The Key to Seeing Orderflow

7 Comments

1. I love these deeper metagame orderflow articles… seeing price action from a whole different perspective! Simply excellent.

   Looking at price order flow sentiment from the perspective of what other traders are thinking and feeling is really one of the best (if not thé best) ways to to trade isn’t it.

   The “who the heck would trade right into this area, or that area” statements are really powerful too. Allows one to see how professionals fish out the amateurs!

   Cheers,

   Keiran

   Reply

   1. Even now Keiran I still get caught up from time to time in trying to “automate” my entries via a rule based approach. But there is never anything I’ve found more powerful than a discretionary / intuitive questioning of “who is trapped?” or “who is wrong?”

      Reply

2. As an illustration for the first chart

   https://www.youtube.com/watch?v=aYjO98PHEM8

   Regards,

   Dima Cha

   Reply

   1. Ha ha! It looks to be right at 10:30, so I would guess he was unaware of a news release?

      Reply

3. Hi Lance,

   What’s your take on using the ladder and real time orderflow? I searched for your articles on the DOM but couldn’t find any (apologise if you have them already somewhere and I simply missed them).

   Do you use them? How do you evaluate their efficacy in terms of fine tuning entry/exit and R2R?

   (I am asking this here since the article pertains to order flow and didn’t know where else to post this. I wanted to keep the question relevant to the topic being discussed.)

   Thanks!
   ~C.

   Reply

   1. Hi C,

      Happy for your to comment here. But if you can’t ever find an article related to the topic, direct email is often easiest.

      The DOM and associated orderflow tools are all valid approaches to market analysis and timing. If you find yourself attracted to the idea, by all means explore them. But don’t fall for the hype that currently exists in that part of the industry. They’re easy to market to new traders who crave “more information” in their search for certainty. Test and evaluate and make a decision as to whether or not they add to or reduce your edge.

      For me, they’re not necessary at all. And in fact provide more of a negative impact.

      In an environment of uncertainty, it’s important to take decisive action when a setup triggers entry. In this situation, “too much information” can be counter-productive in that it increases the likelihood of conflict, doubt and confusion. You can never have enough information. You can never achieve complete certainty. So you hesitate, waiting for “just a little more confirmation”.

      For me, they kept me out of too many otherwise good trades.

      This is just my experience though. Others have found they add to their edge. Test and evaluate and find your own answer.

      What is most important is context. If you study the charts from many of the orderflow examples you see posted, you’ll note that many (maybe most) of those with good outcomes are trading in places of good context (retests of levels, false breakouts, successful breakouts, support turned resistance and vice versa etc). So get that right first. And then compare results in execution with just price action vs orderflow tools. Because I doubt they’ll give you edge if you don’t already have it. Once you’ve got it though, they might add to it. Or not. Test and evaluate.

      Best of luck,
      Lance.

      Reply

      1. Understood. Find my edge in the market first and test and fine tune it later.

         Thanks Lance!

         Reply