Wednesday, 7 March 2012

The Order Flow

Order Flow is the continual buying and selling as it happens. If there is nett selling then the price usually goes down, and when there is nett buying the price goes up. Volume breakdown looks at whether price is traded at bid or ask. The CVD is the cumulative totals and/or averages of the VB. I think that the value of the VB has been much reduced or changed since the advent of HFT.

HFTs and big algos use strategies to "play" the market. These strategies can include soaking up volume at the bid, not the ask, and then the market is short and there is a pop up that they can profit by. They can also just come in and sweep up all the offers causing more stops to be hit and profit by that. The first operation will show up as selling delta while the second as buying delta but both result in the market getting pushed up.

It's all about the context.

Well Wednesdays in the Oyl Bidness means that you trade the Oil Report. It wasn't too hard today as I bought the trend change and exited at the Fab Fib. It's the Order Flow. The best trade is the first trade after the trend change.


  1. Hi Tom, DAX is one of your favorite instruments to trade, also it has a low volume...can you tell me what is the range bar setting you like DAX to be set to?

    1. Anon 09:59, I use an 11 tick (5.5 point) range bar unless I need more noise.

  2. Great trade!

    Do you usually use a 135 CCI on CL? When do you know to change it?

    I tried to fade that move using a 45 CCI and the hook trade, but the market just kept going.

  3. Anon 11:03, I use the 135 when I need larger range bars or when there is a choppier market. Not science but feel. The outside in responsive trades need something to lean or otherwise I don't know when I'm wrong.