00:01Hey guys, it's Dale here

00:03Welcome to the webinar

00:04I'm really glad that you are here

00:07Our flow can look complicated at first

00:09There's a lot of numbers, a lot of colors, and data flying around

00:11But once you know what to look for, it actually tells a very clear story about what's happening in the market

00:18And that's what today is about

00:21We will slow it down, break it apart, and look at how to use order flow to spot where real money is moving and how to get an edge that most traders never see

00:33So today, we are going to cover a full journey through order flow

00:38First, we will look at what order flow actually is

00:41Then, we will go over the platforms, data, instruments, and costs that you need to get started

00:51After that, we'll get into how to read Order flow, and then how to create your own order flow workspace

01:00From there, we will dive into trading setups and concepts

01:02This will be the biggest and most important part

01:04And after that, I'll show you real trade examples so you can see it all in action

01:12We will also talk about the most common mistakes that traders make with order flow

01:16And finally, I'll leave you with some practical tips on how to get started quickly

01:22So, what I prepared for you before we even get started, I want to do a little quiz so you guys can see where you are at right now

01:30And at the end, I'll do another quiz so you can see how we improved after the webinar

01:36All right

01:38So, let's start with the quiz

01:40This is the first question

01:42And the question is rather simple

01:44Look

01:47at the chart

01:49It is a footprint chart, and price went upwards and just hit a resistance area

01:51This resistance right here

01:54I want you to tell me if the price is going to react to that resistance or no

02:00So, think about it for a second

02:03Take a look at it and tell me if the price is going to go up or down from that resistance

02:09Okay, let me show you

02:12The price reacted to that resistance and went downwards from there

02:16Reason for that is that when the price hit that resistance, there was absorption right here

02:24This is something that's called absorption

02:26We'll cover that more in detail in this webinar

02:28The main idea behind the absorption is that in this case, sellers started to absorb buying pressure, and then they reversed price

02:40You can tell, because there are heavy volumes both on bid and on ask in this volume cluster at this resistance

02:45So this was a confirmation that the price is going to react to that resistance

02:53Let's go for the next question in here

02:57I want you to tell if the price is going to go up or down from this place

03:04Is it going to continue to go downwards, to drop even more, or is it going to go up? Take a look at those footprints here and make your mind on where you think the price will go

03:17Okay, let me show you

03:20Price went down

03:23Reason for this is that there was a failed auction right here, right here, and right here

03:29The failed auction is also represented by this red dotted line, which my software automatically draws, and when price is close to failed auction or in In other words, unfinished business, it likes to shoot past it

03:42So that's why the price continued downwards to test that failed auction right here

03:51Also, one other thing that showed us the strength of the sellers pushing the price downwards were those selling imbalances in this footprint

04:02By the way, if you don't understand a thing from this, what I'm showing you now, don't worry, I'll teach you everything in this webinar

04:11Last question, take a look at this picture and tell me, is the price going to go up or down? Okay, let me show you

04:26The price went up, and the reason for this is that there was a stacked imbalance right here, one, two, three, three imbalances on top of each other

04:38That's something that's called stacked imbalance

04:40And it often works as a support and resistance zone, right? The price reached this place and from there it went up

04:49So that was for the little quiz, and you know, you'll learn everything from the quiz in the webinar

04:56So don't worry, everything will be covered

04:57Now, what I like to do is to do a little introduction of myself because I haven't done that yet

05:02I'm Dale

05:07I've been trading since 2008, and in 2016, I founded a website, traderdale.com, where I taught thousands of traders how to trade like I do

05:12I'm trading with my custom-made volume profile or flow and VAP indicators, which I developed for the Ninja Trader platform and later for other platforms as well

05:25Currently, I'm an official Ninja Trader vendor, and I've hosted many webinars with Ninja Trader

05:29I'm also active on YouTube where I've published over a thousand videos, and I've written five Amazon bestselling trading books

05:36And, you know, truth be told, I'm not a big fan of talking about myself, but you can check out what our members have to say about me

05:45There are hundreds of reviews on Trust Pilot and Forex Peace Army

05:48So, just go there, search for Trader Dale there, and you'll find the reviews there

05:56But, um, really, the most important thing is results, right? So, what I do is that I post my trading predictions on TradingView so everybody can check them out and see how they play out

06:07There are over 1500 of them so far, and since 2016, they have a 67% win rate, and that's without any position management or order

06:21flow confirmation, no fancy stuff like that

06:23What I'd like to do now is give you guys a little present, and it is one of my books, a physical copy of my books, or VUP volume profile, proper trading, or stock investing

06:37You pick one, and I'll send it over, no strings attached

06:43Just, you know, go to the link which is on your screen now

06:47I'll also drop the link in the video description

06:50Go there, order one of those books, and I'll send it over

06:53I'll even cover the shipping, no strings attached

06:55Just get the book, I'll send it over, and enjoy it

07:00Let me know how you like it

07:05All right, so let's talk about order flow

07:10First, I'd like to cover what order flow actually is

07:12On your screen, there are two charts

07:15This one, that's a standard price

07:17action chart

07:18Everybody knows this one

07:20It shows price at time, nothing else

07:25That's it

07:30On the right side of the screen, this is an order flow chart, and it sort of gives a third dimension to that candlestick chart because it shows volumes inside those candlesticks

07:35So, as you can see on this chart, there actually are candles, and at each price level, there are also volumes that were traded there, volumes on bid and volumes on ask

07:53And this gives you the third dimension because you can see exactly what volumes were traded in each candle, which is very, very handy if you are an intraday trader

08:08It gives you all the detail

08:10You can see what everybody else is doing in the market, so nothing remains hidden

08:15The downside could be that many People just get stuck in the numbers and they try to decipher what every number means, and they just get, you know, lost in the details

08:25But don't worry about that

08:28In this webinar, I'll teach you how not to get lost in the details and how to read order flow without studying every single number which you see on your screen

08:37Now, order flow can have different looks

08:39This is one of them

08:42But what I actually prefer is this

08:47As you can see, there are more colors, and it helps me to read the order flow and to work out quickly what's going on

08:56If a cell is green, that means that basically buyers were more aggressive there in that cell

