distracted by this.

Reading order flow is possible on charts and you don’t need the flow info services necessary.

This is how the standard flow info looks like:

Bids at 1.3000, 1.2980, 1.2950.

Offers at 1.3050, 1.3080, 1.3100.

Most of the reported levels are one’s that have cluster of orders at or near it.

From the above mentioned info we could say that there is buying interest (demand) at 1.30, 1.2980 and 1.2950.

The further the level, the more interest we can expect, as traders will feel comfortable buying “very low” or selling “very high”.

Remember that price action can influence sentiment too.

If we see EUR/USD breaking below a key psychological and technical level, some traders will sell on the break (i. e. momentum funds) and with stops getting triggered on the way, this will drive price further lower.

Orders can either:

Get “eaten” along with little or none impact (this is common during a stop cascade/squeeze) Cause a slow down in momentum; price will consolidate Cause a reversal (common during times of low luidity)

When trading of reported orders, I recommend waiting for a reaction and not putting a limit order ahead.

See how price reacts to the level and how it behaves it after it hits it.

Let’s say price trades down to 1.2950, where we have reported large bids from various participants. We see price stops at the level and retraces back up.

Now, how does it behave on the way up?

Does it seems that there is real momentum building to the upside or are rallies hitting quickly into fresh selling?

Reading the order flow directly is a bit tough in the beginning and it is hard to explain it in words. You have to monitor price action as it happens and take notes.

Combine this with sentiment and you have a real advantage.

Sentiment will give you the biggest advantage. Like I mentioned in my last post, you don’t have to make it complicated.

Note key factors that are driving price action currently, analyze price action itself and keep track of how they correlate.

Let’s take the Aussie Dollar as an example. Sentiment is positive as the RBA indicated it will not cut rates in the near future and on better economic data.

Price action confirms this, so we want to look for reported bids and wait for a reaction.

Nothing works all the time, but with sentiment on your side, you’ll go with the side of least resistance.

What really turned my trading into a profitable business was focusing on the high probability trades.

They don’t require a huge stop and the reward is clearly worth the risk.

Market profile is another factor.

During times of low volatility, playing the range is the best strategy.

Let’s say we are trading in a 1.2950/1.3020 range in EUR/USD and there is no clear sentiment.

You can anticipate a reaction to the reported levels and fade any rally or drop back to the mid range level.

When volatility is high, bids/offers can get consumed along the way quickly and that is an environment where you definitely don’t want to pick a top/bottom.

When there is real strength behind the move, look to join the momentum and not fade it.

In combination with the reported levels, you can identify key supply/demand levels on the charts.

Previous day high/low, previous week’s high/low, previous week’s close level and psychological levels (big figures – i. e. 1.30, 1.31). Start to “read the flow” on the charts and you’ll get better at it with time.

Stops are also easily identified on the charts.

Just think what the technical analysis guides taught you.

They taught you to place your buy stop above the big figure (i. e. 1.30 -> stop at 1.3010) or your sell stop below the big figure (i. e. 1.30 -> stop at 1.2990). Or, above resistance/below support.

Above is an EUR/USD chart that will serve as an example.

Demand at 1.2920 was large and there were first sovereign names reported as buyers and leveraged funds later joined the move.

Obviously, sell stops were building above 1.30 and 1.3080, which flow info services later confirmed. As we moved up, they came more and more to the attention of other traders and of dealers, so it was only a matter of time.

In my opinion, it is better to enter on momentum and push into the stops, than try pick a perfect entry when you have missed the chance.

Obviously, some of those concepts will be familiar to you from some of the technical analysis concepts.

So what is Order Flow Trading about and how is it different?

What I learnt is that I have to think differently about the market.

It is a mindset that will give you a real advantage in the market as you focus on the core mechanism of the markets and on sentiment.

As I mentioned, markets are a great deal about psychology.

I will be honest in saying that my capabilities in explaining some of those specific concepts are not that wide but I hope you get something from these.

Order Flow Trading can be applied in many ways and the above mentioned are just the basic examples.

I have some more article coming soon, then I will try to make the concept more understandable through trade examples and similar.

Price action patterns can be traded successfully without the knowledge about order flow, but knowing the OFT concepts will give you an advantage, as you are more aware why is it happening and you will understand better the factors driving PA.

As I mentioned, it is part a collection of methods based on market microstructure, but also part a mindset.

It encourages you to think more about other participants and how they may act.

My path was the following: Technical analysis (the common indicator-loaded stuff) -> Price Action -> Order Flow Trading.

I see OFT as the final step that helped me transform my trading into a successful endeavor.

It might seem a bit complicated to some in the beginning, but IMO it is worth the effort. However, it is important to suit your trading strategy to yourself.

If you’re doing fine with your PA strategy and are building consistency, stick with it and only modify your approach if you are feeling comfortable with it.

When using the order info, I would concentrate on the reported levels and combine it with your PA analysis and sentiment analysis, rather than focusing too much on who bought/sold.

When there is talk of sovereign (i. e. BIS, ACB) buying/selling during illuid times, it can have an impact, but most of the times it is already old news.

If we hear a large hedge fund has bought EUR/USD this morning, it won’t matter much for us.

We do not know what the size was, what is the trade idea behind it and it is already old news.

Regarding your 2nd question: I can only reference back to my previous response to you.

What changed OFT for me, was that I could better determine the forces that were causing the PA pattern.

Together with sentiment analysis, I can focus on the high probability opportunities and learning OFT also improved my skills in reading PA.

There are a lot of inefficiencies one can exploit in the market once we get more familiar with market microstructure.

Análise de sentimentos.

Sentiment analysis is an important part of the Order Flow Analysis.

One could focus only on the technical stuff, but incorporating sentiment reading into your analysis will help you to focus on the higher probability trades.

One has not to go to deep into fundamental analysis to apply it.

I do not in-depth analysis about the global economy or specific countries, but rather focus on the key themes in markets and follow news.

There are a lot of free news feeds out there and most brokers offer the one from Dow Jones.

I personally use only the IFR Markets feed from Reuters, but again, the one from Dow Jones or websites like ForexLive will also serve you well.

So what should you be looking for?

1. Key Themes in the Market.

What are the key themes everyone is talking about in the markets?

This should not be too difficult to identify, as news services will report about them frequently. Currently, we have:

a) Cyprus bailout.

b) BoJ Inflation Target.

c) UK’s stagnating economy.

d) The Fed’s response to the improving US economy.

