Friday, 31 July 2015

Intra Day Volatility Equals opportunity

Intra-day volatility in the stock indices is very high. Lots of action. Although increased volatility can be more difficult, what I do is to ficus on outside in trades - fade the fast moves. This gives lots of trades every session.

The downside of this approach is that when the market goes into trend day mode - and it can switch part way during a session - I need to only fade the moves opposite to the trend, trading only those that pullback enough. Trading shallow pullbacks means it takes longer to discover I am wrong - bigger risk and the balance between risk and reward may not meet my standards.

Tuesday, 21 July 2015

Summertime

Gershwin's "Summertime" is a great song. This recording by Billie Holiday is a wonderful example.

Summertime is well and truly here but it brings lots of opportunities. One thing that happens when the markets gets quieter is that I may have to reduce the size of the bars I trade and make my entries more aggressive. I just get the trade on ad then decide whether I want to keep it or not. Trade location is even more important than usual when its quieter. Having a good trade location means that I can usually scratch a trade if I think I'm wrong.


Monday, 13 July 2015

My eBook is Here!

Today I posted my eBook: Trading Order Flow in a Market Profile Context. You can start reading the eBook by clicking the tab: The eBook at the top of this page.

I will also be posting recorded live trades using my methodology and charts starting soon. I'll Tweet when these are posted to the ElectronicLocal YouTube channel.


Monday, 22 June 2015

Sell that Resistance - ES

Its groundhog day most days in the markets. I have my trading pictures and when they appear in the live markets and are confirmed by order flow I just have to pull the trigger. Selling that blue line resistance was revealed by MP. There was a double resistance here - the blue line and the VAH of that distribution. It was the order flow that showed me which one to sell.


 I'm just finishing tidying up all the typos in the book so if you want to follow my methodology you will have a roadmap.

Wednesday, 17 June 2015

The Book

The book will be posted to the blog by the end of the month - June 2015. And it is free. Look for a tab at the top - BOOK. I am still having some Amazon issues but it will be published there as soon as those issues are resolved. The upside to having the book in the blog is that you can ask questions and also translate it into other languages.

The chart below is today's ES. Very typical use of my methodology. You can see that the MPs have been split and the resulting resistance revealed. The arrow shows the sell short point based on that resistance and triggered by the order flow - top of zipper and VAL of distribution.

There are trades like this in most markets and the techniques I have been using well before this blog started are still working well. Adding the raw order flow component has just made them better.


Thursday, 28 May 2015

Context and Order Flow

There is a great misunderstanding about order flow and context. I see this from both emails and people I am mentoring. This misunderstanding can be corrected by looking at markets in a different way.

I have repeatedly espoused that CONTEXT RULES. I have also said that order flow needs to be read in context. For example, strong buying can be initiative action that will continue or it can be stops being hit at the end of an up move. To distinguish between the two, I need to see the context. Context is made up of Market Profile and indicators that tell me where I am in context. Indicators no longer trigger trades. Order flow triggers trades. Indicators tell me trend and its strength, where the mean is and how far I am from that mean.

An analogy to this is tennis. We have a tennis court with a net and lines. That is our context. As a player we watch where our opponent hits the ball in that context and how hard. We look at where he hits it from.

I draw your attention to the lows of the open on 5/22/2015. The previous day's Profile was split to reveal the VAL support that held on the open. Then look across to the order flow chart. The price bounced off the support on the open and then pulled back to provide the entry opportunity. From there it was just profit.



Wednesday, 13 May 2015

Splitting

The correct splitting of the Profile showed this resistance. It was not visible before the split. I know there are lots of support and resistance areas on a chart so which one will "work". That's an easy question to answer: "the one where the order flow reverses".

Support and resistance areas are decision points. Order flow makes the decision.