Go with the Flow

Firstly, let's talk about what I mean by Order Flow.

When I was on the floor you could feel the Order Flow. The locals either had their hands facing inwards or outwards (buying or selling); the noise level changed with the level of activity as we bid and asked in line with our hand signals; we looked at the areas where the "paper" (orders) came in from brokers; we tried to watch the hand signals of orders being  flashed into the pit from the booths to their paper fillers. That was the order flow we traded against or front ran.

Electronically, we usually don't have these things. Some guys who were on the floor and now trade electronically can't trade without the floor so they subscribe to a "squawk" of the activity from a pit that corresponds to the electronic market that they trade. For me, the problem with that is that the pits' volume is shrinking day by day and will surely disappear altogether soon. Also, the volume traded in the pits is usually much smaller than the volume traded electronically.

So what happened? The exchanges and the data vendors provide great information about what trades, how and when. We can "read" this information with out computers and output it onto our screens. It is this information I look at to read the order flow. You have seen my charts and the indicators we have chosen. Each provides us information about what has traded, how it has traded and when it has traded. Processing this information in the context of Market Profile provides the setups and creates the triggers.

No Ifs, Ands or Butts 
The "butt" I am talking about is the butting in, or rather out, that I have done this week in Kiki's trading.


Kiki, I have been leaving you alone during trading all this week as I'm feeling sorry for myself because of the pain from my back. But it seems butting out was good for you.


Touching base after you have stopped trading for the day is what we will do from now on. If you need me during the trading day, you know I'm there.

 

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