There are themes that will have a long-term impact like the Fed’s future policy and those with short-term impacts like a worse than expected economic data release of lower importance or some temporary political fights.

The short-term impact events often cause inefficiencies, which the OF trader can fade.

The long-term impact themes are the ones that are driving flows and even if you are day trading, going with the flow will give you an edge in the market.

2. Keep Track of Sentiment/Price Action relationship.

I will always look for obvious sentiment (like currently e. g. AUD-positive) and keep track of the price action.

If bias for a currency is positive, because of e. g. improving economic data and good chances of a rate hike, I will look for price action to deviate from this and enter long on a favorable opportunity.

This can be caused by a short-term impact event or it can be a “natural” retracement (profit-taking, short-term market participants).

One of my favorite patterns is the counter-sentiment stop hunt, which I explained earlier in this thread.

If we take again the example of the currency with positive sentiment, we want to look for a stop hunt down into sell stops and fade it.

Especially when there is no specific event/reason driving prices, just a “random” stop hunt, this will offer great opportunities.

3. Price Action Can Influence Sentiment.

It’s a two-way relationship. Like I mentioned in one of my earlier articles and Minotaur wrote about a few posts above, price action also influences market bias.

Let’s take an example from today: Shorts were worried keeping their position open over the weekend as any improvements in the Cyprus bailout deal could lead to a larger spike on the Sunday opening.

Even as market bias for the Euro is negative, the risks are too high for shorts.

There is a short-term base at 1.2880 and the level was respected.

Once buying picked above 1.2940, shorts got even more worried and probably felt there is a squeeze ahead.

Stops above 1.2950 were eventually triggered and it attracted further buying until we finally hit stops above 1.30. Adivinha?

We had reports of large offers sitting at 1.30 during the whole week, so short-term participants took advantage of weak shorts by pushing into their stops and some other participants got themselves good short entries at 1.30.

The situation in Cyprus is still bad, but given the lack of concrete news, the market “cleared” the weak side of the market.

Conclusão.

Don’t make it complicated and keep your sentiment analysis simple!

Note key themes in the market, follow the news (focus on one feed and key headlines, don’t become a victim of analysis paralysis) and study the relationship between your sentiment analysis and price action.

Think about your opponents in the market and try to identify the weak side of the market.

Finally, combine it with technical order flow (key levels, stops) and keep in mind that price action can influence sentiment too!

Here is one trade example, it is a position I still have running.

I shorted CL (Crude Oil Futures contract) at an average price of 95.30 as the stop hunt above 95.50 was completed. Sentiment turned negative pretty quickly in FX markets, but US markets were still trading in a tight range.

The choppy price action in the indices and my strong conviction about current negative sentiment in the markets gave me a good reason to stalk a short set-up in CL. Why CL?

Stop hunts occur in every market, but in CL it just tends to “stick out”.

I watched stops getting consumed on the way up and waited for price to lose momentum.

Stops above 95.50 were done and everything indicated CL hit into decent selling interest at 95.50. While upside momentum was quickly regained on the previous move, this was not the case after it hit 95.50.

So, price action combined with my view of negative sentiment, made me short CL at 95.30 and I’ll leave it open for a stop run below 94.

I’ll trail my stop on the way down.

It’s important that I note that it is sentiment that made me anticipate the set-up.

I do not advise going against momentum unless you have sentiment in your favor.

Opções de barreira.

Barrier options are exotic derivates and an option on the price of the underlying asset.

The option writer (typically banks) sell options to the option buyers .

FX Options are traded over-the-counter and not on exchanges.

If the option expires worthless, the option writer has earned the premium (similar to a comission as you enter a trade) and the option buyer has lost.

If the option is in-the-money, the option writer has to pay out the option buyer the specified amount.

Knock-In Options – the option is worthless until the underlying asset hits the specified barrier price in the set time period. Example: EUR/USD spot price is 1.28 and I buy a 1.30 knock-in option. The option is worthless until it breaks above the 1.30 level.

Knock-Out Options – the option becomes worthless if the specified barrier level is hit. Example: GBP/USD spot price is 1.51. I think the pair is heading higher, but do not expect much volatility. If I buy a G/U option with a barrier at 1.53 and it does not reach the price level in the specified time period, I get paid. However, if price breaks above 1.53, the option will become worthless.

Double No-Touch Options - Just like the knock-out option, but it has two specified barrier levels. Example: DNT option for 1.26 / 1.34 in EUR/USD. If price stays within the set range during the stated time period, the option writer has to pay me the specified amount. However, if price breaches any of these two barrier levels, the option will become worthless.

Double One-Touch Option – Knock-in option with two set barrier levels. Example: GBP/USD 1.46 / 1.54. I will get paid on the option if it reaches either of the two set barrier levels during the specified time period. If it does not, it expires worthless.

Barrier options can trade in decent size, there are sometimes ones in the value range of 500 million up to 1.5 billion. Let’s use an example for the Knock-Out barrier option, as it the more common used one.

Put yourself in the position of the option writer.

You sold a 1.27 / 1.34 DNT barrier option to a customer with a 500 million $ payout.

Price is approaching the 1.27 level and that is exactly what you want to see.

Once it hits 1.27, you have pocketed the premium and will keep the half billion.

This is why option desks will gun for these barriers and try to get them triggered. Similar to the FX spot dealer, you want establish a short position and increase downside momentum.

As there are often stops located above/below barriers, this will help to attract the attention of Spot dealers and of predatory traders gunning for the stops.

On the other side, there is the option buyer that has great interest to keep price away from the 1.27 level.

Not everyone can buy a option in that size ($500m), so you can be sure he’s got some firepower too.

He will try to buy ahead of the level and hope there will be also other bids in decent size. A good example is the 1.28 barrier option in EUR/USD that got triggered today.

The option buyer was lucky yesterday, as there was decent demand from Asian Sovereign names and corporates that kept the pair above the barrier level.

However, EUR-negative sentiment led to fresh selling this morning and the pair broke below 1.28.

When we talk about barrier options in decent size (at least, larger than $50M), they certainly can have an impact on markets.

However, I don’t want this to look like there is a battle whenever a barrier option appears.

Just to mention one reason, there are participants that simply don’t care about some barrier option, they are gonna execute their trade idea nevertheless.

