Let's cut the BS, no-one here has a magic system

[meanreversion]

Ok thanks ... any links on trading FX or commodities using orderflow?

 

[wallstreetwarrior87]

Fair enough, I'm always open to learning new things, maybe you can explain to us a little more on this thread about trading using orderflow, or is there another thread already dedicated to this?

Being open is the only way to learn. No one has all the answers and never will. But it is not wise to talk in terms of "matter of fact" as this will cloud judgement.

Orderflow = the flow of orders.

This can be represented as however you choose. The art is disecting the flow to be able to come to a conclusiona as to the current state of play.

If the terms are then favorable, and fit into your understanding of what is going on, you take the trade.

If we dont understand, then no trade!

No need to complicate matters more than this.

 

[scose-no-doubt]

or more thorough data.
farmers and grain elevators know more than the retail trader will ever know about their crop harvest.

Peter

But they only operate in their own markets for trade purposes not across the board. Oil in 2008 is an example imo.
Hella money splish-sploshing about out there with no home to call it's own and that's where the opp is imo. Well that and opps presented by institution hedging and associated fin maths type trading and portfolio activity that cause interest in expiries, roll overs, option barriers etc.

Still no idea how the f**k you trade any of this though hence my sh1tty TA losses.

 

[meanreversion]

Where do I get orderflow data for, e.g., EUR/USD or gold?

 

[FX Bandit]

Meanreversion, just because you cant see the information infront of you does NOT mean it is not there.

Your edge is not limitied; infact you are so far wrong it is scary. Big institutions, hedge funds etc, they are the ones who are limited. In what sense you may ask, well work that out for yourself.

Very good post.

You don't mean to say that there might be an advantage to being small and nimble rather than large and ponderous do you?

The information is indeed in front of all us and as you say there are different ways to view it.

Orderflow is everything - in fact it's all that markets are.

 

[FX Bandit]

Where do I get orderflow data for, e.g., EUR/USD or gold?

It's in your chart.

 

[wallstreetwarrior87]

It's in your chart.

Precisely, it doesnt come in a gift wrapped box. You have to work it out for yourself. But it's there for everyone to see. You don't need inside information to be able to view what the whole world can see.

 

[meanreversion]

Ok, forgive me as I'm still none the wiser. Is it something along the lines of observing that price has repeatedly bounced off a certain level, and surmising there is a large bid there or just below?

 

[meanreversion]

I mean, I accept it's not gift-wrapped but help me out a little!! haha

 

[scose-no-doubt]

Ok, forgive me as I'm still none the wiser. Is it something along the lines of observing that price has repeatedly bounced off a certain level, and surmising there is a large bid there or just below?

or some derivatives nonsense that likes that level :S

 

[wallstreetwarrior87]

Orderflow is the data you have infront of you, be it a chart, T&S data, the orderbook.

It exists in a pure form that is then reprersented in an abstract display (the way you view your chosen markets).

Interpretation is everything, no books exist (to my knowledge) that explain orderflow, apart from the obvious.

I am not a fan of TA, but at the same time dont knock anyone who uses it. But it is limiting as I have pointed out on another thread.

Also not everyone wants to understand the markets, and that is fine, each to their own.

 

[FX Bandit]

I mean, I accept it's not gift-wrapped but help me out a little!! haha

Honestly, there is not a straightforward answer (in my opinion) or perhaps I should say that there are different ways of approaching this. It comes down to study, practice and experience.

Just as an example, watching the YM today, I was able to call 3 significant changes of direction from looking at how my chart was forming. This didn't help me as such because I would not yet have sufficient confidence in my ability to trade in this way successfully.

Had I traded them, one would have closed for a reasonable profit, one break-even, and one is still going and nearing its target, so at worst case another break-even. This is simply due to how I would manage my trades.

This where I think people stall. They find a method of some sort but do not take the time to develop their own skills. I would call myself a discretionary trader, but I am not really because I am still very much bound by the rules of my method. I am profitable but to take the next step, to become truly discretionary (in that I enter based on my interpretation of what I expect the market to do, and not because enough of the requirements of my method have been satisfied) will be the hardest part of the journey so far. It will take a lot of testing and thought, and there will be even fewer "absolutes" than before.

Now, I will still be using the things that I have learned, and this includes areas of significance such as support and resistance, certain types of bar and so on. This approach works, and I know it works, because it is growing my account. People have many legitimate criticisms of this type of approach, which I understand. But what they fail to apprceiate is that this is just a step along the way, which can lead one closer to a true understanding of how the market is working. This in my opinion comes from applying what one has learned and watching the market as it forms.

Don't forget that your chart is just a picture - a picture of past transactions. The picture is useful, because most of us can process images more easily than numbers, but there is no reason why a trader with the right mental aptitude and a lot of experience needs a chart at all.

As an exercise, try doing this. Pick whatever your preferred intraday timeframe is, and watch how the market moves. Now open up an X tick chart and watch it in conjunction at busy periods. The number of ticks will vary according to market and so on, but the aim is to see a different perspective on the action, to get "inside" the bars that you see forming on your regular TF (a tick chart is much better for this than simply dropping down to the 5 minute or whatever, it is a very different animal in my view, although the fundamental principles are the same).

I think that the only thing that can give you what you want is experience watching the market, and experimentation, as everyone will have a different approach. Once you have this, you can begin testing your ideas, informally at first (as I was doing today) and then as a formal forward-testing exercise as your ideas become refined. This will give you the necessary confidence to eventually trade your ideas.