09:02If it is red, then it means that sellers were more aggressive in that cell

09:07So this way, I can immediately tell what's going on and who's dominating the market, whether buyers or sellers

09:14Another thing that this does is that it sort of highlights heavy volume zones, which are super important when trading with order flow

09:24So, heavy volume zones, for example, like this one or this one, are in a little bit darker shade of the color, right? If you compare it, for example, if you compare this with this, then you can see that there's a difference between the shade of the color, right? One is darker, one is lighter

09:41The darker it is, the heavier volumes are traded in that place, and that's important information

09:48So, basically, this is why I prefer this sort of visualization of order flow, but the information that this one gives you and that this one gives you is the same

09:54The volumes are the same

09:59You can see the candles in both of those visualizations

10:05So, in the end of the day, it's up to you which you choose

10:11If you decide to use my Orflow software, then you can switch between those quite easily

10:18Now, before you even start trading with Orflow, what you need to do, you need to have a platform where you trade with Orflow, and then you need to have data

10:27So, in here, there's a table with popular Orflow platforms

10:30There's the Ninja Trader platform

10:33It has the largest retail community

10:37It has many footprint or volume delta add-ons

10:40It's a little bit more complex to set up, but nothing I would be worried about too much

10:45There are two versions of Ninja Trader

10:48One is free

10:52And one costs $99 per month

10:56I'm actually using the free version, and you know what the paid version gives you is, you can trade through Ninja Trader

11:06And the second thing, you can use their order flow, their volume profile, and their VWAP indicators

11:14But because I have my own indicators like order flow, volume profile, VWAP, and others, I don't actually need to use theirs

11:20And also, I don't really want to trade through Ninja Trader

11:23I want to trade through my broker, which is IC Markets, and I want to trade through their platform, which is C Trader

11:29Because if you want to trade with Ninja Trader, you are basically stuck with brokers that they support, right? So I'm using the free version, I'm using my indicators, and I'm trading through my broker

11:42platform, this way you can use the Ninja Trader for free

11:47There are no other limitations to it, so I think it's perfect

11:50Anyways, the next one is Sierra Chart

11:54This one is also rather popular platform

11:58I must say that it is a bit outdated, so that's why I'm not really into it too much, and it's also hard to configure

12:06But, you know, upside is that they have really good data

12:11It's unfiltered, even historically

12:14So this is definitely an upside and reason why to use Sierra Charts

12:17The cost is not terrible, $36 per month

12:20But if I had to choose between Sierra and Ninja Trader, I would always pick Ninja Trader over Sierra

12:30The next one is ADAS, which stands for Advanced Trading Analytical Software

12:37It's limited to futures, crypto, and stocks

12:40It's quite user-friendly, and it's built specifically for order flow

12:47The cost is 85 bucks per month

12:52The next one is Quant Tower

12:56It has a smaller community, that means fewer tutorials, but it's quite modern and strong footprint and Delta tools

13:01So, this one is doable as well

13:06It costs 70 bucks per month

13:09The one that I've listed here, but I wouldn't really recommend using it, is TradingView

13:14I listed it because it's very popular, but the problem is that it lacks full tick data

13:21It's rather simple software for retail traders

13:24So, it's not really specialized in order flow, VWAP, volume profile like the rest

13:28You've probably tried it

13:33It's very easy to use

13:37It's very intuitive, and it hasn't included order flow in the past, but right now it does include Orflow

13:46I must say that I'm not really a huge fan of their Orderflow, but if you have Trading VF and if you have one of their higher plans, then you can give it a try

13:56The cost is $70 per month, and I think that's the premium one where the Orflow is included

14:05In the cheaper ones, the overflow is not included

14:10So, as I was saying, you need a platform and you need data

14:13So, let's talk about the data

14:16For intraday trading with Oraflow, you already need precise data, and you'll want the CME data

14:21There are a couple of exchanges, and you can pick one based on what you want to trade

14:30There's the CME exchange where you'll get data for the ES, which is futures for the S&P 500, for NASDAQ, for Russell currency futures and interest rates

14:42The cost is roughly 12 bucks per month

14:45Then there is Seabbot, where you'll get data for the DAO, for 30-year bonds, 10-year Treasury notes, corn, soybeans, and wheat

14:58Cost is also 12 bucks per month

15:01Then there's ComX, where you'll get data for gold, silver, and copper futures

15:08Again, 12 bucks per month

15:12Then there's NAX, where you'll get data for crude oil and natural gas futures

15:19Again, 12 bucks per month

15:26Or if you opt out for all of them together, then you can get that for roughly 30 or 40 bucks per month

15:32Now, what I'd like to show you is a little trick how you can get all the CME data for just four bucks per month

15:37So the first step is you open an account with Ninja Trader

15:44There a couple of things that you need to fill out

15:46The second thing is that you need to fund your account

15:50There's no minimum balance, so you can deposit, for example, 100 bucks

15:55The third thing, once you've done step one and step two, is you can purchase the CME data for just four bucks per month

16:03The only thing that you need to remember is that every month, you need to place at least one trade

16:09The volume doesn't matter, so it could be just the smallest order once per month, and that's it

16:18And if you do that, your account remains active, and you can get all the CME data for just four bucks per month

16:23I've made a video on this

16:28It's more detailed, it's step-by-step, you can follow it

16:33Uh, there's a link here, and I'll also drop the link in the video

16:37description, so you can check it out

16:41It will lead you through the whole process, and you can get the data for four bucks a month

16:44That's what I do

16:46Now, here is a little summary of what I recommend

16:49Uh, so I recommend using the Ninja Trader 8 platform, using their free version

16:54I recommend using the CME data for four bucks per month

17:01And regarding the trading instruments, this is my personal preference, and I like to trade currency futures and the ES

17:09So I recommend starting with that

17:12But obviously, if you are not into currency futures or the ES, you can trade anything else you want

17:19But, you know, this is just what I personally prefer and what I personally trade

17:23Now, let's talk about reading order flow

17:26There's one very crucial thing that I need to start with

17:29It could be a bit difficult to understand, but it's critical to understand

17:33Many order flow traders don't know this, and you know, until they learn it, they just, you know, keep on guessing and wondering why the market did this and why the market did that

17:44The thing is, bid and ask, and the difference between aggressive traders and passive traders