Some things to keep in mind:

The “battle” will be more intense if the expiry is near. If the 1.27 barrier option in EUR/USD expires in two days and we are approaching the level, there will be very likely some effort from the option writer to get price down there and from the option buyer to keep price above for these two days. On the other side, if the option expires in two months, but it seems very likely we will break below 1.27, defence from the option buyer will be minimal. Sentiment & amp; Market Profile! If we get bad news from Europe, there will be a lot of selling coming in and nobody’s gonna care about some barrier option. The option buyer will most likely also see that it is not worth defending the barrier – why additionally waste money?

Note reported barrier options (IFR, ForexLive, I mentioned earlier) and establish a position to push into the barrier level.

Preferably, go with sentiment.

Example: There were 1.28, 1.2775 and 1.2750 barrier options reported and sell stops reported below them.

One could not have a more beautiful OF trade: Establish a short position and gun for the barrier and stops below. Given the average daily range of EUR/USD, 1.2750 would’ve been a realistic target.

But a good approach would also be to establish a position and take partial profits as each of the barrier gets triggered to your final target.

In general, it is more preferable to go with the option writer and attack the knock-out barrier, especially when sentiment favors such price action.

However, in a market environment with little volatility and tight ranges, barrier protection can be stronger.

Psicologia do mercado.

Putting ourselves in the shoes of other traders is an effective way to get a better feeling for current market bias .

Remember, fear and greed play a big role in the markets.

Having a good understanding about market psychology can give you an additional edge in the markets.

As price action develops two things happen:

some traders will be driven by greed and other will start to “feel the pain” as the position moves against them.

Let’s take EUR/USD as example:Going into the last ECB press conference, the market was largely short and buying interest was not very high. However, after the ECB meeting, the Euro rallied.

While there were fundamental reasons for the move, price action itself contributed to the shift in sentiment.

As we broke above 1.28, predatory traders were getting ready to push into the large buy stops above 1.29.

Price was moving higher and those positioned short got more nervous.

It was obvious there is a short squeeze ahead and eventually stops above 1.29 were triggered.

In this example, we can see while the shorts started to “feel the pain” and had to cover, the longs took advantage of it and pushed into their stops.

This goes on until some kind of balance is established.

When sentiment takes a turn again, the process will repeat. Let’s say, there is really bad news coming from Cyprus and Euro bias turns negative.

EUR/USD would be driven lower by fresh selling and sell stop clusters would come to the attention of other traders.

Traders positioning is important, whether you daytrade or swing trade.

You can keep an eye on COT positioning for a medium-term view on positioning.

Even if it is lagging a bit, it is still useful, especially when positioning hits extreme levels.

For short-term positioning you can guess it pretty easily once you watch price action for a certain period and get some feel for the markets.

So, here is some homework: Try do apply some of this in your trading.

In the previous sections, you have learned about other market participants characteristics and how to identify stop clusters. Combine it with the above mentioned method.

Important: Don’t try to see a stop hunt or squeeze in every move. Stay focused on the key technical levels and the stops that are located above/below.

On a personal note…

I’d like to share some of my experiences in the trading business.

Like most people do, I got into trading with the “Get rich quick” mentalidade.

The world of trading is exciting, it is easy to get lost in emotions.

Prices moving rapidly, news coming in every minute and tons of various chart patterns – I tried to get as much information together as I could, with the belief it will not take too long until I’m making serious money.

We all know how these stories end – with a blown up account! I didn’t lose all the money in my first account, but I was pretty close.

I’m thankful for this experience, as I got at least rid of the “get rich quick” mentalidade.

I decided I’ll simply get rich slowly…

As I mentioned in the opening post, I started trading in the stock market.

I wasn’t really an active trader, doing some simple technical analysis, combined with some fundamental analysis and holding trades for at least a few days.

When I got out of equities, it was the forex market that got me all excited about markets & trading and made me decide that I want to build a business out of it.

We all felt that excitement about trading currencies, right? The largest market in the world and a truly global one – open 24 hours, 5 days a week.

I started applying various forms of technical analysis, from indicators to chart patterns.

I thought this has to be the key to successful trading – an approach that rationalizes price movements with all available information included in the charts.

Why use fundamental analysis?

It was all in the candles, I thought.

For some time, I went through the highs and lows of trading – being overexcited when hitting a winning streak and frustrated as I realized that my strategy “did not seem to work anymore”.

Like most traders, I then removed all the indicators and traded the naked charts.

This gave me a little better understanding about the markets, as I focused on price action, not on indicators. I did better than in the first stage of trading, but still lacked consistency.

I always felt that I’m missing a piece of the puzzle and it kept on bugging me.

This prevented me from strictly following my rules and achieving the consistency I was seeking.

However, I had that deep felling in me that trading is what I want to do.

I’m sure many of you had the same feeling at some point? I HAD to succeed in this, not because I desperately seeked a way to accumulate wealth quickly, but because I’ve found something I love to do.

So, I did not rest and continued to do research.

After spending some more time with price action trading, modifing various strategies, I stumbled upon a few threads about order flow on FF.

The topic seemed a bit complex on the first look, but I felt that I’ve finally found the missing puzzle piece I was looking for.

See, it’s not just the order flow strategies I’ve been applying that turned me into a consistent and successful trader. It is the way of thinking – the mindset – of an OF trader that was a game changer for me.

Instead of rationalizing everything through technical analysis, I chose to study what other participants operate in the marketplace and what characteristics they share.

I see the markets completely different now and I can get a feeling for market bias much easier. My knowledge about market microstructure help me understand events that occur in the market in a clearer way.

It is a constant seek for luidity and clearing out the weaker side of the market. This is no overstatement – your loss is somebody else’s gain.

Trading is not my primary source of income, but it provides a nice, additional flow of money and I love to trade.

Not depending on the money allows me to trade stress free.

If you want to be successful over the long run, you have to stop thinking about the money.

I know it’s very hard.

It took me years to achieve it.

But after you calculated your risk and reward on the trade, stop thinking about the money!

You have to think objectively about your trade and focus on your plan. As soon as you start to think about the cash, stop the thoughts!

Furthermore, you have to find a strategy that suits you.

You have to feel comfortable applying it and you need to have confidence in what you are doing. Doubt can be very costly in trading.

Follow your trading plan strictly after you have a strategy that you’ve tested and feel comfortable with.

We all go through tough times, I still have them too.

But you have to stay calm and think about your long-term goals.

Also, don’t compare your results to those of others.

I couldn’t care less if there is a guy making millions with system “XYZ”, I got a trading style that suits me and I’m the only person responsible for the risks I take. When you’re in a trading room, stay honest.

