Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Plotting time and sales on a chart in rows and columns is just that - glorified time and sales - particularly if you have no idea what the data represents or how to use it. Sounds like you do so that's great.
I'm in agreement with you on market depth - I think there is little to be gained for the work that is put into it. Any claimed edge is subtle and should be treated as such.
Price action - check Order Flow - sort of. I'd say it's what happens in order to result in price action.
Again - it relates back to having a process to make sense of the data and act on it. There are 100 companies that plot glorified time & sales. Most have no strategy for how to use that information.
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.
Can you help answer these questions from other members on NexusFi?
Thanks FalseProphets. My only objective with the software and training is to allow people who can't make sense of the info to understand and apply it logically. I really cannot stare at time & sales in a window and make sense of it. Nor can I gain much insight from endlessly staring at the DOM. But there is underlying logic that can be applied to start to make sense of it when arranged and explained. As stated earlier, CD doesn't make sense to me logically so that is why I dont use it or recommend it.
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.
Sorry about that. The current version allows the user to input any instrument they want - so technically anything. That said, the original design was for futures, not stocks - so it's generally a disaster if you try to input ETFs or similar. There might be a few limitations on instruments with a non-standard scale. We had to do some modifications for notes and bonds - simply because we never planned to make this available to these markets and didn't plan for it.
OFA has about 20 formatted instruments:
ES/NQ/YM/TF
6E/6B/6J/6C/6F/6A
CL/GC/QM/Corn/Wheat
Dax/Bund/FESX
Bonds & Notes
And a custom symbol input 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.
Smart money = the guy who didn't get stopped out. If you think that's limited to the institutions (which clearly you don't) then you're nuts. The best thing you can look for are the signs of accumulation or distribution at a concentration of prices (drawing in substantial trade without substantial price action) and the subsequent unwinding of the losing side being unable to find market depth to unwind into. We look for a pretty specific momentum pattern which is instrument specific - but in the ES we would expect to see sequential clusters of trade followed by a thin print in the target range of stops - let's say 8-10 ticks for the sake of simple conversation - and I'm sure some vendor-hater will blast me for that. But the point here is that you should have regular expectations of where losing volume will unwind - and when it's not met by depth trying to take advantage of the inventory, you will see very clear patterns in the print.
I dont think I'd really be able to identify patterns of volume by reading the time & sales or DOM - which is why I built an application to do it the way I wanted to. There are posts here by others that indicate they know the secret to this magical process. I dont and cant claim that I do.
Start by realizing that your real competition is the retail trader - not the institutions. The retail trader is generally an under capitalized neurotic consumer of magic numbers. Take his money, it's easy.
I posted earlier about order flow really only providing usable feedback when there is directional movement. If I get into a trade with an expectation of momentum higher - and instead we churn across a small series of prices - I generally unwind my position because the expectation has failed to deliver. Imagine, you go long and price moves 4 ticks up and down for 2 hours... Is there directional movement? Will you get accurate feedback from the data? Would you hold that position? For me the answer is no to all 3. I try to limit my "reading of order flow" to specific criteria defined by my tactical approach to the chart that day. I'd lose my mind if all I did was watch volume prints all day. Probably not the answer you are looking for but at some point you have to agree that when a trade is not doing what you expected you need to go back to the drawing board rather than hope for it to work out.
I would say the most common is just a very simple stop-run at ridiculously obvious places on the chart. People like to buy old lows and sell old highs - or buy/sell off trendlines, etc. And typical momentum traders like to bracket the same areas. They get beat up a lot and you can see it happening when you organize the data - but then again, I think a good trader can see this happening with a basic OHLC chart.
Hope that was helpful and gave my critics some good ammo - I hear it's in short supply these days!
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.
We are not using any library. We have our own graphics and drawing code.
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.
Sorry I was going to PM you earlier when I replied to the first batch but then the Euro started producing and I forgot about your other post...
Totally depends on the client. We obviously teach them not to have their stops where we expect the bulk of stops to be triggered in directional moves. Outside of that I don't address how a small lot trader should try to hide his stops somewhere in the market depth. They have enough to worry about just managing a position. The stop is the price that invalidates your initial premise for taking the position. It might be modified slightly from the positioning of other nearby trade - but the song remains the same in the end.
Simply put, huh? I don't buy the premise so I don't hide my stops or worry about the things you're asking about. I put on the trade, manage it and then put on another. Maybe this is more relevant in thin markets? It could be I'm just ignorant on the subject.
I don't think our conclusions really are derived from the same premise... Order flow or print reading or whatever you want to call it is really not that hard or complex. Like anything it just needs some explanation of what to look for and then practice implementing it with a simple strategy.
Which can be analyzed instantly?
1. place order
2. pull order
3. exit position
4. maintain position
5. add on to position
6. stay flat
7. go play golf / seek medical attention
I'm probably missing a bunch here but isn't that exactly what trading tools are supposed to assist you with? If they don't then throw them away.
We teach traders how to focus on the historical print, the current print and to have realistic expectations about the future based on what evolves in the print (History/Current/Future) all in equal balance when possible. With the historical you can find inflection points or invalidate areas that you'd think would have been important but weren't - and therefore shouldn't be part of your future analysis (note to Mike who hates chart patterns!). You can also learn a lot about what to expect in the future when these events happen. In the current print you can find patterns of momentum or exhaustion (or 2-sided trade) and act on them if they fit into your trading plan.
Will reading the print solve all of your trading woes? Nope. But it's real-time feedback and many of us see the value in that - whether through OFA or any of the numerous other tools that do similar things.
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.
Sure David. Just contact George with the new user's info and he'll transfer it with a small fee - that way the new user is actually in the system and can have access to upgrades, etc. I'd figure all that out before hand so there's no misunderstanding between the parties. Sorry we didn't give you what you needed.
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.
Thanks. What I don't like about C# (I'm guessing?) is that the data visualization tools are rather weak. I saw some of the screenshots on your site and would recommend a graphing library. In the long run, $750-1500~/year is cheap compared to the time it takes to work with low-level, probably less performant/visually appealing/stable code. Back offices of .NET shops like GMO, JPM all use some kind of commercial library.