This article will explain the fundamentals of order flow of Futures. https://optimusfutures.com/tradeblog/archives/order-flow-fundamentals We put this together with our team a few years ago, and it's probably one of the most viewed pages on our blog.
%% Exactly. Mr max; on the bottom of the ocean is a ship wreck + a chart. But that is the captain +not the fault chart /map.LOL Same pattern; if guns kill people , then i guess spoons make them fat .LOL
Every Chicago Futures pit trader starting way way back in 1864 would take strong exception. Having traded both in the pit and on the screen - I don’t trust the merit of electronic “order flow” indicators for a number of reasons, both purely technical and objectively cynical in nature. But I readily agree that ‘some’ limited number of extraordinarily gifted traders can successfully trade off of “order flow”. There is no free lunch and there are many different ways to successfully take money out of markets. All require an incredible time and work investment and some skill at making very good risk versus reward decisions.
%% A lot of it would depend on if; you like numbers?? I like pics /charts with my numbers/pictures with my numbers/candlecharts. ANY data has some errors LOL; not making it useless.,
I saw a few recommendations in this thread on how to get to good order flow. I looked at both jigsaw and marketdepth. My platform is think or swim though - is there any recommendations for footprints, partial volume profiling etc for tos?
"Order Flow" is an illusion. The best bid and best offer gets spoofed all the time as well. And trades get crossed. The DOM is full of gamesmanship and false narratives. And bid versus offer imbalances are pure smoke and mirrors as well. If anything, resting volume invites trade. One of the first things I learned while on the floor was NOT to fade size. Market Profile has been doing the same thing for forty years. Bookmap, Market Delta, and all the other DOM footprint toolboxes have something in common - they are NOT privy to the exchange order identifier tags. These studies or toolboxes have ZERO resolution (ability) to identify Commercial, Large Spec, or retail traders making or taking liquidity. They cannot distinguish crossed orders from other fills. All market participants are PRICE sensitive. The more TIME a market spends at a new or fresh price range - the more accepted that valuation becomes to all market participants. PRICES that overvalue an instrument are quickly rejected by the marketplace. That’s all you need to know. You’re welcome.
Thank you very much. It is a sobering message though. I only recently started to look at volume profiling and am interested. Everyone is looking to broaden their toolbox and the idea of it makes sense. I do not own any of the toolboxes yet. And you paint them as useless. You bring in a different aspect (time) to take into account. I have not considered this enough.
My personal opinion is that while it can be a useful and supplemental tool, it's highly overrated. Vendors and trading educators want you to believe otherwise and it seems to be the latest trend in trading education. Popular (and false) selling points seems to be that in every serious trading institution you will only see price ladders and never anything else. Forget about charts. LOL. The vendors are probably making nice profits though. Just not actual trading profits.