17:54So if you look at this footprint right here, at this picture, the left side of the footprint is called bid, and the right side is called ask

18:02Many people think that on the bid side, there are only sellers

18:10So if somebody shows on the bid side, they must be sellers

18:12It's not true

18:15It's only half of it true

18:17The bid shows aggressive sellers, that means sellers who enter their short position with a market order, right? But the thing is that the bid side could also show buyers, and it shows passive buyers

18:36So if somebody enters a long trade with a limit order, then it also shows on the bid side

18:42That's the tricky part

18:48That bid could show sellers as well as buyers, depending on what order they use, whether it's market or limit

18:54If you talk about the ask side of the footprint, then there are aggressive buyers

19:03Those are buyers that entered a long trade with a market order

19:09And there are also passive sellers

19:13Those are guys who entered a short trade with a limit order, right? So on the ask, there could be buyers and sellers as well, depending on what kind of order they used

19:27There could be buyers with market orders and sellers with limit orders

19:35So, in the end, the bottom line is, you can never be sure if the volumes you see on bid are sellers or buyers, and the volumes on ask, if those guys are sellers or buyers

19:48So, how do we tell? Well, it's all about context, right? For example, if price is dropping in a downtrend like this, there's no support standing in the way, then the volumes which you see on bid are most likely aggressive sellers pushing the price downwards, right? Sellers using market orders

20:11If the price hits a strong support, for example, here, and some huge order appears here on bid, then it's likely that it is a passive buyer who entered a limit long, right? It's all about context

20:31We'll talk about that, don't worry right now

20:34I know that it could seem a bit complicated, but I'll try my best to make it easy for you

20:41So, in this next part, I'd like to teach you how to read order flow

20:46And because I was saying that you don't need to focus on every single number that you see on the screen, I want to point out the most important stuff that you should keep your eyes on

20:56All right, the first thing, and maybe the most important thing, are volume clusters

21:04A volume cluster is a place where heavy volumes were traded

21:07It's important because big trading institutions usually reveal their trading activity in those volume clusters

21:15On the screen, there are two significant volume clusters here

21:19It is this one and this one

21:23When you see a volume cluster, it's usually a sign

21:28that somebody big was trading there, probably some trading institution

21:31The reason why those are important is that first, they are footprints of somebody big, and second, price likes to react to heavy volumes

21:42So, for example, if you take a look at this volume cluster, price moves away from it and makes a pullback, and when it goes back to the area where this volume cluster was formed, price reacts there

21:56So it worked as a support, right? Heavy volumes often work as strong supports and resistances

22:06So that's why the volume clusters are important

22:08They show significant support and resistances and activity of the big guys

22:17Now, I actually like to look for the volume clusters on this type of chart

22:23It is a footprint chart, which shows total volumes, which means bid plus ask, right? So the previous chart was showing bid and ask, but this one is showing the total bid plus ask

22:40Uh, for me, it's easier to read and easier to spot those heavy volume zones, right? This is the first one I was showing you

22:52This is the second I was showing you

22:54They simply stand out more visually

22:58It's easier for me to read the chart

23:01So that's why I use this kind of chart to look for those volume clusters

23:04If you look at this example, then we have a rather significant volume cluster right here

23:10What it could represent here is that when the price was dropping and reached this place, maybe there was some support here, somebody big started to trade here

23:22Heavy volumes were traded and Eventually, this resulted in a change of a trend

23:28It all happened around this significant volume cluster right here

23:35Again, I can show you this on that volume chart

23:38In my opinion, it's just better visible there, right? This is that volume cluster that changed the direction of the trend

23:48Now, speaking of the importance of heavy volumes, I also need to mention high volume nodes

23:53There is a high volume node in every footprint

23:59My software does a black bracket around that high volume node, and it's the place where the heaviest volumes were traded in each footprint, right? So, in each footprint, there is a high volume node, and it shows where the heaviest volumes were traded in that particular footprint

24:18I'm not saying that you need to trade every high volume node that you can see on your chart, but it's usually handy to know where the heaviest volumes were traded in each footprint, right? Especially if you have, for example, those high volume nodes next to each other like in here

24:35My software highlights that in yellow, and it represents support or resistance

24:39So, for example, in here, there was a pullback to this double high volume node, and the price reacted there, right? So you want to keep track of the high volume nodes as well, because as I was saying, and I'll probably say many times in this webinar, heavy volumes are important

24:59Always keep track of heavy volumes

25:05Now, another very, very important thing here is delta

25:10Very simply put, delta is difference between buyers and sellers and shows who is stronger, whether buyers or sellers

25:18If delta is positive, like for example, in here in this footprint, that means that buyers were in control in this footprint

25:28If delta is negative, like in here, then in this footprint, it means that sellers were in control, right? Delta is ask, that's the sum of those volumes minus bid, that's the sum of those volumes

25:48And my software prints the delta below each footprint

25:53So in each footprint, you can tell who was in control, buyers or sellers

26:00Now, needless to say, we have the limit orders which can mess things up

26:03They mess delta up

26:05So, it's not the holy grail of all indicators

26:08Otherwise, it would probably be, but it's not because we have the limit orders, which could mess things up

26:15But still, I consider Delta a very, very powerful tool, and I always keep track of it

26:24Now, speaking of Delta, I also like to use the cumulative Delta, which is nothing else than how the Delta was developing since the start of the day, right? So if you look at this picture here, then there's a summary right here at the bottom of the screen, and in here it shows the cumulative Delta

26:44So the first footprint of the day was Delta minus 62

26:51It shows in here, but it's not really visible

26:53It's hidden behind this

26:58Anyways, the next Delta is minus 10

27:03So minus 62 minus 10 is minus 72, right? That's the cumulative Delta minus 72

27:08It shows how Delta was developing since the start of a day

27:10The next Delta is Positive

27:13It is 12

27:16So, -72 + 12, that's 60

27:19Right? Now, I must say, this is quite challenging to keep track of if it's just, you know, numbers at the bottom of the screen

27:27That's why I use this chart

27:31It's also cumulative delta, but in this case, it is a simple line chart

27:34It shows the same thing, how the delta was developing since the start of the day

