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  #355  
Old Jan 23, 2011 11:45am
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Carnegie,

Let me join your thread and contribute little bit.

I won't talk about Orders Flow theory because I'm not as wise as Darkstar or Scotty B for instance are and I have no idea how this mechanics works.

Let me express my view about Order Flow real trading. Ideas I will represent here neither are new nor are mine (I wish I would discovered them). Almost everything I know about trading I learned from Joe Ross so all acknowledgments go to him.

Since English isn't my first language I beg your pardon in advance for all mistakes and typos I will make.

What I will talk about is what I use in my everyday e-minis or currencies futures trading however this style is suitable for trading in every market.

This kind of trading is more preferred for intraday trading (at least in futures market) nevertheless it all depends on you and your trading management skills to keep position open as long as it is profitable.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.

Last edited Jan 23, 2011 4:29pm
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  #356  
Old Jan 23, 2011 11:53am
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First of all let us agree on several presumptions:

•It's the job of the market to fill orders (in order the market to be efficient).
•The job of the insiders, at least in large part, is to fill orders (by insiders here I mean big banks and other market makers).
•In the absence of the large order flow from outside of the market (money pools, hedge funds, central banks etc.) price will always go where the preponderance of orders are located.

Where the orders are located should be our primary consideration before entering the trade.

So where are orders located?

Orders tend to be located at support/resistance levels. What we talk about terms support and resistance are either pivot points on the chart (don't confuse with intraday - daily pivots!) or tops and bottoms of congestion areas.

Okay how can we use information which almost every trader knows?

It is when market makers (or insiders – call whatever you want) will move market to fill these buy/sell orders we want to enter the trade and swim with the flow – orders filling flow.

Market makers or insiders will move market to fill orders, go where orders are, run stops – whatever you choose to call it. That is nature of the markets and driving force behind price action.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.

Last edited Jan 23, 2011 4:30pm
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  #357  
Old Jan 23, 2011 11:56am
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So how we can put to the reality what we have learned so far?

As a trader our goal now is to find convenient entry point that will enable us to enter the market well ahead of an anticipated upward/downward run caused by the market makers.

It must be clear definite trading range or pivot point on the chart well ahead of the trading orders' clusters.

As saying goes “a picture is worth a thousand words” so I will attach couple of charts later on just to have understanding what I'm talking about.

In these examples I won't show you where to put stop loss or take profit or how to manage your trade. This goes far beyond of this thread scope and you can find a lot of information about these topics even in this site.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.

Last edited Jan 23, 2011 4:30pm
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  #358  
Old Jan 23, 2011 11:59am
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I fell few of you will be misguided by the words “well ahead of the trading orders' clusters”. What does that mean?

By the words well ahead I mean reasonable distance of ticks (pips) to cover your costs and make some profit in case market will reverse there. For instance in e-mini SP500 trade such distance averages from two to four points (dollars) on the chart. For EUR/USD or GBP/USD trade – up to 30 ticks (pips) and so on. I hope you will grasp the idea behind the figures.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.

Last edited Jan 23, 2011 4:31pm
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  #359  
Old Jan 23, 2011 12:07pm
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Pound

Fresh examples of the GBP/USD trades (6BH1 as March 2011 futures contract).

I attached 6BH1 charts (equivalent of GBP/USD pair in cash market) by coincidence – you can find a lot of examples almost on every chart.

Attached charts are in 3 different timeframes: M5, M15 and M30. It's up to you what timeframe to choose from. In e-minis trading I usually use M1, M5 and M15 or 377 and 1597 ticks. There is no magic behind these numbers – you should find what works best for yourself.

Take care.

Vidas

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.
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Last edited Jan 23, 2011 4:31pm
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  #361  
Old Jan 23, 2011 12:11pm
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More examples...

- - - - - - - -
?Do not sell morning weakness in the strong uptrend? ? old Sumer proverb.
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  #362  
Old Jan 23, 2011 12:15pm
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And couple more...


- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.
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Last edited Jan 23, 2011 5:02pm
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  #363  
Old Jan 23, 2011 12:19pm
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And the last few...

Notice that momentum thrust bar pointed by arrow. Usually when price takes orders cluster it does that with huge power. Market movers must place enough force into the movement to carry it through all these orders sitting above/below congestion.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.
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Name:12 - 6BH1 M30.gif
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ID:623525    

Last edited Jan 23, 2011 4:33pm
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  #364  
Old Jan 23, 2011 12:22pm
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Just couple words of caution:

•You won't have to force yourself to entry the trade.
•You need to see obvious entry formations.
•To have clear vision of entry points use two – three different time frame charts.
•Once again - it must be clear definite trading range or pivot point on the chart well ahead of the trading orders' cluster.
•Be quick to exit if you don't see explosive moves you are looking for. The moves we want must carry momentum. They should blast through the order clusters.

That's all I wanted to share with you. Good luck to all and trade well.

Take care.

Vidas

- - - - - - - -

“Do not sell morning weakness in the strong uptrend” – old Sumer proverb.

Last edited Jan 23, 2011 5:04pm
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  #450  
Old Jan 25, 2011 4:47am
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Default @Nritv

Quote:
Hi Vidas - Can you help understand of how you decided that the Order Clusters are above Congestion and not below?. Thanks for your help.

http://www.forexfactory.com/showthre...06#post4336106


Hope that helps.

Take care.

Vidas

- - - - - - - -
?Do not sell morning weakness in the strong uptrend? ? old Sumer proverb.
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