Saturday, 3 December 2016

Everything Old is New Again

As we come to the end of 2016 I thought I'd summarize where I am now with day trading.

When you look at the chart below, you will see the same ols same old plus a whole lot of new stuff to help with both the decision making and the execution.

Nothing has changed about the basis of trades: its either outside in: fade the moves, or, inside out: trade the pullback in the trend.

What has changed since I started this blog in 2009? Well, all the futures pits are gone. No more locals. We're now all electronic locals.There's no middle man or buffer for our trades. Except for the algos. And that's a big "except". The "except" is now somewhere between 70% and 90% of the volume (depending on who you ask).

And why does that matter? It matters because the rhythm of the markets have changed and the way in which orders appear has changed. We have words such as "HFT", "submarine" and "iceberg" that have taken on a whole new meaning.

However, happily, the technology has advanced in leaps and bounds. Seeing order flow has never been easier. And order flow is what we need to see in order to trade successfully.

The workspace below is what I trade off. I've upgraded to 27 inch 4k monitors to give me more room and granularity.  NinjaTrader 8 is out. The charts are my same range bars but with a ton of order flow information. I'll tell you more about how I use the information in subsequent posts.


  1. Hi EL,

    I'm doing well in my trading but there is still a lot of trust needed in determining whether a setup that looks exactly the same as another has a high enough probability of working to make the trade worthwhile. I know that I am intuitively reading order flow as I watch the candle form, but this means my approach is relying heavily on my level of trust on any one day.

    What would you recommend for someone who wants to incorporate an objective measure of order flow into their established trading routine? I feel like this could sharpen my edge significantly.

    PS I'd be prepared to pay for a quick consultation to help set me up with this.

    1. Hi James, there's no "intuitively". Is measurable. You need to see what the order flow is doing at both your trigger entry points and at potential exit areasc.

    cuanto tiempo sin leerle, espero q el año que viene lo haga mas amenudo

    1. Hi Jenrique, I didn't have a lot new to say until now

    2. Well, maybe we are talking about two different things but, regardless, what can be measured can also be done intuitively. So there is indeed a way to monitor order flow, or anything else, using intuition. In any case, whether we agree or not is incidental. It's how I can add an objective measure that counts (and we both agree THAT is possible!)...

      ...but you didn't answer that question though ;)

  3. Hi EL. NinjaTrader 8? Would be interested in the specifics on your charting as MarketDelta are changing their platform and I'm not keen. Would you mind sharing? Thks