May 112010

Mousetrap (traders who bet the wrong side, realize it, and need to exit)

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Littleprints (failure of price to print typical size on tests of highs or lows)

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 Posted by at 8:07 pm

  7 Responses to “Order Flow Analysis charts”

  1. I enjoyed the webinars! Thanks for taking the time to share and starting up a community here. I definitely hope to make some new friends and share!


  2. Glad you enjoyed it. We would love to see you all grow into a strong community of no-bs ES traders. We learn from each other in our little crew every day and there is no substitute for it. You see how serious we are about sharing to better our trading – we are sharing our whole game plan with the world! lol. But seriously, welcome and hopefully you will find peers that will interact and share with you.

  3. Hey, thanks! That’s a big part of what I got from your presentations — how valuable your team is to each other. Coming up the ranks as an individual trader all alone is probably one of the hardest ways to achieve success. If it were not for the couple of buddies that make up my rag-tag trading community (that I met via the Brett Steenbarger blog) and Dr. Brett’s almost 5 years worth of curriculum there, is no way I’d still be in the game. So thanks again for your great, fun attitude and willingness to reach out. Brett was the one who really taught me that it’s more about giving. But, alas, aren’t most of us just worried about what we can get? The half dozen or so traders that have reached out to me for help over the last few years didn’t want to put in the work anyway. They all wanted some quick fix as they continued to do destructive trading. Although one of them is not trading anymore because he lost everything last year. So if there are any independent traders out there reading this, listen to Discovery! Reach out to others. Hone in on some Dr. Brett material, too, and learn how to coach each other. Two minds (that are willing to do the work of course) are really better than one.

  4. Great Webinars , Thanks for sharing


  5. Hello RG,

    First and foremost thanks for sharing.

    I do have a question if you don’t mind. I just finished webinar 2 and am looking forward to watching 3 ASAP. I noticed that in your example of how you picked levels you paid the most attention to the Globx section, however in the question part you said you really don’t unless there is significant volume?

    There is a movement towards daily composites out there now. I notice that you have one but that is a secondary consideration. Why do you not look at the composite for say like the last 5 days? It seems like that would be more relevant, especially consider that using only the current holds the most value only if the following session is an inside day?

    I am going to guess that because of your style of trading and set ups is why you are focusing mostly on the very short term. If you were looking for handles the further out levels would hold more significance.

    Thanks again,


  6. -We trade the 1st half to one hour so first key levels likely to be hit will be last touched overnight or late yesterday.

    -I was refering to total volume in the Globex session, not the levels. I use total volume traded overnight and yesterday as commitment filters and was saying that unless overnight volume is significant, trading leaning slightly to positive or negative deltas is not significant. But if overnight volume is huge and delta makeup is leaning far to one side and institutional participation is big and leading the lean to that side then it is important to me.

    -Composites are important but only for congruence. My composite ranges from the last swing high in October 07 through the March 09 low to present. If we are currently right in the center of a low volume cluster or center of a high volume cluster on the comp and that conicides with a level we are trading I will expect either harder rejection or so much volatility so as to run us over on the rejection comgruence and better rotational conditions on the acceptance congruence. But you hit it on the head. When you are preying on retail mistakes getting trapped chasing breakouts at key levels as we do (you will see in #3), the comp is less important.

    -Our average trade with the trap setup is 1-1.5 points. With the institutional commitment setup 1.5-2 points. With scalping just 1-2 ticks. Big time pushes or pulls on the market don’t effect our trades much. Truthfully they really don’t do much other than cement the power of the level even more so it is enough to know about them. I’m still just as likely to have an opinion the level won’t hold in which case I’m not trading it anyway. See what I mean? That is the problem with analysis much beyond the reality that any level can be of critical importance. Somebody wins. Somebody loses. Try to be right because if you aren’t no analysis or filter will save you. Harsh but true. We win because we are right a lot about which levels to fade and which we leave alone because our gut, or sentiment, or something equally non-specific tells us so. So I look at the comps more out of habit than anything. We win our trades by the market respecting very recent levels and win on psychology and the volatility itself created by human emotion. Plus with our one trade a day per strategy and one hour trade limit for liquidity reasons we can’t filter much more. Even if we could I don’t know that any composite congruence could improve the typical monthy ratios for the 20 set-ups per strategy. The trap trade runs consistently in the mid-80s. Institutional commitment trades run in the mid to high 70s. Scalping well into the 90s. I wish I could tell you it was from sound technical filtering like the comp but I’m not sure it ever adds much to things. Sure makes you feel better to know they are there, but they are a bit like multi-TF biasing. If you recall from the 1st webinar higher TF congruence has never vetted out too well in our research. The comp is in that category as it relates to volatility and noise based trades. Remember, we aren’t betting any level is going to be a turn. We are just betting it holds for about half a typical rotation. Sort of like betting every third card in a deck will be black. Not too hard to make some money if you can keep a count…

  7. hi rob
    thx for the courage to tell your side of the story….it matters
    be in touch again soon

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