27:40If you look at it like this, it's way easier to read, right? One simple look and you know that cumulative delta is dropping and that sellers are in control

27:53Very, very simple and very, very effective

27:56I really like to use the cumulative delta

27:57I'll show you how later

28:00By the way, my software also gives you the option to use this line chart of cumulative delta rather than just, you know, the summary

28:07at the bottom, like in here, right? So, if you get my software, you'll get this one as well

28:13Very, very handy feature

28:19Now, another thing that's very, very important to keep track of are imbalances

28:25An imbalance is when one side of the market is way stronger than the other

28:30For example, buyers were way stronger than sellers, or sellers way stronger than buyers

28:36The definition of way stronger is three times or more, right? So, take a look, for example, at this footprint and take a look at this number here, 313

28:54It's highlighted in blue, that means that it is an imbalance, right? My software highlights those so I can spot them easily, and you always compare diagonally

28:59That's how you read order flow, like this

29:04So, you compare 313 to 96

29:10If 313, 13 is three times or more bigger than 96, which is then it gets highlighted in blue and it shows imbalance

29:21Sellers were way more aggressive than buyers in here

29:25If we look further in the chart, we have imbalance in here, then imbalance in here

29:33Those are selling imbalances because they are at a bid

29:36But there is, for example, buying imbalance right here

29:44It shows at ask

29:52That means that buyers were in control here because we are comparing 35 contracts and 108 contracts, right? So that's why it gets highlighted in blue because in here, buyers were more aggressive

30:01The way I use those imbalances is I often look for stacked imbalances, and stacked imbalance is where more imbalances are stacked on top of each other, like in this

30:13Footprint, you see all those blue numbers

30:21Those are imbalances

30:29If they are at top of each other, then they are stacked imbalances, and they often represent a strong support or resistance zone, right? Because this is a place where sellers, in this case, sellers were way more aggressive than buyers

30:38What my software does is it highlights those areas

30:41So, for example, in here, we have stacked buying imbalance, and it gets highlighted like this and represents strong support

30:51So if there's a pullback, the price is likely to react there

30:56All right

31:00This is how I like to trade the imbalances, I mean, the stacked imbalances

31:04So remember, imbalance or stacked imbalance shows aggression and strength of, uh, either buyers or sellers

31:14Now, as I was saying, it is very important to keep track of what the big picture is, and for that, I like to use volume profile

31:25Volume profile is that thing on the left side of the screen, this histogram right here

31:31And it is a daily profile which shows how volumes were distributed through the whole day

31:35One quick look and you know that there is a significant volume zone in here, another significant volume zone in here, light volumes in here, light volumes in here

31:48And this gives you the big picture, right? Which is so important when trading with order flow

31:53I know that order flow is all about, you know, the details, but it only works if you know what's going on on the bigger picture

32:04That's why volume profile is that important, and that's why it's also part of my Orflow software

32:08Now, what I like to do now is do a little summary of the things that I showed you

32:15There are a couple of them

32:17So right now, you can see all of them on one screen, and basically, if you open an Orflow chart, like for example, this one, those are the things that you should focus on and you should always keep in mind

32:30So, you should keep track of the volume profile, where the heaviest volumes are, and what important areas in the chart are

32:39You should also keep track of the heavy volume clusters

32:47Also, you should look for high volume nodes like this one, this one, this one

32:53Then you should look for stacked imbalances like those or those

32:54You definitely want to look for multiple high

33:00volume nodes like this one, this one, or this one

33:03You should keep track of delta below each footprint, and also cumulative delta, right? So if you open up an order flow chart, those should be the things that stand out

33:20Don't try to read every single number that you see on your screen

33:23That's no help

33:26You'll just get lost in that matrix

33:29Just read those things, and the order flow will start to make sense, right? It won't be complex

33:36You just need to know what to look for, right? And those are the most important things to look for

33:43Now, at this point, I like to show you my workspace

33:46You can copy it

33:48You can let it inspire you

33:51And here is how it looks right here on the top left

33:54Uh, there's a chart, which is a 30-minute chart, and it shows the total volumes

34:00So it's not a bit and ask chart, only total volumes on this chart

34:07I sort of look at the bigger picture, right? Because it is a 30-minute chart, I look for the significant volume clusters, like for example, this one

34:15I look at the volume profile, and as I was saying, this is the bigger picture

34:21Another chart which shows the bigger picture is this one

34:23It is something that I call trades filter

34:30It only shows single trades that were bigger than X amount of contracts

34:36So it filters out all the noise and shows only the big orders

34:38For example, here, one order of 182 contracts

34:44As you can see, in this case, this actually turned the trend from downtrend to uptrend, right? So this is the trades filter, very useful feature

34:55It also gives me sort of a bigger picture

34:58Then on the right side of the screen, there is this chart, and this one gives me a more detailed look because this is a bid and ask chart

35:07It is a five-minute chart, and I use this one to look for the order flow setups, to look for confirmation setups, to look for nuances

35:20I also use this one to look at deltas and oops, all the stuff which I'm going to show you today regarding, let's say, trade confirmations or other order flow setups

35:34So this is the detailed look into bid and ask, and the last chart, this one, it's a combination of two charts

35:41The first one is a one-minute chart of price, and below that, a one-minute chart of cumulative delta

35:49I compare those and I look for divergencies there

35:53So this is how the original workspace looks like

35:56And in order not to lose the big picture, I also have a volume profile chart with simple candles

36:04I have that on my other screen

36:06It looks like this

36:09And I have volume profile here, which is a weekly volume profile

36:11Then there's a volume profile, which I can move around like this

36:13That's flexible profile

36:16I also have a weekly VWAP here

36:18By the way, this is a 30-minute chart

36:21So this is the big picture

36:24I look for my levels here at first, and then I trade those levels with order flow

36:30So that's about the workspace

36:35By the way, if you guys would like to join our trading community, you get access to all those order flow indicators, to the volume profile indicators

36:41We'll also install everything for you, set

36:43Everything up, the workspaces, the data, the platform, everything

36:48If you want to join us, then head over to my website

36:49It is traderdale.com

36:51If you click trading course and tools, then it'll take you to this page

36:56In here, you can browse my education and indicator packs

37:00This is the Orflow pack, which includes a 12-hour course on Oraflow trading, my Oraflow software, and also my volume profile software, also tech support, which will install everything for you

