Monday, 8 February 2010

Ah Ha, That's the Way I Like It, I think

KC and the Sunshine Band said it and it applies to my search for how to use the volume and order flow information better in my trading. MarketDelta lets you look inside the bar at the volume traded at each price both on the bid and the ask. I started using MarketDelta for two reasons: It was a toolbox that everything I needed all in the one application, and, it had the Footprint and variations of it. I heard some people were making good use of it but every time I looked at it, it just confused me and took my attention away from what was important.

After a few number of weeks, I came up with a type of Footprint that is like a mini Profile. I have applied it to my regular range bars but it lets me look inside each bar as it is developing a little bit better than just the VB. It adds another piece of information. I look at what is happening at the actual price as it hits support and resistance to see the likelihood of the support or resistance holding. I am trying to be even more aggressive in my entries and get in one bar earlier. It will also help with the outside in trades which we will look at down the road a bit as Kiki gets more settled in her inside out trades. This is how I configured it in MD. I know not everyone is using MD and I don't know yet how much benefit this will really be but we can find out together. Anyway, the posts will only show the candles but you should know that I (not Kiki) am seeing the information from inside the bar. Just for today I have posted both versions FYI.

We are only a few months into Kiki's live trading and she is doing terrifically well. To achieve consistently green weeks in such a short time is very gratifying not just because of her achievement but because of the joint effort we put into this. She doing her part in working very hard and me putting a program together that helped her succeed. We both needed to be right for this to work.

As the next step, we have added an outside in trade to Kiki's trading plan. You can see it as Trade 2 in the attached chart. Her criteria is the 45CCI turns down outside the Keltner and above 200 ish. It must also have volume divergence, that is, a higher high but VB red or lower low but VB green. This setup happens often enough to make it worthwhile watching for and is a very high percentage trade unlike  some of the other outside in trades. The trade works without the VB divergence but its a lower percentage.

Today's trades are below. The morning trades were fairly straight forward, the RTH started with Trade 5 which was a short, leaning on the VAH. After a false start, Trade 6 went and bounced off the POC and back to the horizontal EMAs.

Click to enlarge


  1. EL, great blog. Thank you. With regard to the outside-in setup, when looking for the volume divergence, are you looking for a new day high or a new pivot high?

  2. Hello Captain,

    Thanks for the fish today. And it’s not even Friday. It is not often that we get the fish all filleted, fried and ready to consume. Usually we just get the rod and reel, pointed to the fishing hole, and have to get wet ourselves.

    There was another time that you gave a set up with specifics like that one for an inside out play. I for the life of me could not find it again. To make thing worse, I think you said something like “if you just did this one trade you would do well”. (As long as the context supported it. Could not leave that out, Lol)

    Thanks again,


  3. Thanks for sharing the outside in trade setup criteria. Does the bar have to close above the Keltner for short setup? Could you comment on the two red candles/bars around 16:05 and 16:15 for the set up?

  4. hi tom, i was wondering for outside in trade (or in the hole as you like to say it) what profit are you trying to achieve? with the rules as described it certainly looks like a scalp trade......i was just wondering

  5. Anon 22:20, only for a high of that swing.
    Anon 02:28, no but at least near it
    Maddog, I only am "sure" of my first scale and then see what the market gives. Those outside in trades are sometimes low or high of day.

  6. Rino: the previously described setup you were looking for was on Oct 31 blog "Measuring Orderflow and Trading It"