Are You Getting Cheesed?

Are You Getting Cheesed? It was Terry Prachett who coined the term "cheesed" in one of his books. "Cheesed" is like getting creamed but its longer and harder.

The feedback I have been getting from traders is that trading is tougher these days. Our job as traders is to identify what is happening by looking at order flow and context. That has not changed. While volatility is continually changing, if we keep to our basic methodology then we should stay on track. If you go right back to the start of this blog now over nine years ago and step forward the you will see that really nothing has changed. However, our tools to look at the markets have improved dramatically.

The chart below is a good example. NQ futures from Friday. Just another day.
 

  Now compare the above chart which clearly shows what "they" are doing and is probably tradeable as it is, with the chart below which has two added elements of context.

 

The key to understanding what is happening is to relate the order flow to the context. How far are we from the mean? Where are there large volume nodes?  Price and volume without context is not too meaningful.

So if you are getting cheesed, go back to basics. Keep it simple. While trading is not easy only because of how we tend to think, our process can be simple.