37:16There are also other packs which you can get here, the volume profile pack, the VWAP pack, smart money pack

37:23You can get them separately in here, or scroll down a bit

37:28You can get them for a discounted price in here, all four together

37:30So this is how you can join us, but Let us now continue with the presentation because the next part is going to be really interesting

37:40All right, so in this part, we'll talk about order flow setups and concepts, and we'll start with my favorite one, which is called absorption

37:52Absorption is when unusually heavy volumes appear on bid and also on ask at the same time

38:01That means that buying or selling pressure is being absorbed

38:08I'm using a five-minute or 30-minute chart for this, preferably I would say the five-minute

38:12I use it more on a five-minute chart

38:15So if you look here, this is an example where buying activity gets absorbed

38:22So the price was going up, then probably hit some resistance here, and unusually huge volumes were traded both on bid and ask

38:31It's important that the heavy volumes are both on bid and on ask

38:39All right

38:46So we have heavy volumes on bid and ask, and this means the market is absorbing the buying pressure, and eventually, the buyers run out of fuel, and sellers take over, and the price goes down

38:54Right? So this is buying activity absorbed

39:00If you look at the next picture here, then the price goes down, and then there is this high volume node with heavy volumes both on bid and ask, and this means that selling activity is being absorbed here

39:17Right? Sellers are selling, pushing the price downwards

39:20But at this level, buyers step in, and they start to buy everything the sellers have to sell

39:30That's why the price stops to move, and from this place, eventually, the sellers run out of fuel and buyers take over and the price goes up

39:40So that's the absorption, right? The market is absorbing buying or selling pressure

39:45Very, very important thing

39:50This needs to appear in a support or resistance zone, not just anywhere

39:56So if you see a heavy volume node like this at a random place on the chart, it doesn't really mean anything, right? It's absorption only if it appears around strong support or resistance level

40:12This resistance level could be, for example, based on volume profile, price action, VWAP, or FIBO, or whatever you guys like to trade

40:19But this needs to appear around a strong support or resistance level, and it is a confirmation that the level is going to work

40:23Here is the first example

40:27Imagine that there was a resistance in here

40:31And by the way, resistances and supports are not just lines, they are always areas, right? Imagine that we had a strong resistance here and the price is reaching that resistance

40:46And when it reaches this area of resistance, you see this unusually huge volumes both on bid and ask

40:57Now, it doesn't need to be at one volume node or in one cell in the footprint

41:02It could be spread across multiple cells

41:04Actually, it's more often like this, spread over multiple cells

41:09But if you spot unusually huge volumes both on bid and ask here, here, also here and here, around the support or resistance zone, then it is the absorption, right? And you know, I don't have an exact definition of unusually huge volumes, but what you can do is Just look at the chart and compare it with what's going on in here

41:36Compare the typical volume, right? So, in here, for example, we have 962 contracts on bid, 789 contracts on ask

41:50If you look here, can you find volumes like that in here? No way

41:57So, this is unusually huge volume activity, right? And that's the absorption

42:03In this case, buyers are pushing the price up, but sellers start to sell in here

42:09They're absorbing the buying pressure, and that's why the price goes downwards

42:15Again, important thing, this needs to happen around a resistance zone

42:20Otherwise, it wouldn't really give us that strong confirmation, right? It wouldn't mean that much

42:24So, here's another example

42:28Again, imagine that we have a resistance

42:31For example, in here, this whole area is resistance, and when the price reaches that resistance, then you notice this unusually huge volumes both on bid and ask, right? Again, you can compare the volumes in this block with, for example, this area

42:58The volumes in here are nowhere close to the volumes in this absorption, high volume area, right? This is telling you that sellers are absorbing buying pressure

43:10Eventually, the buyers run out of fuel, sellers take over, and it is a signal for you to go short from there, right? It is a signal that this resistance is going to work

43:26Now, here's another one, a third example of the absorption

43:31Imagine that we have a strong support here

43:33Could be based on anything

43:35I like to base those on volume

43:37profile, but it could be, you know, whatever you guys like

43:43For example, price action setup

43:45The price reaches that level, or that support zone, I should say, and unusually huge volumes start to appear, especially in this high volume node, 549 at a bit and 359 on ask, right? This is something out of the ordinary if you compare it, for example, with this area

44:05So something out of the ordinary appeared at that support

44:12This is telling you that buyers are buying everything

44:16The sellers had to sell here

44:18That's why the price stopped, and eventually, sellers ran out of fuel

44:26Buyers took over, and boom, price goes up

44:29So this is the confirmation for you to go long from this support

44:35So what I'd like to cover now is confirmation by limit orders

44:40Now, at This place, I'd like to remind you that selling limit orders will appear here on ask and on bid, thereby buy limit orders

44:46All right

44:53So imagine then, in this scenario, the price goes up and reaches some resistance

44:59Let's say that there was some resistance zone again, let me mark it

45:05And in that resistance zone, what you notice is this 857 contracts

45:14That's a really huge number, right? If you compare it to the rest of what you see here, and especially when it shows up at a resistance

45:25So now you need to think, what is this telling you? Huge volume appears at a resistance, and it appears on ask

45:38It could either be aggressive buyers with market orders, or it could be a sell limit

45:45Now, remember, we are at a resistance

45:48So if somebody big, probably Some institutional trader jumps in with their trade in here

45:53Is it wise to enter a long when the price reaches a resistance? It makes no sense, right? Makes no sense

46:02It's more likely that somebody big was waiting with the limit order at this resistance level, and when the price reached that resistance, their limit order got filled, right? So in this case, it's more likely that this heavy volume order is a sell limit, and it is a confirmation for you to jump in that trade as well

46:13I hope that was clear

46:24Uh, let me show you another example

46:35If it wasn't clear, then hopefully this one will

46:37Um, so what you have here on this little chart, this is a price action chart, 30-minute time frame, volume profile, VWAP indicators, and in here we have This level, this support level, the blue line, it's based on the heavy volumes

46:57It is at the beginning of a heavy volume zone here, also at a place where the first deviation of weekly VWAP was

47:05So this was a support, right? I found this support on this chart using volume profile V1 price action, and then when price was close to that support, I opened the order flow software and I was looking for confirmation

