TIVO sold crack. No momentum, altough that the bid is holding well, but there ought to be momentum squeeze on volatility tunnel.Originally Posted by ;
TIVO sold crack. No momentum, altough that the bid is holding well, but there ought to be momentum squeeze on volatility tunnel.Originally Posted by ;
Hi, Janpec, this really is so revealing to me as this used to be among the greatest ailments that prevent me out of entrances.
So if I understand correctly, the duration of leg, and also the rate of price covering a larger range directly reveals the scale/size of the order flow? I know my question is sort of stupid, cos I'm really asking if high volatility is caused by larger order flow. But I didn't realised this over these years.
Originally Posted by ;
It is not dumb question by any means, in fact majority of traders don't understand that fact and it is among the most important informations that points exactly what or who's attempting to do exactly what or where. Thing is in trading you want to be always behind the strongest player, your occupation as small fish is to determine where the sharks are working to float to, thus the manner price reacts at key levels or the way that it goes to those amounts is what orders where the current flow is likely to proceed.Originally Posted by ;
Mind that its not only the volatility which matters in terms of orderflow what it matters is relative volatility in construction when compared with the leg you're really tracking and how quickly and strongly that last leg revealed strenght. If you've got avarage ATR volatility in construction 1X and your final leg only went from LL into HH rotation on single leg using heavy movement and 4X volatility printing there's a chance someone has been buying strong, but the key advice is : in which. Where did this move start it indies if that move was caused from liquidation event or if it had been natural need increase. Its very important to monitor those complex details to find out who's attempting to do what.
The thing is that while your question was somewhat simple, in reality its a very deep question becouse to exchange with edge you will need dig really deep in order flow data. Many traders will assume that enormous strong move with volatility in one direction by itself signifies something, but the actual answer is. . .it all depends on further informations and situation. Nothing is relative in trading. 100 pips move in 1 hour EURUSD is moderate movement , but in pegged currency pair that is a huge move. So any info must be stripped down to all additional data to know where you are.
So for supply or need takeouts its crucial that you take complete moves in arrangement into account and then to place that last leg if it actually stands out then consider that as potential targeted effort for one side of market to give up.
Generally traders will probably comprehend or underestiamte the strenght of their move into support or resistance, so if a strong quick move occurs into resistance they will be prone to short it in expectations that price will be more quickly rejected, where the reality stands on the opposite side, particularly if its backed by behavior change compared to previous movements in construction.
Trading the price structures is about believing how and in which order flow is reacting at the conclusion is about math, it feels like its about visuals but its not. Two procedure are to focus on, one is accumulation and second is heavy orders which completly change the previous behavior. Accumulation is explained with this thread trough pullback leg rotation after urge moves, in terms that which you want to monitor, and heavy orders are explained usually trough takeouts or clearouts or adiditional different patterns.
To keep in mind, the most important thing in order flow trading is to maintain any advice in the circumstance, never assume anything about the face value, constantly compare it what. So if you ask yourself : the length of leg, and the rate of price covering a larger range directly shows the scale/size of the order flow?
The actual question should be, based on what you are comparing it to, to what occurred in construction previously.
Head that supply takeout is traded only along down trend, there ought to be clear impulsive downtrend leg prior to structure, in the case of posted example its an upward trend.Originally Posted by ;