Wednesday, 5 October 2011

How Strong Is The Order Flow Before RTH ?

As I have written before, there are many styles of trading.

The one I want to talk more about is the shorter term trading - some call it scalping but it's not just for 1 tick.

It comes down to what I have also called the first logical scale out point and is that price which I am pretty sure that the market will get to, taking into account the order flow I see when I pull the trigger. This can be just a few ticks or a lot more.

This judgmental, subjective call can be made on a number of basis: volume breakdown, cumulative volume delta shape and direction and context, momentum both short and long term, how far from the EMAs the entry is, and so on.

In making this judgement I want to be sure more than about 75% that I will hit that first logical scale out point. I then have the option of being all out, or actually scaling and at some point moving my stop to break even plus a tick. This will depend upon the context and/or the closeness of that first exit.

The pre-RTH period has lots of opportunities if you are looking for a market in that time zone. Today's video shows a nice sequence.


  1. Hey EL, I just started trading the ES during the Euro time Zone. I’m having a hard time creating a picture in my mind of how the morning could unfold. During the Day session I use the Gap fill and the Market Profile. I’m not sure what to look for in the Pre RTH session. Any tips to get me up to speed.

  2. Hersh, I don't Gap trade until the open of RTH. When I wake up in Eurotime, I look at what happened in Asia and how far we came from the NY close. The key in the Euro pre RTH time is Outside in trades and/or trades from the EMAs in direction of the trend. Key is to envision whether the market wants to go back to NY close or not.