47:23And since we are talking about limit orders, you can probably guess that in this case, the confirmation will be a huge limit order

47:30So here is how the price was dropping towards that support, the blue line that was the support, and when it hit the support, 1,046 contracts showed up just one tick above that support

47:51Now, you need to think, what This represents

47:57Since this is at bid, it could mean either an aggressive seller with a market sell order or a limit buy

48:09Which one is it? What's more likely? Remember, the price reached support

48:18So, is somebody big entering a huge short at a support? Not very likely

48:25What's more likely is somebody big was waiting at the support with a limit order, right? So, it's more likely that this is a limit buy, and that means a confirmation for you to enter the long trade

48:41All right? So, this is a confirmation by limit order

48:43Let me give you one more example of this so it's crystal clear

48:48So, what do you see here? If you look at the volume profile, then you can see that here is the point of control

48:52Point of control is essentially the strongest

48:58area or strongest place in the volume profile because it shows where the volumes were the heaviest through the whole day, right? So this is the daily point of control

49:06The volumes were the heaviest in that day

49:09Price likes to react to the point of controls

49:11So potentially this level was a support

49:19If you don't want to trade this blindly, you'll want to see confirmation on order flow

49:25So price goes away from the point of control, makes pull back to it, and as it hits the point of control, 678 contracts show up at bid

49:37And again, you need to think, is this a market sell or is it a limit buy? Well, since the price reached a support, it's not very likely that somebody big would go short at a support, right? So, it's more likely that Somebody big was waiting with a limit order at this support with a limit buy order

50:02So, it's very likely that this is a limit buy order and confirmation for you to go long

50:09All right

50:15And again, as you can see, this is an unusually huge number, compared to the rest of the volumes which you see here

50:22And nothing's not even close to this, right? So, that definitely stands out

50:29So, that's how you can spot a huge limit order

50:36Now, another concept is aggressive traders

50:39You want to keep an eye on those, especially when price reaches strong support or resistance zones

50:44So, imagine that in here we had a resistance

50:52Again, it doesn't really matter if it was based on volume profile or VWAP or whatever

50:59We had a resistance, and when the price reached that resistance, aggressive traders start to show up

51:04And since this is a resistance, you want to see aggressive sellers

51:12In this case, you can see the aggressive sellers mostly in here

51:14You can see all those selling imbalances

51:19That means sellers are way more aggressive than buyers

51:24So what happened here is that price hit that resistance

51:29There was some kind of absorption right here, first confirmation

51:31And then after the absorption took place, other sellers start to jump in with their market orders

51:39Those are the market orders, and that's what started to move the price downwards

51:45Those are the aggressive traders with their market orders, right? The volumes which you see on bid, those are sellers with market orders, and this is what drives the price

52:01Because if everybody was using limit orders, the price wouldn't really move

52:05The price moves because of market orders, because of aggressive traders, right? When aggressive traders are present, that's when the price starts to move, right? Because they trade with market orders

52:15So you can spot them like this, and it is a signal for you to join them as well to enter the short

52:26All right

52:28Again, this is important

52:31You want to keep track of this only when the price reaches strong support or resistance, then it could be the confirmation

52:34It's not like you see aggressive traders going up or down, and you, you know, push buy and sell whenever you spot aggressive buyers or sellers

52:43like this

52:44It's not like that

52:46You want to be patient

52:47You want to wait for price to reach some important area, some support or resistance, and then wait for your confirmation

52:54Could be limit order, could be absorption, could be aggressive traders

52:58So you need to keep an eye on that, but only around support and resistance zones, right? So again, let's imagine that there was a resistance here, and when the price hit that resistance, there was some kind of absorption

53:15But that's not really what I want to focus on now

53:19I want to focus on what happened next, and that's aggressive sellers, heavy volumes on bid right here, aggressive sellers, and then aggressive sellers in here as well

53:32Those selling imbalances, right? So those are aggressive sellers jumping in right after the level got confirmed with the absorption here

53:42They start to jump in, they want to join in that move that's likely to come, and you should do the same

53:50So when you spot this, then you enter the trade

53:53The sooner you spot it, the better, obviously, because when market orders start to jump in, it's usually quick, especially if the market participants are really aggressive

54:02So there's not usually that much time to act

54:06So you need to be quick, right? What I like to see is first confirmation of the level, for example, absorption or limit order

54:16And after that, what usually happens is market participants start to jump in

54:20So what you can do is when you spot the absorption, you can enter

54:25your trade immediately after that

54:28But if the absorption is not too strong, or if you're not too sure about it, then you can wait for additional confirmation

54:34And that could be the aggressive traders, other people, other traders jumping in with their selling orders, with their market selling orders

54:43Right? That could be the second confirmation that could confirm your trade entry, right? If you are, for some reason, not sure after the first confirmation

54:55All right, let's check out this example

54:58Imagine that we have a support in here

55:01The price comes towards the support, hits it

55:04Then might be this could be a buy limit order

55:07Might be this could be absorption

55:10Sometimes it's not so clear-cut

55:12So sometimes you may not be so sure

55:15about that confirmation

55:18So you want to see some additional confirmation, and it could be the aggressive traders

55:23In here, we have a beautiful buying imbalance in here

55:29This is actually a stacked imbalance because three imbalances are on top of each other, and we have another imbalance in here

55:36As you can see, the volumes on ask are rather heavy here, and it seems that buyers are way more aggressive here than sellers

55:47So those are the aggressive traders in this case, aggressive buyers jumping in, and when you spot them, you jump in as well

55:53All right

56:00So this is confirmation by aggressive traders, and remember, aggressive traders are using market orders

56:06So if there's an uptrend, then aggressive buyers show in here at ask

56:12If there's a downtrend, then aggressive sellers are here on bid

56:23Now, another order flow setup that I like to show you is big orders or confirmation by big orders

56:29And here is how it goes

56:32Take a look at this picture

56:34And this is the chart, the trade filter chart, where it only shows the big single orders, right? So it filters out all the noise, only shows the big orders

56:46And imagine that, for example, in here we have a support zone

56:53Price goes towards the support zone, and as it reaches it, a massive order appears in here

