Order flow trading

Something I'm currently playing

Here's a combo of the sources/info I use to initiate my positions in the market.

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And a nice momentum step at a key level (o/n high + yesterday's high) with lots of space to move still.

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Let's see how it plays out. Initial target is the 102.00/20 area.
 
Just to get the bearish EUR perspective into play

DAX and BUND didnt move even the slightest post bad IFO data...
that really shows you that market sentiment is very USD bullish, and USD index is near a breakout point... but next week we will have the NFP so USD bullish sentiment should proceed and I can already see that we will have a number that bids USD and stocks and sells off treasuries and then PUFF, stocks will drop, bonds get bid as per usual NFP gap fill and USD sold.

But being long $ into friday would be a good idea.
 
JJayFX said:
Hey Svejed1,

i think you're confusing "retail sentiment" (which is basically an aggregate of what the broker's retail clients are doing) for "market sentiment". I'm not even talking about the COT index here. That's another matter altogether (which is important though).

As I've said in the first post, I read "OrderFlowTrading for Fun and Profit" by Daemon Goldsmith...and I latched onto their site, orderflowtrading.com. It really helped me shift my focus from just price action trading to viewing the market for what it is: an encounter of a great number of different agendas, which create opportunities based on the aggregate perception of the future. That's sentiment in a nutshell: what the market's feeling about the future is, regarding that particular asset. So by keeping in touch with headline news releases, some bank reports, and the current themes in the market, I attempt to understand whether there is a clear focus/thought going through the pipes (like the current euro weakness and USD strength). If there is, I'll try to leg into the flows when possible, using order information and the levels I've been showing all throughout this thread.

Remember that we are competing against other traders which have more experience and capital than us. So trying to overpower the more experienced players is futile. Start thinking about the other participants in the market and how you can exploit their characteristics. Markets are all about fear and greed. As price moves, some participants 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. We should attempt to win against the weak hands in the market. Usually the weak hands are fading every move, treating the markets as if they were consistently in a range. Weak hands sell into demand and buy into supply (for whatever reason). And most importantly, they have no patience. You see all sorts of chatter in forums about short time frame trading...my experience is that the longer term charts offer the better opportunities and are more in sync with the general price drivers. You want to take the high prob opportunities and go with the flow (where there is one).

So I ask myself:

1) What are the key themes in the market currently?
2) What are the main factors driving current sentiment on your currency/future/commodity of choice? You don't have to be an analyst and you certainly don't have to make it complicated. Follow a news feed and/or the twitterverse...Keep it short in form of notes.
3) What is price action telling you as we bump against key levels? As prices moves further, compare it to your sentiment analysis.

Don't just see simple "Support/Resistance levels" ...view them as levels where orders accumulate. Think about what it means for bulls if a key support level holds. Does PA indicate decent demand or are the upmoves quickly running into further selling? What if the level breaks, where does the pain start for the bulls?

This is the type of mindset that has helped me a lot.

Hope it makes sense...
More...

What bank reports do you use?
I get LLoyds report each morning and thats all.
Are there any better ones? Yes that information is indeed useful, LLoyds said this morning that USD should rally bcs of anticipations of good NFP next week.

And that thing about retail is true.
 
svejed1 said:
What bank reports do you use?
I get LLoyds report each morning and thats all.
Are there any better ones? Yes that information is indeed useful, LLoyds said this morning that USD should rally bcs of anticipations of good NFP next week.

And that thing about retail is true.
More...

I like ScotiaBank, Danske Bank, BNP Paribas...Deutsche whenever available...
 
It makes sense, for this trade, to pull my stop up below the recent intraday swing low. Durable goods was better than expected but the market isn't really reacting well. We've already covered the day's average range so if I get stopped out at par, it will only have cost me time.

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Do you see whats happening in USDCAD?

The relentless stop hunt
AUDUSD 0.94
USDCHF 0.9050
USDCAD 1.0810
Are next on line

Seems like algos running the show on no volume.
 
svejed1 said:
Do you see whats happening in USDCAD?

The relentless stop hunt
AUDUSD 0.94
USDCHF 0.9050
USDCAD 1.0810
Are next on line

Seems like algos running the show on no volume.
More...

Uhm...i don't really see stop hunting per se...it's a legit CAD move...CAD being sold across the board on the back of the budget balance and who knows what else. The stops that were in the way helped fuel the rise, sure, but it's a legit move in the context of a rotation (on the major, UsdCad) higher off 1.0630s.

Buy stops have been duly tripped through 1.0800 sending us as high as 1.0820 so far, presently 1.0815. 200 dma looms at 1.0830. Talk of more buy stops through there.
 
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