Discussions on Order Flow/Volume

OK...OK...OK...lets not get sidetracked here.

If you want to believe that there is some malevolent entity out there stalking your mini lot trade then WHY trade? Why not take your money and invest it in something else? If this is your theory then it makes zero sense to pursue this business at all.

The point of this thread was for me to impart some common sense and truth to all of you about what trading is and ISN'T. I'd really like to be done with this subject. It does not affect my trading day by day and I'm reasonably sure it won't affect yours as well. But if you want to continue down this path, I'm afraid this is not the thread for you...I think there are others out there along side the Elvis is still alive on Jupiter conspiracy threads.

Lets please be done with the subject of manipulation...stop hunting...and any other paranoid conspiracy theories. Lets concentrate on markets and how they work and adjust our behavior to use that information to our advantage. HMMM?

DonPato… Thank you! I have waited many years for someone to explain this in an understandable, non-condescending manner.

I can imagine the time you have taken from your personal life to share this information with all of us whom you have never met, and likely will never meet.

Your ability to articulate the lessons/information - and then to keep the focus with kindness - is not only very rare, but also quite remarkable.

I hope you will continue... You are already a true blessing after only 2 pages of this thread!!!

I look forward to contributing once my learning curve is farther along.

AGAIN... THANK YOU!

I thank YOU that this information is well received. I am truly grateful that this simple information finds such a great audience. This information is no secret it is simply the Truth about the structure of the market. Please don't wait to participate in this conversation. I imagine you are not the only one with questions. And many are shy to ask but once it starts then everyone learns as well your specific question is answered. If I don't know the answer I will say so...we are all learning here.

Gold: November 19 review

Gold prices were trading below $1500 range today.

Last Saturday’s Chinese media Xinhua reported that US-China had held constructive talks.

Therefore, all Asian stocks were trading positive today and Hang Seng and Chinese stock markets were up by +2% and +1.5% respectively on Monday. All European stocks are also trading flat to positive today.

According to latest report, China is pessimistic about the near term trade talks with States. Hence all the profit got washed out especially for Hedge funds like gold and silver after release of these reports.

Dow 30 futures, December contract traded +20 points, +0.04% up at early European hours.

Traders should always keep an eye at this type of situations and Gold prices should be in bullish trend as a safe haven demands.

By 07.00 AM IST, Gold futures, December contract traded around $1472.50 range, up +0.08%.

Uncertainty of next fed rate cut decision will also give negative impact for safe heaven demands like Gold and Silver.

Expecting profit booking, we will wait for any positive news of trade deal from US sides.

For intraday and STBT strategy for Gold is given below.

Entry point - $1472.50-$1475.00

And keep R1 $1482.00

And wait S1 $1455.00

And wait S2 $1450.00

And wait S3 $1445.00

Hello goldexpert. Welcome to our discussion of order flow. Forgive me but I am not understanding how your post promotes this discussion. Can you please tell us? This appears to be a typical fundamental/technical analysis. How does this further the theme of understanding order flow?

DonPato, It is really very difficult to find people with the knowledge, coherence and experience that convey the concepts as you do, Definitely your contributions open my horizon in trading, thanks for your efforts, many of us appreciate them.

Welcome jusiur... I am very gratified that this information helps you. Please feel free to ask questions or state concerns or simply contribute to the conversation. We like dialogue here.

Hello friends and good morning...First of all I would like to genuinely thank all of you who have expressed their appreciation for this thread, both publicly and privately. I want you to know that this means a great deal to me as normally when I try to talk about this subject I am either met with much criticism or silence. So from the bottom of my heart...THANK YOU for your messages of support

Yesterday, I wanted to mention the subject of TIME but felt it might derail the discussion about Delta...so I have left it for today. As I'm sure you are all aware, TIME is probably the most essential structural component of the market function. When I list these components I always list TIME first. To review the structural components of the market are (1) TIME, (2) Order flow, (3) Volume, (4) Price. Because the middle two are so inextricably linked together I always list them as such...(Order flow/volume). The reason for this is simple. You cannot have one without the other. Once cannot place an order without also listing its size (lots, contracts, shares...etc.) But lets begin a discussion about time.

Oddly enough we hardly even think about this as a component in the market yet every time you look at a chart there it is...TIME running along the bottom on the x axis of your chart. In forex and stocks, TIME doesn't seem to be as much an influencing factor but in futures, options, and commodities, TIME is a huge factor. Lets look at the idea of contracts. In futures very three months, there is a major roll over of contracts. This is because futures deals mostly with "deliverable" items. This means that if you hold a contract for 100 bushels of soy beans at the end of the contract you must either take delivery of those bushels or "roll over" the contract into the next period. The same is said for options. Each options contract has a "time decay" associated with it meaning the contract becomes less and less valuable with time (assuming it is still "out of the money"). Finally with commodities, TIME as in time of year, is extremely important when determining the value of your commodity...as an example: I was recently trading Natural Gas (CFD's) and this is a commodity whose price will fluctuate with weather reports. Obviously the time of year has a great deal to do with that.

In addition. TIME is a personal issue. Many enter trades expecting the price to move in their direction "right now" and if it doesn't do that within their personal confines of "right now" the trader becomes anxious and this anxiety may cause him/her to take action that was not previously anticipated. As well each and every participant has a "Time horizon" in the back of their minds, as to how long they anticipate holding a trade or position to expect or maximize profit potential.