You will gain nothing if you act like a pro trader.

Be honest to yourself in trading and accept temporary defeats. Be honest when you need help.

If some people make stupid remarks about the mistakes you’ve made, ignore them, they are likely people without self-confidence, acting likely they are perfect traders and trying to hide that they’re actually losing.

Truth is, trading is a tough game.

Like every other profession in life, it takes time to get to a pro level.

YOU will be your biggest enemy as it is unavoidable that you’ll be driven by emotions from time to time. It is key that you keep a cool head and think long-term.

I wrote all my trading rules (analysis, strategy, entry, management, exit, money management) on a paper sheet and sticked it on the wall, so I can always see it from my trading desk.

When you find yourself tempted to break a rule, keep an eye on the plan and do the right thing…

I cannot say if Order Flow Trading is something for you, or not.

You will need to find that out by yourself.

But what I want you to understand is that if you study OFT and apply it, it is not limited to a specific strategy.

It does not mean you have to trade stop hunts. Like I described earlier, it is a mindset and you can combine it with other strategies, which do not have to be directly OF-related.

Start by studying market microstructure.

You will great info in Darkstar’s book, Carol Osler’s academic papers and the various threads on the internet.

To conclude, trading is a lot about psychology and no method or strategy can guarantee you success, but you will see that through the OF mindset, you’ll be able to see the markets from a different, more advanced perspective.

Applying Order Flow Technues on the Charts – Parte I.

Understanding the importance of luidity and what role stops play in the markets, you can now apply it directly in your trading.

While there are several services that report where stop loss orders reside, it should be your goal to learn it yourself. After all, we want to make sure we are not too dependent on any news service or similar in our trading.

There a few key things you need to keep in mind about the accumulation of stop loss orders in the markets:

1) The higher the timeframe, the higher the number of market participants being aware of a certain technical pattern and placing orders based on it.

Simply, more traders will notice a pattern on a 4-hour chart than one on the 15 minute chart. There is a lot of noise on the minutes charts and not many traders will bother with interpreting too much into it.

2) The larger the number of confluences, the larger the size of the orders.

If a key resistance level happens to be near the 200 simple moving average and the 50.00 % Fibonacci level from a key market swing (i. e. drawn from the monthly high to the monthly low), it will get even more attention and orders around it will be larger.

3) The longer a pattern exists, the larger the size of the orders.

Let’s say we have an established range in EUR/USD between 1.30 and 1.32. Limit orders will start to cluster at both levels and stops will be placed below 1.30 and above 1.32. The longer the range exists, the larger the stops will grow until one side finally cracks and triggers the stops.

We can see in the example above that GBP/USD traded within a 1.5450 – 1.5600 range. Stops were growing larger on both sides as price remained within the range.

There were two things telling us that the downside was more likely to crack than the upside: 1) Weak UK fundamentals combined with USD strength and 2) the way price action reacted as it tested the lower range, we actually took out the stops below 1.5460, a sign that buyers aren’t as strong as the sellers ahead of 1.56.

Remember what I taught you about market psychology.

Once traders start feeling uncomfortable with their position (at least the professional one’s), they will look to cover. GBP/USD was just not able to break convincingly above 1.56 and on every failure, which was followed by a downmove, there were some longs covering.

The sellers were able to play this game for quite a while and they finally gained the upper hand on Friday, being able to push the pair into the weak sell stops.

Applying order flow trading is considering the technical picture and taking advantage of the weak side of the market.

How to Mark Large Stop Clusters on your Charts.

1) Open a blank chart – start with the Daily chart.

2) Note key support and resistance levels on the Daily and note at which price level the 200 SMA is trading. If you wish, draw a Fibonacci retracement from the latest major swing low to the most recent major swing high.

3) Move down to the 4H chart and again note the key S/R levels. Mark them in a different color.

4) Switch to the 1H chart and repeat the process, noting minor S/R levels. Again, draw them in a different color than the previous ones, so you can regonize them more easier.

Here is an example (EUR/USD):

I started with the Daily and moved then to the 4H chart, noting key support and resistance levels.

Repeat the process on the one hour chart.

I did not mark the Daily 200 SMA and the Fibs on the example above, but feel free to do so if you consider it helpful.

Stops are building below major support levels and above major resistance levels with limit orders very likely ahead. Your task is now to get a feeling for market bias and read price action to recognize the weaker side of the market and take advantage of them.

Applying Order Flow Technues on the Charts – Parte II.

In the last section, I described the process of finding large stop clusters on the charts.

Now, I will try to explain how I read price action with the Order Flow mindset applied.

So why do key support/resistance levels work most of the times?

There is psychological attachment to them! That’s why!

Let’s take EUR/USD for example:

1.2980 to 1.30 is currently strong resistance and sellers are lining up offers there in anticipation that the level will hold. Traders that are short EUR/USD are watching this level closely and a break above 1.30 would be painful to them.

Just think of the situation where you feel quite comfortable with a position and think it will run further in your favor and then suddenly you see a sharp move which takes out a i. e. key resistance level.

Even professional/institutional traders have such situations where it doesn’t make sense for them to hold a position further.

As the 1.2980-1.30 zone is an established resistance zone, EUR/USD shorts are watching it closely and how price action behaves in the zone can largely influence market sentiment.

If we get another run into 1.2990, but it fails to even reach 1.30 and drops back quickly, the bears will feel renewed optimism.

Bulls on the other side will feel frustrated and will question whether their EUR/USD long position makes sense. Stops are building on both sides and it’s just a matter of time until it becomes clear which side has the upper hand.

What if we get a breakout above 1.30 and stops from EUR/USD shorts get triggered?

Bulls will have gained the upper hand in the short-term as they cleared some of the shorts, but much will depend on price action after this event.

Most important of course, are fundamentals. But then, are the dips well-bid compared to the selling that occurs at the rallies? Are bulls showing a strong initiative to keep price above?

A false breakout followed by another drop would mean this was just a short victory for the bulls.

To conclude: When trading you want to think about the other participants and what they are likely to do in a certain scenario.

Sentiment analysis can give us a very good edge and it can compensate if you struggle a bit with understanding fundamental analysis.

Price action can also reveal a good amount of information – keep an eye on how the dips and the rallies look like. If we have small rallies, but strong downmoves, the bears are in control.

How To Analyse Market Sentiment.

How do you tell if the market sentiment is negative or positive for a currency pair?

