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Just meant that its an arbitrary construct and meant to dumb down the study of orderflow to appeal beyond the niche cross section of traders. It can be useful if measured from a significant pivot point or rotation. Just measuring from one edge of the chart to the next has little value.
it depends on what trader u are and which road/journey u went thru in becoming that trader , to know what style
of trading u suits u and what tools are best used for that purpose...
but how do you know if this or that tool .. is the right choice for you ? if u just start out ?
so why not start at the core ! .. wich is The tape and or the DOM ?
if u see how the markets work in its inner core .. and understand the mechanics behind it ,u then have the chance
to say this or that style suits me.. and for this and that i need this tool ,, or that ..
If u trade on the DOM u can limit your time u dont have to be infront of it for manny hours... how about only 2
at the open ? or the last hour ? .. again what suits u.. best
then u can set some reverence points ( not getting lost) .. like VPOC .. support / resistance daily high/Low.. swing
highs/Lows .. etc.. and watch how price trades torwards and acts at those levels to make a trade decision .. only
for a couple of ticks .. and your done for the day .. etc...
yess it gets stressfull and exhausting if ya dont have a great WorkLife Balance
i dont do it anymore... but that knowledege i gathered while scalping purely on the DOM .. is priceless...
and i dont regeret it...
U wont belive how fast time flys by , if ya "trading in the zone" ie. on peak performance watching the DOM
and i traded only for couple of ticks .. not swing trading... ie. kept me busy
a quick ramp up on a typical DOM session
just focused on buying and selling pressure , path of least resistance.. Levels of interrest .. and thats it...
ie.
Simply observing the DOM , get a feel for the market or get nsync.
Watch what the market wants (path of least resistance)
Selling or buying pressure (wich is dominant)
Watch important levels and how price moves there and how it reacts( ydh,ydc,ydl,s/r,swl,swh,high vol areas low vol areas , recent heavy activity)
Get in , if market reacts in the favour of my position let it run till momentum dries up
Else get out dont be exposed to the market for to long , either take loss or BE
Watch out for games played ! Only trade the obvious !
Didn't see this question asked unless I missed it but what instruments does OFA work with? Your faq's refer to the website for the answer but I didn't find it anywhere. Thx.
On Tuesday, February 26th @ 12:00 PM ET we'll hold a casual meeting with D.B. Vaello and Order Flow Analytics. The purpose of this meeting is to answer any questions from members.
We hear much talk of needing to follow the large size institutions (despite some obviously losing like the majority), so lets call the winning guys 'smart money' for these questions. Everything relates to the ES market.
Q1. What are the most common footprints in the order flow that smart money leave for us to follow?
Q2. How does your OFA logic method identify these footprints? Can it be done, albeit with much difficulty(?), using standard 'tape reading' tools like the T&S, DOM, and such?
Q3. How do we differentiate between smart money and dumb institutional money at work?
Q4. How do we handle HFT/other big guys action that flips aggressively between bid and offer heavy limit orders being placed and pulled (within seconds often)? Or do we just not trade at this time, despite practice getting very common?
Q5. Have you compiled a list of typical 'games' that smart money plays to take others' money? If so, are these built into your OFA logic? Would you share same games list for others to comment on?
Thanks for your time. Look forward to your Q&A and future webinar.
Thanks for the question - and I consider anyone in the space to be a compliment - not a competitor. I've been doing this for a pretty good while and I do see the interest level growing from the retail side but my assumption is that's just buzz and hype. It takes so much work to really be a trader - and most people getting into trading just aren't willing to accept that fact... So they look for whatever is new and being talked about. On the other hand, we've seen a massive transition from retail to professional interest over the last 12-18 months. They are finding value in the logic when applied to more traditional systematic approaches. That's something the retail guy will always struggle with.
So in short, I'd say for the average new retail trader everything is a fad because most will take 3 stops and quit or buy something else. For the professional trader there's an always expanding toolbox to work with. They only adopt new practices when time tests the value. For many that time is now.
We should talk and see how we can work together to bring more value to the field.
DB
If you have any questions about the products or services provided by Order Flow Analytics, please send me a Private Message or use the BMT " Ask Me Anything" thread.
Rithmic provides more depth than most are used to seeing - I'm sure they're not alone in that.
I think every instrument poses it's own unique challenges. I originally developed OFA for the ES only... That was before 07 when the market was trading a little different (anyone remember pre-QE action?) Actually the ES used to trade a lot like the 6E does now. It was ideal for that type of fluidity. I've converted a lot of my trading to the 6E and 6B because of the thick pig the ES has become. I honestly can't speak to bonds as I've never understood the competition there but we do have bond/note traders that love to utilize OFA. Part of that is because the logic we teach - it's pretty simple and follows a constant stream. With 4 individual tools, you may only find 1-2 that you feel can logically be applied to the market you're trading... For example I know that our CL traders see little value in the Stop-Run analysis and rely mostly on cluster sequences (Volume Cluster Analysis) and finding historical momentum points in the print.
I'll PM you and maybe we can talk through it with some examples.
DB
If you have any questions about the products or services provided by Order Flow Analytics, please send me a Private Message or use the BMT " Ask Me Anything" thread.