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)
Can you be profitable day trading futures solely off of charts?
I've read others give advice saying order flow tools are essential to how they trade. I currently don't have access to these tools, so I was wondering if there is anyone here who has found success without them.
The thing to understand about what traders say is "essential" to how they trade is that it is essential for them, for their style or method of trading, and that is has worked for them.
This does not mean that there is nothing else that can work for anyone else. It is simply their experience, which is valuable to know but does not say what your experience would be.
After a number of years of reading posts and trade journals on future.io, I can say that every single thing imaginable has been tried, and several things that I would have said were not imaginable.
A surprising number have worked, in the hands of a skilled practitioner. But not without time and effort. I have no real idea how order flow trading works (I have tried, but never quite got it), but I know that many traders do very well with it.... with time and effort. As with anything.
Take something that appeals to you and that you understand, and pound on it -- preferably in live trading, but in simulation if you must -- and see how it works, for you.
By the way, it is possible to try just about anything. Many brokers offer free trials (limited in time, of course). I know that at least Sierra Chart software (which has order flow tools) offers a delayed data feed with a small monthly subscription for the platform (and a free trial before you have to pay anything), and which allows sim trading.... possibly others do as well. Experiment. There is a lot out there. You can find whatever you are looking for.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I really don't know if there is anyone here successful with or without order flow tools but I do know Marty Schwartz, Ed Seykota, Michael Marcus and many others with Commodities Corporation were (extremely) successful without order flow tools.
I had a friend who's career in trading lasted 2 years, turned 4k to 240k, and he had no order flow tools, no understanding of the mechanics of markets, nothing. All he did was short when support would break and go long on breakouts. He literally knew nothing, except he knew to let winners run (at least half run, take half off).
He only quit due to the stress of how he was trading. He was at like $240k and lost about $60 at that high point and threw in the towel forever, lol. Kinda a good idea considering it was some form of getting really lucky but also slightly informed as far as using stops and filtering for the right trades.
He loved indicators, LOL... I really wish I was lying!
I was about to post about this, I'm leaning towards thinking that without the DOM you can't be profitable in the long run especially because you'll take too many losses since scratching is much more efficient on the dom than on the chart, even the footprint chart.
Well his Sharpe ratio was horrendous it seems, good for him that he quit, if he stayed trading he would have lost his profits eventually I think.
There are so many different strategies, that no tool can be deemed "essential to trading and can't be done without".
For each strategy there are the right tools.
I imagine any strategy you may have learned from someone, which didn't include this tool, could well be valid. However if you take a strategy that DOES use this tool and try to do without it because you don't have access, you may be seriously handicapping it relative to its original performance and it may very likely fail.
Ask yourself: Do I understand how this tool is integrated in this particular strategy? Why it is used and in what context? What is its "role" in the strategy?
These questions are essential to any tool in any strategy.
As Bob said, there is nothing that is really essential, In my modest opinion orderflow is really overrated.
When I started trading I took two courses with "noBSdaytrading" (can't even remember the name of the guy) and I watched many videos from Jigsaw. I made some money here and there but I had the feeling that I was taking pennies and leaving thousands of dollars on the table. I don't think that scalping or any other techniques are not viable, and I don't think that the course was bad but there was something that bothered me a lot: basically the teacher was always reinforcing that real traders use the DOM. He started by displaying pictures of some prop firms whose screens where full of DOMs. Basically, on his opinion, if you trade you must use the orderflow.
Well if somebody tells me that there is just one way to make money, I run!! (and I did)
In the past I used orderflow extensively. I did not pay hundreds of dollars to Jigsaw I just customized Sierrachart to show me exactly the same for 20USD per month.
I used the following:
1) dom with different columns for new orders adding to bid/ask, columns for bid and ask, column for orders hitting the bid/ask and the latest market order.... (everything you can imagine, and more since I am quite comfortable with Sierra I could implement basically anything)
2) I used the numbers bars
3) I used the cumulative delta etc...
conclusion in my opinion there is no added value to these tools. Let me make it clear, if these tools give you an edge, good for you, but if you think that "you either use this stuff or you cannot trade", forget it!! you can trade with candles only, if you understand the market.
Nowadays I removed orderflow (which makes datafeed also a lot cheaper).
The "scalping on the dom" style of trading for me it's dead. There is no added value on watching the DOM because it's a mechanical type of trade, and robots can do it better than you and me.
What do you really wanna see on the dom? Do you want to see a big order resting on the bid or ask column and people getting scared of the big order? or maybe the contrary, traders hitting market orders "although" there is a big order? so you think that these are strong buyer/sellers because the big order does not scare them?
Is this what you want to see? well this is a trick that everyone knows.
Do you want to see how easy the orderflow is manipulated? give a look at micros you will see very often orders of 200 contracts above and below market price making sort of bracket and then disappear and reappear!! you will see this hundreds of time a day.
When I used orderflow I could scalp 200 USD per /ES contract now this is my stoploss and I want to make at least 1000 usd per contract. I want to make a strategic move, I want my trade to have the complexity of a chess move.
I removed the orderflow because I don't want the fake certainty of the ladder, I want to truly embrace risk and uncertainty knowing that if I am right I make a killing and the orderflow traders will have to bail from there positions.... and that I will be on the oder side.
off charts ? making money ? yes ...but it depends if you have a verified edge ...what can be attained from charts...tick count, price, volume, time and derviative therof with multiple combinations ...and then there are observation from the tools one creates in realtion to these variable...then there is function of funtions and so on...alas some are stuck in the darker ages...
I do have Block order spotter and Iceberg order detector indicators and a 'system' to trade with those. But, since I rely more on price action on the charts itself, I don't use them on day to day basis.
Trading off only from charts depends how you do when your edge shows up. I will give you an example:
My strategy is to make a few points and be done whenever I see my strategy on the charts. But here's a catch. Sometimes when I enter a trade, the profit target gets hit within a max of few minutes. The other times, it will go against me significantly (I know where to exit) and THEN go in my direction to give me my target.
In those cases, did my trade work? Yes. But you see there can be moments of intense heat too sometimes.
This is what you have to understand and remember forever. It can work and it may not. These are all probabilities.
Tl;Dr: Yes trading based only on charts can work, but it all depends how you have found your edge to be working good or not.