Here’s are the steps:

I start by checking the relevant headlines on Reuters, Bloomberg, reading the opening reports on OrderFlowTrading and then write down what I perceive as prevailing sentiment for each major currency. Then compare the market sentiment to price action.

All resources you need for sentiment analysis are available for free, so there is no need to subscribe to any services with in-depth analysis.

When I was a beginner in order flow trading, I found it more useful to focus on the key headlines and topics traders are talking about.

When you got an idea about the market sentiment, compare it to price action, make brief notes and see at the end of the trading day if you got it right (or not).

Again, don’t get confused by all the intraday noise, but focus first on medium-term sentiment.

Sentiment Analysis Example.

Lets Look at Australia, the AUD:

& # 8211; RBA likely to cut rates further this year, while the FED is expected to scale down it’s QE program.

& # 8211; Australian fundamental data doesn’t look healthy, Chinese growth is slowing down, commodities prices are dropping.

& # 8211; Prevailing market bias is negative.

& # 8211; COT data shows AUD short positioning is not at extreme levels yet, could still expand.

& # 8211; Price action shows small rallies and large downmoves.

& # 8211; 0.96 is now the key level everyone is watching.

When fading, I wait first for a reaction to the level.

Even if sentiment is in our favor, we must keep in mind that orders can be withdrawn or that a sudden turn in flow occurs and the levels breaks without much effort needed.

A good example is currently AUD/USD.

While sentiment remains negative overall, there was quite some short-covering going on today and it took out the 0.95 and 0.9550 resistance levels easily.

Look how price acts once it has broke a major technical or large order level. Assuming a large resistance level where offers in good size reside, you don’t only want to see price slowing down, but also how it reacts later.

In this example, rallies should be small and downmoves larger.

For this, I switch to the small timeframes (M1, M5) to see the PA more clearly.

If the dips ran into good buying interest and the rallies seem stable, you don’t want to fade the move.

It all comes down to risk-reward, when there is clear sentiment, you can go sometimes ahead and fade it, but the most important thing is that you accept when you are wrong .

For example, if someone focused on the AUD-negative sentiment and forced himself to believe the Aussie has to trade lower, he would have got hurt today.

If you fade and the trade goes wrong, accept it and either a) go with the flow or b) stay out of the pair.

The point of order flow trading is going with the overall flow and taking advantage of inefficiencies and not fighting the strong flow.

Go ahead and compare two pairs.

AUD/USD as it broke above the key resistance level at 0.9550 today:

O que você vê?

1) Price broke above pretty clearly, taking out the offers without much problem.

2) More importantly, the dips remained well-bid.

3) Price broke back below the now-support 0.9550 level, but strong buying interest at the dip to 0.9535.

This is how a well-bid pair looks like and something you don’t want to fight.

As you can see, AUD/USD broke above 0.96 later.

See how parabolic that move was?

Not only that, but how little support it found after that stop hunt? Combine this with mixed sentiment and you have a good fade trade.

Now, I hope you can understand what I mean by reading price action.

It becomes much easier with time and you’ll start to see things much more clearly as you gain experience.

I trade quite often on intuition, because I’ve watched markets for so long.

Market Squeezes.

You have probably already heard the term “squeeze” in financial markets.

It describes a market where traders are caught overly positioned to one side, which leaves them vulnerable to sentiment-changing events or large players taking advantage of their vulnerability by engineering a “technical” squeeze.

How A Market Squeeze Can Happen.

There are two main ways market squeezes can happen-by an event/news or by technical reason.

I will explain each below…

1) DUE TO AN EVEN THAT HAS CHANGED SHORT TERM SENTIMENT.

A very recent example is the USD/JPY squeeze we saw the last night in the Asian trading session.

Traders expected that the Japanese Prime Minister Abe and his party will win the majority in the Upper House election – which they did.

However, this was already priced in as many traders bought the USD/JPY on Friday on those expectations.

This resulted in a squeeze of the traders who were positioned long. Those who where long, took profits, and some predatory traders joined the selling to profit from the move.

Once the stops below 100 started to getting triggered, downside momentum picked up until we ran into good-sized bids around 99.60.

2) DUE TO TECHNICAL REASONS.

Large players can engineer a short squeeze without an event to gain more favorable conditions for themselves.

This is most commonly seen as a stop hunt, as the stops from those short-term traders are usually triggered in this process.

You have to keep in mind that it is the job of financial journalist to always find a reason why a certain price move has happened.

So if you notice that there is really no reason why a certain pair moved, but you are aware of the fact that positioning is either overly long or short, you can imply that this was simply a stop hunt.

How To Take Advantage Of Market Squeeze.

1) If there is no reason for a certain price move and you are sure it was only stop loss-driven, you can fade the move and trade in the direction of the trend/sentiment.

You could of course join the squeeze and try to hunt the stops, but you need to be quick.

2) The squeezes that happen due to an event that has changed short-term sentiment or even medium-term/long-term sentiment endure longer and you can take advantage of those trapped traders that are caught on the wrong side by joining the squeeze.

For example: Let’s say the RBA (Reserve Bank of Australia) does not cut interest rates in August.

The majority of traders expected they would do so and positioning is extremely short. O que vai acontecer? We will see a larger short squeeze driven by position covering and stop loss triggering.

Tools for Market Positioning:

Retail positioning is of course not significant for such a large market, but you can use it to get an idea what some of the retail traders are doing.

Most of them use similar strategies and a large majority of them is positioned wrong, so you want to notice when market positions is overly long or overly short.

COT Charts (based on the CFTC IMM report released every Friday):

Sites where you can get occasionally info about overall FX interbank positioning (from what I’ve figured out they derive it from various bank reports etc.):

Don’t forget to share, like, tweet, link or comment if you have enjoyed this order flow trading guide. Obrigado.

Beginner’s Guide to Order Flow Trading using NOFT.

Introdução.

Order flow trading is probably one of the oldest methods of trading, which is about forecasting where big traders are placing their orders and generating trading decisions based on others’ positions. It is an estimation of the direction of market movement and how the trades of big brokerage houses/institutions are affecting the market. In this regard, it is more of an understanding of the market, rather than being a strategy.

Order flow trading requires identification of an ideal trade locations and cashing on the opportunity. It is generally done using the order books, which are essentially an electronic list of Buy and Sell orders, arranged as per price time priority. The size as well as the price of these orders is mentioned in the order book, which becomes a great tool to analyse the market direction.

