Reading Order Flow

Been lurking these forums for a while now, but anyway... I've been searching for ages about how to read order flow from just the order book, but information out there seems pretty thin on the ground. I was on youtube today searching for some videos about it and I found this



Anyone got any idea what he did to take the trade in the video?

Cheers

seems like he isn't trading but charging folks 2500 bucks for training..

Where did you see that? All i can find is that youtube video and his blog which doesn't mention anything about any training or other products. Just seems to be some guy with a blog

There seems to be another video that shows a bit more detail



What I can work out there is that there's a volume divergence, which is something I like to watch for anyway. The thing that intrigues me most though is that in the videos, when he places a trade, the market seems to hardly every go against him.

I spoke to a professional trader once briefly when I was at a friends wedding. I got the impression that he didn't want to talk to much about it on his day off, but from the little that he did say to me about it was that he watches his order book to get entries to lean. Been searching and searching the internet, but haven't found anything. Anyone got any links to anything along these lines, as I feel this is the type of stuff I need to learn next.

Thanks in advance

Nice vids for deaf folks I guess. With no audio, I don't know what the hell is going on in either of the youtube posts.

The youtube "name" is OCMTrading with the profile listing the feller as a "professional prop trader" ... country: U.K. ... on the listed blogsite, there's an email where you can contact him and put in your 2 cents' request for him to invest in a recording microphone for future youtube posts.

Evidently his name is Kevin ... don't know if there's any relation/association with OCM Capital, which is also in the U.K.

That's all I can figger out. Apparently, y'all live in the same neck of the woods, so tell him I said hi.

I had a read of his blog which is pretty interesting. I emailed him asking about the videos and his response was basically saying that there's a lot of mis information about day trading and that the purpose of the video was to show that professional traders aren't using any secret methods, and are looking at the same stuff we are, but using the information correctly.

Someone who posted on this thread said he offered training, so I asked him in the email as I might be interested. He said he doesn't advertise training, but if people are interested in being trained, then he said it would be something he would consider.

Apart from that, the rest of the email went along the lines of, you can see what is possible now, so keep at it.

I'd read through his blog about a couple of weeks ago after stumbling across his posts in another forum ... also watched the first silent vid and truly had no clue what he was trying to get across. Things were'n't explained much or well. All I got was pretty much what you've typed here along with a minimal and (to me) a convoluted way of looking at or "reading" order flow.

Maybe he'll provide more info in an understandable format in the future to better describe what he's trying to convey on his blog and especially the vid regarding reading order flow. Because, as you've related in his email response to you, I don't "... see what is possible now ..." from his postings yet.

Originally posted by Lynx

I had a read of his blog which is pretty interesting. I emailed him asking about the videos and his response was basically saying that there's a lot of mis information about day trading and that the purpose of the video was to show that professional traders aren't using any secret methods, and are looking at the same stuff we are, but using the information correctly.

Someone who posted on this thread said he offered training, so I asked him in the email as I might be interested. He said he doesn't advertise training, but if people are interested in being trained, then he said it would be something he would consider.

Apart from that, the rest of the email went along the lines of, you can see what is possible now, so keep at it.

that would be great to have some real info on this stuff...I'm also gonna try Market Delta again soon...are there any good resources from people trading with it? I've seen some cumulative delta work that seems promising....so that seems like a good path...

hi

some good sites for market delta traders:

http://www.discoverytradinggroup.com/ a good 3 video series that Market Delta sponsored

http://www.ioamt.com/ decent enough trading room

http://www.inthetradingzone.com/ decent trading room and good free content

http://electroniclocal.blogspot.com/ good blog

http://www.fulcrumtrader.com/ some good you tube videos.

Obviously they want cash for something at the end of the day. I think the e-locals blog is the best free content but it's hard to pick up order flow looking at stills and trading blogs, you need to try and experience it for yourself.

This guy Kevin trashes Market Delta in his blog yet OCM Capital advertise as part of their charting software on the website so not sure what the deal is.

Without really knowing what he does it looks like he's a fader at support/resistance, probably looking for traders getting stuck buying/selling breakouts.

Originally posted by BruceM

that would be great to have some real info on this stuff...I'm also gonna try Market Delta again soon...are there any good resources from people trading with it? I've seen some cumulative delta work that seems promising....so that seems like a good path...

I highly recc. you watch the three videos from the Discovery Trading Group (on the MD web site), also MD has a lot of video content.

