Thursday, 4 June 2020

It's Still the Order Flow

I remember Pete Steidlmayer telling me that we are information processors and that the Market Profile was just a tool that we can use the put the information (data) into a format that we can process more easily.

Market Profile has evolved with the technology. While the original TPO format still has uses for context, it is the putting of data into volume profiles that, for me, has become more useful for day trading.

As the title to this post says: It's Still the Order Flow. How can it be anything else!

The chart above places the price and volume data into volume prices. NinjaTrader 8 has the ability to create these volume profiles automatically as the data comes in. MultiCharts also has this functionality. The lower section of the chart is the cumulative volume delta. This shows the aggresive volume driving value vertically.

Again, for me, this chart is very clear on how value is moving and what is driving it. The line on the chart represents the mean.

The last component of my trading plan is my money or trade management. As you have seen in the blog since it began more thn 10 years ago now, the key for me is to scale out of contracts as the price moves vertically in my favour. After I'm out of bullets I find a logical place to reload if there is not a roadblock close in front of me.

I've been using the extra time I have during the current situation to refine my trading plan. It was worth the effort.

Good trading!

1 comment:

  1. Are you planning on doing an updated course or webinar outlining this method of incorporating the volume TPO's ? I have the initial course CD's and still use them but it would be great to incorporate this updated method into my trading. Thanks.