56:59And this is one single order

57:01So it's not an iceberg order, not a couple of separate smaller orders

57:04This is one huge order, 700 contracts at our support

57:11Somebody big jumped in right now at this support

57:15This is clear

57:19signal that this is an important level and a signal for you to go long

57:22In this case, when dealing with uh, those big orders, it's not that important whether it appears on bid or ask

57:36But you know, it's better if for a long trade entry, it actually shows here at bid because if it's at bid, then you can tell for sure that this is a huge buy limit order, right? But essentially, you just want to see a huge volume appear around the support zone, right? On this trace filter chart, then it's confirmation for you to enter the trade

58:01Let me give you an example

58:04Imagine we have a resistance in here

58:07The price hits that resistance zone, and in that resistance zone, 101 contracts show up on the trace filter

58:18Again, this is one trade, one signal

58:21trade

58:25Somebody just entered over 100 contracts here at that resistance level

58:28It is this at ask, so it's very likely that this is a huge limit order, a huge sell limit order, right? And confirmation for you to hit short

58:36So this is confirmation by the big orders

58:39Again, you need the trades filter

58:43My software does it

58:47With my software, you can easily filter out all the noise and track only the big orders

58:51I'm pretty sure that other software has it as well, but I can't really tell which one has it and which one doesn't

59:01So, TradingView probably doesn't have it

59:04Anyways, here's another example of the confirmation by the big order

59:08And imagine that we have a resistance in here, and as the price reaches that resistance, we have One order of 600 contracts, another order of 400 contracts, both on ask

59:29Very, very likely is that somebody big was waiting here with their sell limit order, and when the price reached that resistance, those limit orders got filled, and they went short, and so should you

59:41All right, so that's a confirmation

59:46By the way, a funny thing which I noticed here is that we also have 400 contracts in here and 600 contracts in here, and it's likely that it's the same trader quitting his trades here, right? So in this case, it wouldn't be a bad idea to actually do the same sell in here and then quit the position around here

01:00:13All right, trade with the big guys

01:00:17That's the whole logic of my trading approach

01:00:22Just follow the big guys who move and manipulate the market

01:00:24We are just, you know, small fish

01:00:26We can't really do anything

01:00:28But if we follow the big guys, then that's how we can make our money

01:00:34All right

01:00:40Another concept I like to share with you is the failed auction, or it could also be called the unfinished business

01:00:46As I was saying at the beginning, my software draws the failed auction lines automatically, like this red line, this red line, and this red line

01:00:57And what the failed auction is all about is that every footprint needs to have its high or low in a certain way

01:01:02So if you look, for example, at this footprint, then the high needs to look like this

01:01:11There needs to be zero at bid and then some number on ask

01:01:15This is how it should look like, right? Also, the low for Example here, the low should be some number here, and then zero

01:01:28The zero is important

01:01:31It needs to be like this, right? Zero in here, zero in here

01:01:34That's important

01:01:37If it's not like that, if the low of a footprint looks, for example, like this, where this number should be zero, but it's not, then it's a failed auction

01:01:47Right? The market should have continued a little bit lower, but it didn't

01:01:51It went up

01:01:55Auction failed because markets are always in auction, up and down, up and down

01:01:59It's always one never-ending auction, right? But this is a failed auction

01:02:03The auction failed, and that's why my software draws a line here, and the market likes to test those failed auctions because there are imperfections

01:02:10It shouldn't be like that

01:02:18So, the market likes to test

01:02:25them and create a successful auction, right? Now, I'm not saying that if the price is moving, for example, here, then you just go short from here because the price will want to test this

01:02:32Now, unfortunately, it doesn't work like this

01:02:34But what does work is when you have a failed auction or a cluster of failed auctions, like in here, we have three next to each other or very close to each other, and if the price comes close, then it's very likely that it will test that failed auction cluster and go below that, right? So this is how you can use the failed auction theory because when the price is close, it likes to test that, right? So let me give you a couple of examples

01:03:09For example, in here, we have a failed auction in here

01:03:13This is also a failed auction

01:03:17Right here, this is also a failed auction

01:03:18So we have a little cluster of failed auctions, and the price comes close and tests that, right? So let's say, for example, just, you know, for the sake of this example, that you are short from this place and you are wondering whether you should quit the trade in here for some reason

01:03:45But you see that right here, there is a failed auction

01:03:48Below that, there's another failed auction

01:03:49So you may want to hold that trade a little longer, at least one pip below the last failed auction, and take your profit in here, right? Because a failed auction is likely to get tested, especially if the price comes close to it

01:03:57It works sort of like a magnet

01:04:05All right

01:04:13As you can see, for example, in here and in here

01:04:16Again, failed auctions got tested, right? Or another example, we have failed auction in here, in here also some historical which is not visible, but we have those three lines rather close to each other and price went boom, testing all three

01:04:41On this example, again, we have those three failed auctions and see what the market does

01:04:48Tests that boom, right? When it comes close, it's likely to continue and test the whole failed auction cluster

01:04:59Or in here, a couple of failed auctions here from the past, and what the market did was boom, boom, went past all of them

01:05:08Funny thing is that it created a new one in here, but you know, market likes to test those failed auctions

01:05:16Now, another concept that I like to show you is trapped traders

01:05:20This is quite popular concept, and it's funny that it's actually called trapped traders because those traders are not trapped, but people keep calling them trapped traders

01:05:29So let's stick with that terminology and let's talk about them as trapped traders as well

01:05:33Here's what it means

01:05:36Take a look at this chart

01:05:38Price goes up, and then at this footprint, the order flow is giving you every signal that it should continue to go up, right? We have heavy volumes here at the top of this footprint, and those heavy volumes are at ask, which means aggressive buyers jumping in in here at the top of this footprint, right? So this is screaming at you that the price should continue to go up, but for some reason, it doesn't

01:06:08It goes down

01:06:10That's weird

01:06:11It shouldn't do

01:06:13This, right? So if the price doesn't go up, well, it's likely that it'll go down, right? There is not really any other option

01:06:21So basically, this is telling you that buyers started to jump in here, but then they didn't really follow through

01:06:31The big guys probably have different plans for the game

01:06:33And if it's not up, then it's down, right? Those guys are called trapped traders, like if they were trapped in their long positions