Finally, for those who trade with leverage (which I think is most of us), each leveraged position generates a cost associated with time in the position as part of the cost for "borrowing" your leverage. Not to mention a swap rate (for us FX traders) that generates at the end of each 24 cycle. Sometimes this rate is actually a positive number (generating interest) but mostly it is a daily charge against your position, that slowly eats away your profit if you hold for long periods of time.

TIME is also a monthly cycle event for those of us who favor fundamental and economical news announcements. All of these issues with time effect the order flow/volume which intern effects price.

I would like to be able to say something wise and sophomoric at this point but I'm afraid it is just this: Time can be your best friend or your worst enemy. As you are looking for opportunities in the markets TIME must be one of your chief concerns. I can't tell you how many times I have looked at the e-mini futures market and seen just sluggish and apathetic price movements and unusually LOW volume until I suddenly wake up and realize that the new contract has rolled over...and I am trading the Old contract...Then getting out of that trade is quite nerve racking as well, because you are waiting for someone more stupid than you to take the other side of your exit.

In addition if you are unaware of the timing of news and economic announcements you may be going happily along on your trade until BAM!! That news hits and the volatility took your STOP, not your TP. (isn't that always how it works?)

But these are things that can be readily adjusted by simply double checking your calendar and news feeds BEFORE you start looking at things. I am more inclined to speak with you about TIME as it relates to your personal interpretation of "right now" and how that is effected by TIME CHARTS. Whether we are conscious of it or not, every candle that ticks across your chart represents time. Indeed for most trader (myself included) time is the x-axis of our charts. So when we see things (again consciously or not) we see a "rhythm" that effects us. I wish to make you aware of this because the market is completely UNAWARE of time. WE divide prices into times...not the market. The order flow is irrespective of this but is ultimately effected by it because it is HUMANS that enter orders. And each of us has something that creates an "urge" to engage, and this something is largely effected by time.

Sometimes we see price moving rapidly and try to "catch" it. Or sometimes price is simply ranging and not advancing as fast we we'd like and we get impatient, and start "adjusting" our orders.

So how can we use TIME to our advantage? Here are some suggestions and things to look for. Sometimes prices will move to a point and then just sit there...and you will see this, especially if you trade small time frames. Price will not move higher or lower and it seems it is suspended in time...THIS is a major clue of absorption. I will explain this concept in more detail a little later, but if you see this understand that the order flow is going gang busters underneath this stalled price movement and expect something significant to happen.

Another thing one can do is to move away from time based charts. While I do NOT do this on larger (daily/weekly) charts, I do this very thing on my futures day trading charts. I use constant tick and constant volume charts. This takes the element of time completely out of the candles and they only advance when a set number of ticks or contracts have been transacted. That way during a slow market, you will not see candles upon candles going by doing nothing and leading you to thing a "range" has formed..when really its just a low volume environment that will move again when more volume comes in. Like during gap times.

Some use renko or range bars. Which only advance when a certain price range has been completed. Again the advantage here is to keep time in its place, which also helps you psychologically and keeps your mental edge sharp.

I hope these ideas about time will help you and want you to completely understand this connection: Time effects people --> people effect order flow/volume --> order flow/volume effects price.

Just as a way of resources...there were some who were asking where they can learn more about this subject. I did a google search on "order flow" and this page looks like it has at least 30 different resource materials: https://bookmap.com/blog/30-material...-flow-trading/

No I haven't read them...but if you are looking for more information I think this could be a good starting place.

What program do you use to see this delta charts?

In longer term trading which is mostly seen here I use cTrader. This includes FX, spot gold, and CFD's. On the futures side I use TradeStation.

On my cTrader the vertical delta is a program that I had coded for myself using my data and formula. The histogram delta volume is publicly available for cTrader.

Don Pato, now that concepts are being clarified, I want to ask you something please. Is it a myth or reality that the volume in forex does not exist, specifically in MT4?

It's reality, it measures in ticks so its different then volume. But it's also a form of activity so you can use it

Contrary to popular belief, volume does indeed exist in the FX market. Again I repeat...one cannot place an order without also declaring a volume. What is lacking in the FX market is a central exchange.

There is no central clearing house for transactions in the FX market because it is inter-bank. The transactions are between major banks and only the minimum is reported to government agencies. Thus the volume data we have access to are transaction counts (ticks) and not the size of the transaction like you would for the futures or stock markets.

I have addressed this in detail and ad nauseum in my thread:. Hey...what about volume. Tick volume can be used to your advantage we just need to understand what it is and adjust our thinking when trading this market. I use it in almost identical ways and have done just fine.

Just to add on this, I think this link http://volumeprofile.org/paper.pdf will also provide some additional information on tick vs real volume correlation in the FX market, I could be wrong, but I think this is where the popular 90% correlation originated from.

We can compare open/close/high/low prices for n brokers. Will there be differences for lowest/highest prices for M1 timeframes? Is it posible that my order is manipulated so that i get stop loss with price which is not according to charts?

It is my suggestion that you find and do business with only reputable and transparent brokers.

Thanks

Thank you DonPato , to give such great explanations on this topic.
for attached software screenshots here, i have questions:
1> if my platform cannot provide order flow infomation like this, could i make a order-flow based analysis and how?
2>as i do not use the software before, i wonder that the order flow graph of each bar appears in Real-time or End-of-day mode?