Being “In Trend”

Stock markets have always been dominated by traders who try to follow the trend. They meticulously study the market movement and pick up patterns, from which they hope to generate positive returns. During the inception stages of the stock markets, traders preferred gut instinct to analyse the underlying truth behind the price movement, due to lack of sufficient data points.

However, with the advent of digital trading and evolution of technical analysis, several tools are now available in the market, which captures the motion of price based on parameters like 200-day moving average, Fibonacci, candle stick price, etc. For a keen eye, these order flow analysis tools are extremely relevant to understand the market auction as well as sentiment Therefore, a strategy rooted in understanding order flow will always be backed by spotting the trends.

Tipos de pedidos.

Order books are extremely dynamic in nature, and updated in real time intraday. All order-driven markets use order precedence rule and trade pricing rule.

Ordem de Mercado.

A Market Order is an order to immediately buy or sell the stocks at the best available price. An example of market order leveraging strategy is the Moving average (MA), which weeds out the ‘noise’ or random price fluctuations of the market. When the price crosses above or below a moving average, a potential change in trend is observed and can only be traded through market order.

Ordem Limitada.

A limit order is an order to buy or sell a given quantity of stock at a specified limit price or better. A limit order book represents the remaining orders standing at various price limits post the execution and cancellation. Although the limit order offers a better price than a market order, there is no guarantee that it will be filled. The probability of filling a limit order is referred to as the Execution Probability. Major exchanges in the world including Tokyo, Hong Kong and Australian Stock Exchanges operate under the limit order driven system.

How to trade with Order flows.

Know where to trade.

Identify the Trade locations.

Trade locations are where the large institutions are buying or selling. It is important to identify these areas as a trader who goes by order flow will trade there. This can be done by using several available tools on the internet, one of which is NOFT’s Institutional Edge System. The following is a screenshot of the system.

Through this, it is also easy to identify the areas where large institutions have stepped in the game, by creating volume composite indicator or Ghost Block . That ways, a trader can locate the most profitable locations, where the trade can be entered.

Source: Ghost Block NOFT.

The important thing here to note is that all these analysis can be done pre market, which gives the trader advanced knowledge of where the institutions have parked their money or willing to take risk.

Know when to trade.

Using Order Flow.

Order flow tells us when to trade. A trader can use an order flow sequence tracker (OFST), such as the following, to analyse a candle. It gives good information regarding the aggressive buyers and sellers. These OFST has multiple real-time signals, like the “unfinished business”. It is signal where a candle is not completely finished, which can be eventually studied to identify scalp trading opportunities. This information flows to the trader intraday and is based on order flow sequencing. Similarly, block trades are indicative of large scale institutional involvement and high volume areas. Therefore, using order flow, a trader can determine the entry points in the trade.

Reduce Risk and Boost profits.

Once a trader has entered the trade, the most important thing is to plan an exit strategy. Therefore, it is important to have a trade management system like the institutional money flow tracker which points at the risks and tells the trader when and where to exit. This tracker monitors the activities from the time a trader enters the trade. It also calculates all the ‘buys’ and ‘sells’ to arrive at a Cumulative Delta. If the delta is positive, the trader continues to go long or otherwise exits.

It is absolutely essential to understand how the market behaves if there is an intent to pursue a long career in trading. Of course, basic knowledge of candlesticks, support and resistance, etc would come in handy, but to analyse the markets deeper, order flow analysis needs to be done to identify the key points. Intensive research work has been done in this direction, especially in limit order books, which digs deeper into pricing mechanisms.

Orderflow & Orderbook Indicators for NinjaTrader.

Order flow reading and day trading strategy.

Order flow reading and day trading strategy.

Order flow is not only tape reading, T&S or DOM. We believe that this tools rather complicated for most of day traders to understand in all details and to use. Order flow on the chart or order book on the chart with time scale is much more convenient for traders who operates basically on big time frame charts. Also on time-framed charts day trader can observe market in some period of time sufficient for making trading decisions.

How to add order flow reading to your day trading strategy.

So trader need second chart with much smaller time frame in addition to main chart or big picture. In this example we added 10 Seconds chart to 30 Min main chart.

Our ZN futures example strategy is based on Market Profile TPO. We want open positions on strong day levels like POC, IBH/IBL, VAH/VAL (including previous day), tests of single print areas etc. On this levels we want to trade only two scenarios – breakout or reversal.

On big picture we can see up trend because value area (VA) of current day is higher than VA of previous day. But inside current day we see down trend because we have LH/LL price action. So we want to spot area to enter long by global trend direction. For our purpose we will use mzMarketDepth and mzAggressiveTrade NinjaTrader indicators on 10 Seconds chart.

In area 1 we have a test of a single print area of previous day (see 30 Min chart). mzAggressiveTrade indicator shows to us only couple of small sell trades before this level. But mzMarketDepth shows high density of limit orders in DOM. We can suppose now that there is some “big buyer” on this level. Now we are ready for buy scenario. But we need confirmation. And this confurmation is big aggressive buy trade 2655-Lot. Now we can enter long.

In area 2 we have current day POC retest. Now we don’t see big seller on mzMarketDepth indicator. We see very big aggressive buy trade 5k-Lot. But this can be stops of sellers who entered in area 1. So we need confirmation again. We can enter long on POC breakout after some initiative to buy, in this case it’s cluster of aggressive trades.

Download, unzip and copy xml to NinjaTrader 7 chart template folder: C:\Users\<Your user name>\Documents\NinjaTrader 7\templates\Chart.

Reading Order Flow with Price Action.

Price Action as many traders know it is what price is doing and how it is behaving on a chart. For many traders they flick on their charts and will see candles moving up and down.

A deeper look into price action shows us that what they are actually watching when they watch the candles move up or down is the market order flow that is taking place.

Price Action is the direct result of what has happened with order flow. In other words what the big guys are doing can be seen directly through price action on our charts. It is said that “price action is the foot print to the money” and this is true because through the price action on our charts (the foot prints) we can see what the market order flow is and more importantly where it is likely to lead.

Price Action and Indicators.

All indicators including the commonly used indicators such as moving averages and Bollinger bands are built using the information that price gives us. It is also true that all indicators will lag due to the fact that they first have to process what old price has done before trying to predict the future.

The reason price action trading is so successful and used by most professional traders is because you are reading the order flow from the market as it is continually printed onto your chart in real time.

Obviously being able to assess the market in real time with the use of price action is a lot more useful than looking to indicators which are lagging behind.