As I say, I am at the "trading method profitably, informally testing true discretion" stage.

There are no secrets or inside information that you need to know, everything you need is on your chart. The best way to demonstrate this to yourself is to put the hours in watching how price moves.

EDIT:

The third trade would just have hit its target (10800).

 

[FX Bandit]

The other benefit of this is that there are no "slow" days. Today was slow in terms of the fact that there have not been any trades, but very useful for learning and developing my skills along the lines that I have planned.

This can be helpful because a lack of action is a trader's worst enemy (one of them anyway LOL). This way I do not view a day with no trades as a wasted day, as many do.

 

[robster970]

Trading IMO, is largely a cognitive skill and like any cognitive skill, the more you observe, practise and feedback, the better you get.

The whole premise of conventional wisdom which tries to make trading entirely formulaic is flawed.

To compare with another cognitive skill, driving:

a) Learning to trade from books is like learning to drive from a highway code or your cars instruction manual. Great reading but you will likely crash your car on the first few outings.

b) Having a static system to trade with is like being taught to turn left only and remain in 1st gear. On some journeys this may be highly effective but on others, totally useless.

c) Listening to people talk about their method and their returns is like listening to somebody talk about how they controlled their car, where they went and how fast they went. In itself it may have interesting points and you may learn something about car control or the journey but it is one journey only and it does not mean you can or should take that journey yourself.

d) People who say they are making oodles without solid experience to me are like people who can drive really fast on the motorway only. They will evetually come off badly as the weather conditions or the road changes if they do not adapt.

As a driver, I like large powerful cars (I'm a petrolhead). I drove in central London for 16 years without incident but much prefer longer more sedate trips as I'm getting on now. However I can go anywhere safely and have probably driven about 500,000 miles in my life. So I would say I'm an pretty experienced motorist with a good record in all conditions. What's more, after 23 years, I still love driving.

My aim is to be the same in trading. I have a long way to go and a lot to learn. I will get there by practising and it will take a long time but the intellectual and financial rewards make it worthwhile for me. The returns are immaterial. What matters to me most is that I love trading and the challenge of understanding the markets.

So 25% or 100%? Who gives a sh1t.

 

[wackypete2]

so the orderflow you can see via your chart is more accurate, more timely, more complete than the orderflow that hedgefunds, banks, and institutional traders get directly from their own clients and traders and it is supposed to give you an edge over them??

Peter

 

[wallstreetwarrior87]

Trading IMO, is largely a cognitive skill and like any cognitive skill, the more you observe, practise and feedback, the better you get.

The whole premise of conventional wisdom which tries to make trading entirely formulaic is flawed.

To compare with another cognitive skill, driving:

a) Learning to trade from books is like learning to drive from a highway code or your cars instruction manual. Great reading but you will likely crash your car on the first few outings.

b) Having a static system to trade with is like being taught to turn left only and remain in 1st gear. On some journeys this may be highly effective but on others, totally useless.

c) Listening to people talk about their method and their returns is like listening to somebody talk about how they controlled their car, where they went and how fast they went. In itself it may have interesting points and you may learn something about car control or the journey but it is one journey only and it does not mean you can or should take that journey yourself.

d) People who say they are making oodles without solid experience to me are like people who can drive really fast on the motorway only. They will evetually come off badly as the weather conditions or the road changes if they do not adapt.

As a driver, I like large powerful cars (I'm a petrolhead). I drove in central London for 16 years without incident but much prefer longer more sedate trips as I'm getting on now. However I can go anywhere safely and have probably driven about 500,000 miles in my life. So I would say I'm an pretty experienced motorist with a good record in all conditions. What's more, after 23 years, I still love driving.

My aim is to be the same in trading. I have a long way to go and a lot to learn. I will get there by practising and it will take a long time but the intellectual and financial rewards make it worthwhile for me. The returns are immaterial. What matters to me most is that I love trading.

So 25% or 100%? Who gives a sh1t.

Whats more, you will have developed skills to be able to recognise in advance that events and accidents are likely to occur from a high probability point of view.

You can read the traffic, or (in trading terms) read the orderflow

 

[wackypete2]

But they only operate in their own markets for trade purposes not across the board.

EXACTLY! You need to know your market rather than try to be a jack-of-all markets, and they know their market(s) better than anyone.

Peter

 

[wallstreetwarrior87]

so the orderflow you can see via your chart is more accurate, more timely, more complete than the orderflow that hedgefunds, banks, and institutional traders get directly from their own clients and traders and it is supposed to give you an edge over them??

Peter

Who's creates the orderflow:?::?::?::?::?::?::?::?:

Now where getting somewhere:idea::idea::idea::idea::idea:

 

[FX Bandit]

so the orderflow you can see via your chart is more accurate, more timely, more complete than the orderflow that hedgefunds, banks, and institutional traders get directly from their own clients and traders and it is supposed to give you an edge over them??

Peter

I think you've missed the point entirely, part of which concerns the practicalities of trading, and the difference between a small trader and a huge institution in the market.

 

[robster970]

Whats more, you will have developed skills to be able to recognise in advance that events and accidents are likely to occur from a high probability point of view.

You can read the traffic, or (in trading terms) read the orderflow

I know - as the psych problems go, the screentime goes up, the gut becomes more prominent. I've started listening to it more recently. Sometimes the psych gets in the way though. Constant battle, constantly improving.