Wednesday, 28 December 2016

Trading Order Flow - the Series Part 2

This is the same pic I posted recently. Lets look at what I have on the chart.

The large chart gives a larger view of what's going on. It doesn't really matter what the periodicity is - it can be 1 minute, 9 tick range, 99 contract volume - anything really because we are going to trade order flow. The periodicity is to break the bars into volume measurable significance and to allow the indicators to fill in some of the contect.

We then have Market Profile or Volume Profile. This an importand part of the context. Finally, I have a chart that mirrors the main chart's last few bars but with the inside the bars information exposed.

Lets talk about context. Exactly what is it? I started talking about context in this blog from the beginning years and years ago. Since then I have seen it mentioned all over the web but without it being explained.

Context has a number of components which include;
  • what is the trend
  • where is the mean
  • how over bought or over sold are we
  • where is value
  • where are the edges of value
  • where is the centre of value
  • how is volume moving
Having this information, I can now make informed decisions about trades to take and exit in accordance with my trading plan.

More to come in subsequent posts.


  1. Thanks to sharing again your knowledge and experience.

    I missed reading your posts.

  2. Thank you for the updates. Has the book you were authoring a year or so ago been completed? If so how does one acquire a copy, either hard, paper or e-book? Thank you in advance for a prompt reply.