Cumulative Delta can be very helpful, but like anything else, it is no holy grail. When Fulcrum Trader was just starting out I followed his blog, which was good (and probably still is, but I don't follow it anymore) he has a very good understanding of cum. delta. However, cum delta can also be misleading. I emailed the guy behind fulcrum trader trying to start a dialogue...I suggested to him that he seemed to be on the right track in general regarding cum delta, and I offered a few reasons as to why his "levels" sometimes got blown thru.

A few things to keep in mind when learning order flow on something like the ES - what I'm saying here is there are aspects of the market that the common retail trader generally has no clue about, but you need to be aware of if you want to study order flow and cum delta...no one really ever talks about it, but you need to know: the ES is an instrument that is used by different institutional players for very different purposes- some use it as a directional trade, others use it as a hedge while legging into or unwinding a large inst. equity position, and finally, lots of arb. spreaders are involved and account for a large portion of the volume in ES. With three large general inst. player categories, each with a very different objective, 'reading order flow', including cum. delta is not very straight forward, and has become just as much science as art. It's a bit like tape reading....there are no books are instructional manuals because it is something that is picked up with experience. One if the features I like about the MD
footrprint chart is that you can replay the day and watch the order flow action at 'key levels' to see which group is doing the pushing, who is in control, who may be trapped, etc. Unfortuantley, the typical retail trader wants to put 'order onto order flow' and figure out the 'rules'.....but in reading order flow, due the variant nature of the major participants, it does not lend itself to a set of if/then rules.

One of the things I do is have two T&S strips running, one unfiltered and one filtered for size. I want to see the speed, momentum, rhythm, cadence, etc of the T&S and compare it with what I see on the MD footprint. I know it sounds a bit much, but its something I'm used to and have been doing for years (i was one of the first MD customers, but it took me a while to learn how to use it, and it still evolves til this day).

here's a couple of videos that you may also find uselful:




is actually 3 videos - watch all three.... I know nothing about what they are selling but the videos are good...most people I've shown them to have learned a lot.


PS although MD lists me as a 3rd party educator, I have no financial relationship with MD.

Originally posted by OrderFlowPro

Trading Order Flow is the closest method to science in trading you will ever find. There is more to analyzing order flow than just looking at bid/ask, you need to breakdown order flow into it's component parts to fully understand it.

The diversity of intentions of the participants in the ES make it ideal for Order Flow analysis. It is impossible to know the reason behind any trade, except your own. However, the results of increased buying always results in price moving up and increased selling results in price going down.

Properly applied Order Flow analysis tells the entire story. Using Order Flow you can achieve levels of accuracy in your trading not possible with any other method.

From your website: "Complete Methodology Training $37,750 including 4 days of one-on-one training, 20 days of live trading & indicator package"

Holy Shmokes dude! I can get me a new double-wide for that ... fully furnished ... on about 30 acres with 10 head a cattle and a goat! Whew, that'd be a hell of a case of buyer's remorse if it didn't work out.

ps. Seeing as you're charging a pretty darn healthy price, you might want to proof read your site since you've got some spelling and punctuation errors ... might scare off business if the sticker shock doesn't do it first ... ex. "Please fill out the from below and I will contact you to schedule a live presentation..."

pps. My proofing "service fee" invoice is in the mail

Originally posted by Lynx

Ok so i emailed him asking about market delta and his response was that it's just a gadget and nothing more. He says cumlative volume is only a very small part of the story and needs to be combined with the bid/ask. He said the reason why market delta is rubbish is that apart for a few other indicators, it's just cumlative data which any decent front end will show you anyway, and then ontop of that it shoots itself in the foot by suffering from frame trap (anyone know what that means?) He said that if market delta was as useful as retail traders say it is, then the whole city would be using it as the standard just like CQG and TT are the standard for professionals in the city.


I asked him if he just fades s/r and he said no. He said in the videos he is just fading s/r levels because of the current market conditions, and that was the point of the video, to show that if you learn order flow properly and learn to adapt with the market, then you can make good money consistently regardless of conditions. He said to trade properly you need to fully understand orderflow and how orderflow works in different market conditions so you can adapt if market conditions change. His said most retail traders will be sat about looking for trends all the time and not acknowledging the conditions and not adapting to them with their one size fits all approach. He finally ended the email with that professionals essentially just profit from the ignorance of the masses who think they know better.

Interesting...

Thanks for sharing. I would disagree with his statement about MD being 'junk', and I know several large pros (inst.) who use MD/IRT. But everyone is entitled to an opinion. His last statement about pros profiting from the masses is pretty right on though.