How Can We Use Price Action Order Flow?

Order flow is being printed on your charts every second the market it is open. You can simply look at any chart to see price moving up or down to see what the market is doing.

Being able to use this information and to trade with it profitability is the next step in the process.

The reason a few key patterns in the market can be very profitable time after time is because they are showing key signs of market order flow and market dynamics .

One very simple example is the Pin Bar.

Reversão de barra de pinos.

The Pin Bar is a very simple one candle pattern that is especially good at changing the market direction and creating a reversal.

To read about the basics of the Pin Bar please read this article: The Pin Bar.

The nose of the Pin Bar is telling a lie and setting a trap that will stop out many traders. To understand why the Pin Bar is successful we must look at the order flow behind the pattern to understand how we can do the trapping and not become the trapped.

As the Pin Bar is being formed many traders are trading and looking for a break out trade. They are entering in the direction of the Pin Bar nose and looking for price to continue. For the Pin Bar to be created one of two things needs to happen;

The buyers/sellers must come in with more pressure to reverse the price or, Traders begin taking profit which leads to price reversing.

The two charts below explain how the Pin Bar is created with order flow. In the example below we have a bullish Pin Bar. Originally traders would have been short looking for a breakout lower. Chart one show’s how price would have looked as price was breaking out. People were selling and looking for price to continue moving lower.

At some point traders either started taking profit or a fresh wave of buyers came in that pushed price higher. Chart two shows the Pin Bar which has now been created after this fresh push higher.

For the Pin Bar to work and be a successful trade price must move higher to complete the trap. It is here that a lot of stops will give fuel to help price bounce higher.

All the traders who traded for the breakout have been successfully trapped. The breakout traders will have a lot of their stops above the Pin Bar high hoping price does not break higher as they will be stopped out and effectively trapped. It is for this very reason that the Pin Bar will get its next push higher due to stopping out the break out traders. See the chart below for a detailed look;

A clean price action chart below shows how this works on a real chart. This chart highlights how the Pin Bar is formed and then how it takes out the stops to move higher.

The reason a few key price action signals work time after time and repeat themselves, is because they are showing traders the signals of order flow and tipping them off to where orders sit in the market. The traders who trade these patterns can learn to make sure they are on the correct side of the order flow, and not being trapped by the big guys.

In the Forex Price Action course you are taught the key price action patterns that indicate market order flow. You will learn the patterns that repeat themselves, and also how you can best position yourself to take advantage of them.

I hope you have enjoyed this article.

Safe trading all the success,

Johnathon Fox.

Johnathon Fox é um trader profissional de Forex e Futuros que também atua como mentor e coach de milhares de comerciantes aspirantes de países de todo o mundo. A Johnathon é especializada em ajudar traders a transformar suas negociações com métodos de negociação de ação de alta probabilidade e estratégias corretas de gerenciamento de dinheiro.

MAIS ESTRATÉGIAS DE NEGOCIAÇÃO.

Doente de ficar falsificado fora de seus comercios de Forex?

Você frequentemente se esquiva do mercado ou entra em uma negociação apenas para vê-lo rapidamente se encaixar no outro? # X02026;

Como você pode negociar a estratégia "Trigger" de "Combo".

A "estratégia de combinação" é uma estratégia altamente eficaz em que o preço forma um sinal de acionamento de reversão e segue imediatamente "##02026;

Qual é o seu trabalho como comerciante de ação de preço? Você já se perguntou ou pensou sobre isso? Ou você acabou de obter & # x02026;

Use o Exercício Coin Flip para ganhar vantagem sobre os outros comerciantes.

Como você ganha dinheiro negociando Forex? Qual é o mesmo princípio básico se você está vendendo maçãs, óleo ou & # x02026;

Make better trades.

Algovisor is a highly efficient way to analyze exchange data on the "quantum" level. Algovisor significantly broadens your analytical skills – the skills you can use to read the order flow. Algovisor visualizations will allow you to see the full information from the exchange and create trading strategies based on the order flow.

Algovisor is an innovative way to visualize the order flow on the event level. It boasts highly accurate market data and professional instruments.

Synchronized flow of limit orders and trades. All events are shown as received from the exchange core. Connecting to various exchanges, including CME (MDP 3.0 adapted), CBOT, NYMEX, COMEX, ICE, EUREX, LIFFE (NYSE, Forex, MOEX coming soon). Simultaneous connection to various data feed providers. Ability to show exchange spreads and combinations (Calendar, Butterfly, Condor, Inter-commodity Spreads and Implied Spreads) in all visualizations. Exclusive algorithms of "equalizing" the order flow coming from the low quality feed. Automatic recognition of Implied Transactions, FOK/FAK orders, Icebergs (any type). Manual recognition: Limit if Touched (LIT), Market if Touched (MIT), Market to Limit (L), Percent of Volume (POV). Ample opportunities for raw historical and restored event-by-event data analysis.

Algovisor team is aimed at improving trading experience of its users:

Market transparency . Algovisor functionality makes a new standard of data processing transparency, which results in unprecedented market view. In future, we are going to give even greater opportunities for analysis and trading of the larger number of market instruments. High efficiency. Algovisor is a high performance solution. Speed matters. Due to high speed processing of large amounts of data, you are always way ahead of others. Historical and real-time data with "quantum" resolution. Baixo custo. Algovisor is an affordable solution . Great user support. Online help, educational materials, courses and webinars. Simplicidade. Algovisor is easy to use. No need to study hard.

Instrumentos

Quant Chart - innovative visualization of full order flow allowing you to detect algorithms and view maximum market depth.

It is the most up-to-date solution to visualize exchange order flow. You will see all algorithms, including: Slicers/Dripping Orders, FOK/FAK, L, Massive Limits, Implied orders, all iceberg types, POV, hidden accumulations, stop orders, big market orders, DOM shift.

We say No to aggregation! All massive orders are now available from bird's eye view, regardless of whether they have been sliced by an algorithm or exchange core. Quant Chart uses exclusive detection technologies to compare and restore original data. For this reason, you do not need to use discrete aggregation anymore.

Quant Chart has two working modes: Quant visualization of all events coming from data feed provider and exclusive visualization of trades that takes into account trade size.

Quote Run - advanced classical tape visualization with ample opportunities.

