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AFAIK OFA bars has nothing to do with volume. It is a 4 ticks reversal chart, where the direction of the bar is determined only after you get a 7 ticks range (called "probe"), and then 4 ticks reversal.
Say bar opens at 1234.25 goes up to 1235.75, thats a 6 ticks range, so no direction determined yet, next price goes down to 1234, now you got a 7 ticks range, the 7th tick was down, so now a 4 ticks up move will open a new bar.
Cant say it is better than the regular 4 or 6 ticks reversal bars, sometimes it is sometimes not.
And yes, getting 1-2 tick stop loss average is perfectly doable, especially with the tracker. YOu also have to undersatnd that break even trades happen.
The actual raw stop loss is 3-4 ticks away but the tracker takes the trade out a lot sooner than the hard stop.
And no, i don't use market orders and yes, it is possible to get to the exact tick at times.
BTW, your scenario with the DOM is overly simplistic.
You're assuming that there is 25 contracts on the ASK/BID and that's that. You're not accounting for additional market depth colming in (new orders hittin the same price). To me, orderflow trading is about where potential market depth occurs, it's NOT just reading bid/ask volume - that's TRADE FLOW, not ORDER FLOW. You're looking at prices that has already occured.
Perfect example - on the ES, the limit/ask is often 300-400 contracts, and yet, we see 2000-3000-4000 printed all the time and the price doesn't move. Why? Additional market depth.
Like wise, you'll see DOM showing 2000-3000 contracts and as soon as it ticks up there, those contracts dissappear because market makers are paid to place those orders in, they really have no intention of being filled. Reading the dom like that isn't all that helpful.
No one is forcing you to buy OFA or use free tools if you think you can replicate it. I'm just sharing my experience here. As far as the tracker result goes - the one i was using has a really really tight settings (and as I said, the average gain is only 3 ticks because it's aggressive enough that any shift in the volume automatically takes out the trade. Put it this way - if there is a vaccum (less market depth), prices will trade and move, agreed? So as soon as hits market depth or bid volume shifting, it'll take it out of the trade if it's long. Because the setting is so tight that as soon as the prices rise/fall due to lack of market depth and assoon as it hits a slight wall of resistance, it will take it out of the trade.
And if you think you can't trade with a say, 2 tick stop on the ES, you're just wrong. Just read the chart and find where the ranges are, how many times do you see it creep out 1-3 ticks beyond the range beofore it reverses? ALL the time. Now, if you're trading in the middle of the churn, yeah, you'll get burned - and taht's where GOMI, etc. will also show the biggest volume. That's NOT where i'd want to be, especially in the recent weeks since January when ES has been in a major churn, 4-6 point range days.
And this is why most people who uses orderflow type of tools or volume tools don't get it - it's not just "buying at the biggest ask volume". Wish it was that easy.
You're exactly right. My hard stop is actually bigger. But, he's also wrong in assuming that just becauase you buy at 1234.00 with 100 contracts there, that as soon as you get 101 contracts, it'll down tick. He's assuming no one will will put in new orders. Orderflow is about trading where potential market depth occurs. In means, ADDITIONAL volume should come in and for the most part, I can actuall live with a 3 tick stop loss without using the tracker. The tracker is simply icing on the cake.
And what you describe is what the tracker does. It takes you out of the trade when it sees volume shifts against you but also has the same issue when you hit a wall of volume when you're profitable, it will take you out. So, tighter the setting, tighter your target/profit is.
I just find in open forums like Big Mike's people have the wrong assumptions on whatever they want to discuss. They all think that everyone is wrong and they're right, but yet, 90% of traders lose money and most are undercapitalized.
Maybe Dionysus will now argue that you can't take a 2-3 tick stop on the ES either lol. Like I said, my hard stop is more often than not, 3 ticks, and some trades, 2 ticks. Just look at the ES and see how often momentum traders get completely TRAPPED and CREAMED by buying on some range breakout, only to see the prices pop 1-4 ticks and reverse back into the range. The FUN one are the ones that goes up about 8-10 ticks on a break out, only to fall all the way through the range. Those are fun, because they generate massive retail trader stop runs, trapping both the long and the short. (i..e. momenum traders who bought 1 point beyond the range, see it hit 1 point above them and PROMPTLY drove down below the range, taking out their stops 7-8 ticks away. Meanwhile, people who shorted at previous high got stopped out at 7-8 ticks above it and only to see their original direction is correct.
And yes, every now and then I don't get my order filled on an entry while if i was using a market order, i probably could get filled. But that's trading. I typically try to limit the number of trades, if i can, down to 2-3 on the ES per day. And sometimes, the tracker can get really aggressive and take me out of a trade at -1, -2, or break even and only to see the trade goes up 7-8 ticks. Sure, that happens. Nothing is absolute in trading. People who are looking at some magical indicator and stop run lines, free indicators, etc. to work are going to be sorely dissappointed. You have to last long enough and you have to learn what you're doing.
To me, trading is a business and I don't see any business that you can be successful in with a $5000 investment. Most retail business out there requires a capital of $50-100k, minimum (restaurant, whatever). Trading is no different and most businesses fail in 5 years also. Not sure why people are so jaded to question others' motives It's funny how it works. Then again, most people don't own their own business (i do, trading is not the main income) and so most people don't understands how easy it is to fail running your own business.
So yes, there will always be people questioning $10,000 or $5000 for OFA depending on the training, etc. All I can say is that the value is definitely there, and whether you believe it or not is up to you.
I use order flow. I trade. I make a profit. I don't use OFA. I have seen what they have, I have spoken to George. I think it looks OK. As a vendor in a related field, it doesn't actually clash with what I have. I think they are cool guys.
On the other hand, I think your claims of having an average loss of 1 point is an insult to the readership of futures.io (formerly BMT). Just my opinion.
My example was simplistic. Still - the fact is, you can't trade with a stop equal to the spread. It has nothing to do with depth, it just requires you to be right to a degree that is impossible. Once you get that, then of course averaging a 1 tick stop is also a ludicrous proposition.
I can tell you at times when price will move up. I sure CANNOT tell you that it will move up before Joe retail puts in a market sell order. Hence you can't have a 1 point stop.
It's best to ignore this. I sometimes see silly comments on trading sites and I can't help to point out the silliness. Now you are saying sometimes it's 2 ticks. Well - you trade the ES like that day in day out, your hit rate will be in the low 30%s...
Treasuries - sure, the ES - it's not feasible with the way it moves. Not with all the magic bullets in the world.
This whole 1 point stop thing is ludicrous, OK? It's not worth telling people they can have a 1 point stop. It certainly does nothing for OFA to have people saying it's a magic bullet.