Does not distort data. Only clear trade flow coming from data feed provider. You see data the way exchange provides it, with 100% accuracy. When using data flow comparison functionality, trade size is restored up to initial size as of "before matching" moment. You can see pure cumulative Globex volume, accumulated as of current time. You can customize the tape to view buy/sell trades only. Automatically determine implied transactions, algorithms, composite orders and spread trades. Filtering trades restored by trade size, color alerts for various tape events. You can view 2 types of tape – classic tape and full engineer tape combined with DOM events.

Quote Mapper - luidity/trading accounts density map. This is the best ever visualization for any scalper. It allows you to see real-time market picture.

Quote Mapper has two modes:

Monochrome mode Heat map synchronized with trades and combined with graphic visualization of luidity/accounts density.

Vantagens

Various meaningless analysis instruments which create an illusion of improving your trading. No matter how many footprint types you are using, if you are getting partial/corrupt data, chances are you are not going to achieve positive results in trading. Data discretization, interpretation and matching. Those data transformations mar the data, which cannot be used in analysis anymore. We do not confuse you with various market concepts, profiles, different time frames. We are do not give you nice but useless indicators. Rather, we give you a real chance to see for yourself how deep the rabbit's hole is ☺

Due to Algovisor, you can use signature analysis of algorithms. That is a new trend in technical analysis, allowing you to detect various algorithms including HFT by studying their "footprints" – signatures.

All solutions and technologies utilized by Algovisor are based on the trading experience of funded traders. We do mean it when we say, "Created by traders". That is why we are creating instruments that are of real use for real trading. Here is what makes us different from the great variety of other trading tools developers. They are happy to provide lots of useless indicators and modules to go with their tool - and then try to persuade you why it is impossible to survive without that specific tool.

Giving a try to Algovisor, you are starting a journey into a hidden world of microanalysis. In the end of this journey, you will get rid of all fantasies and illusions about technical side of trading.

The veil of secrecy is down! Now you can see every market's dimension clearly!

Reading Order Flow with Price Action.

Price Action as many traders know it is what price is doing and how it is behaving on a chart. For many traders they flick on their charts and will see candles moving up and down.

A deeper look into price action shows us that what they are actually watching when they watch the candles move up or down is the market order flow that is taking place.

Price Action is the direct result of what has happened with order flow. In other words what the big guys are doing can be seen directly through price action on our charts. It is said that “price action is the foot print to the money” and this is true because through the price action on our charts (the foot prints) we can see what the market order flow is and more importantly where it is likely to lead.

Price Action and Indicators.

All indicators including the commonly used indicators such as moving averages and Bollinger bands are built using the information that price gives us. It is also true that all indicators will lag due to the fact that they first have to process what old price has done before trying to predict the future.

The reason price action trading is so successful and used by most professional traders is because you are reading the order flow from the market as it is continually printed onto your chart in real time.

Obviously being able to assess the market in real time with the use of price action is a lot more useful than looking to indicators which are lagging behind.

How Can We Use Price Action Order Flow?

Order flow is being printed on your charts every second the market it is open. You can simply look at any chart to see price moving up or down to see what the market is doing.

Being able to use this information and to trade with it profitability is the next step in the process.

The reason a few key patterns in the market can be very profitable time after time is because they are showing key signs of market order flow and market dynamics .

One very simple example is the Pin Bar.

Reversão de barra de pinos.

The Pin Bar is a very simple one candle pattern that is especially good at changing the market direction and creating a reversal.

To read about the basics of the Pin Bar please read this article: The Pin Bar.

The nose of the Pin Bar is telling a lie and setting a trap that will stop out many traders. To understand why the Pin Bar is successful we must look at the order flow behind the pattern to understand how we can do the trapping and not become the trapped.

As the Pin Bar is being formed many traders are trading and looking for a break out trade. They are entering in the direction of the Pin Bar nose and looking for price to continue. For the Pin Bar to be created one of two things needs to happen;

The buyers/sellers must come in with more pressure to reverse the price or, Traders begin taking profit which leads to price reversing.

The two charts below explain how the Pin Bar is created with order flow. In the example below we have a bullish Pin Bar. Originally traders would have been short looking for a breakout lower. Chart one show’s how price would have looked as price was breaking out. People were selling and looking for price to continue moving lower.

At some point traders either started taking profit or a fresh wave of buyers came in that pushed price higher. Chart two shows the Pin Bar which has now been created after this fresh push higher.

For the Pin Bar to work and be a successful trade price must move higher to complete the trap. It is here that a lot of stops will give fuel to help price bounce higher.

All the traders who traded for the breakout have been successfully trapped. The breakout traders will have a lot of their stops above the Pin Bar high hoping price does not break higher as they will be stopped out and effectively trapped. It is for this very reason that the Pin Bar will get its next push higher due to stopping out the break out traders. See the chart below for a detailed look;

A clean price action chart below shows how this works on a real chart. This chart highlights how the Pin Bar is formed and then how it takes out the stops to move higher.

The reason a few key price action signals work time after time and repeat themselves, is because they are showing traders the signals of order flow and tipping them off to where orders sit in the market. The traders who trade these patterns can learn to make sure they are on the correct side of the order flow, and not being trapped by the big guys.

In the Forex Price Action course you are taught the key price action patterns that indicate market order flow. You will learn the patterns that repeat themselves, and also how you can best position yourself to take advantage of them.

I hope you have enjoyed this article.

Safe trading all the success,

Johnathon Fox.

Johnathon Fox é um trader profissional de Forex e Futuros que também atua como mentor e coach de milhares de comerciantes aspirantes de países de todo o mundo. A Johnathon é especializada em ajudar traders a transformar suas negociações com métodos de negociação de ação de alta probabilidade e estratégias corretas de gerenciamento de dinheiro.

MAIS ESTRATÉGIAS DE NEGOCIAÇÃO.

Doente de ficar falsificado fora de seus comercios de Forex?

Você frequentemente se esquiva do mercado ou entra em uma negociação apenas para vê-lo rapidamente se encaixar no outro? # X02026;

Como você pode negociar a estratégia "Trigger" de "Combo".

A "estratégia de combinação" é uma estratégia altamente eficaz em que o preço forma um sinal de acionamento de reversão e segue imediatamente "##02026;

Qual é o seu trabalho como comerciante de ação de preço? Você já se perguntou ou pensou sobre isso? Ou você acabou de obter & # x02026;

Use o Exercício Coin Flip para ganhar vantagem sobre os outros comerciantes.

Como você ganha dinheiro negociando Forex? Qual é o mesmo princípio básico se você está vendendo maçãs, óleo ou & # x02026;