01:06:39Obviously, they are not

01:06:46They can quit their long positions anytime, but you know, people call them trapped

01:06:53Eventually, they'll have to sell, sort of fueling this sell-off

01:06:58But, you know, the sell-off is not just caused by those guys getting rid of their longs

01:07:02It's not the main logic is that you got clear signal that the market should go up

01:07:09It didn't go down, and that's a confirmation for you to go short as well

01:07:16Right now, here is another example of the trapped traders

01:07:22Uh, the price went slightly up, and at this point, we had a buying imbalance

01:07:30This is basically screaming at you that the price needs to go up, right? Buying imbalance at the top of this footprint, but funny thing, it doesn't

01:07:42Price goes down

01:07:44So if the price is not to go up, then it's likely to go down, right? Those guys are trapped traders

01:07:50They got trapped in their longs

01:07:55Price reversed

01:08:00They'll eventually have to quit

01:08:04And if the price did not follow through and did not go up, then you should go short because clearly the plan is not to go up, but to go down

01:08:09Now, one last example of the trapped traders in here

01:08:15You can see the price was dropping, and this was screaming at you

01:08:19Those selling imbalances were screaming at you that the price should go even lower

01:08:24By the way, those heavy volumes don't need to be at the low of the footprint, but should be close, right? It should be really screaming at you that the market should go down

01:08:36But if it doesn't in the next footprint, if it doesn't, then you should go long because those guys are trapped sellers

01:08:44Right now, here is one last concept that I like to share with you, and it's quite a popular one

01:08:52It's easy to spot, it's effective, and I highly recommend, if you want to start with one or two confirmation setups, then cumulative delta

01:09:01Divergence should probably be one of them

01:09:03It's very, very effective, very simple to use

01:09:08So, what you see before you are two charts: a one-minute price action chart and a cumulative delta chart

01:09:19What you want to see is divergence between those because, you know, very, very often, most of the time, they move in tandem, they move the same way

01:09:26But if they don't, then it's a divergence

01:09:34And remember this, price follows delta

01:09:39So, if in this example, the price goes up, at the same time, the delta goes down

01:09:47And by the way, don't mind the colors of the delta

01:09:49Whether it's green here or red, it doesn't really matter

01:09:51What matters is the direction of it, right? So, in here, we have clear divergence between price and delta

01:09:58And as I was saying, price likes to follow delta eventually

01:10:04So that's why the price dropped in here to follow delta

01:10:11Right now, there are people who trade this as a standalone setup

01:10:16I don't

01:10:21Uh, what I actually do is I like to see this when price reaches some strong support or resistance level

01:10:26Again, could be volume profile based, price action based

01:10:29But let's say that in this example, we have a resistance level, or I should say resistance zone, and price is going towards that resistance

01:10:44And as it is going towards that resistance and goes up, delta goes sideways

01:10:50That's already a divergence, but then starts to drop

01:10:56So we have a divergence, and when the price hits that resistance, there is already a divergence between price and delta, and that's a confirmation

01:11:08that this resistance is likely going to work because sellers are already entering their shorts and the price is likely to follow the delta, right? So the price is likely to react to that resistance

01:11:28That's how I use the cumulative delta divergence

01:11:30It's rather simple

01:11:33Let me give you another example here

01:11:36Imagine that we have a resistance in here, and as the price is going towards that resistance, it goes up

01:11:44Delta is already going down

01:11:49So sellers are entering their positions even though the price is going up

01:11:54So when the price reaches the resistance, that's when you want to go short, right? You don't go short when you see first signs of the divergence, for example, here

01:12:00You don't

01:12:06You wait for your moment

01:12:12You wait for the price to reach that resistance and this is where you go short, right? This is where you enter your trade

01:12:18Eventually, the price will follow delta

01:12:20The cumulative delta is a very, very powerful tool, even though it's just a simple line chart, but it is a very handy thing

01:12:28So, in this example, you can see also that there is a divergence between price and delta

01:12:34Price was going up and delta going sideways

01:12:37As I was saying, this is also a divergence when price is going up and delta sideways, right? Usually, they move the same, like for example, here they move the same, right? But in here, they don't

01:12:59There's a divergence and the price is likely to follow delta, especially if there's, for example, some resistance level the price hits that and then that's the signal for you to enter your short

01:13:13Now, one last example of the price and delta divergence

01:13:17Imagine again that we have a resistance here, and as the price is approaching that resistance, then in this area, there's a divergence between price and delta

01:13:34Price going up, delta going down, and that's the confirmation that you should go short from that resistance

01:13:42All right, simple and effective

01:13:48Now, so far, we've covered a couple of setups or concepts, and what I like to do now is do a little recap because there was quite a lot of them, and, you know, just to place everything on one screen and make it clear so you can distinguish clearly between, uh, those setups

01:14:03So, first setup we covered was absorption

01:14:10Absorption is when heavy Volumes show up both on bid and ask

01:14:13On this example, buying pressure is being absorbed and sellers take over

01:14:25Next, we covered confirmation by limit order

01:14:27In this example, the price was going downwards, hit some support here, and at this support, a huge order appeared on bid

01:14:39This is likely to be a buy limit order because it is a huge order appearing on support

01:14:45So even though it shows on bid, it's likely to be a buy limit

01:14:48All right

01:14:51So that's the confirmation of a limit order

01:14:53This is telling you to go long

01:14:57Then we covered aggressive traders

01:15:01In this example, price went up

01:15:04There was some kind of absorption here, and then aggressive traders started to jump in in here, in here, in here

01:15:10You can see that the bid is way bigger

01:15:14than ask

01:15:17So that's aggressive traders jumping in

01:15:20They really want to jump in with a market order so they don't miss the move, right? That's why they're using market orders

01:15:26So they saw the confirmation and now they want to jump in, and you should jump in as well

01:15:31So go short from there

01:15:35Next thing we covered: big orders

01:15:40You see those on the trades filter chart where you filter all the noise out and see only the big orders

01:15:44In this example, price was dropping down, it hit some potential support here, and confirmation was this massive order, right? Massive order, one order, remember? Then the trade filter shows single orders, not icebergs, not separated orders, just one order of 700 contracts right here at that support

01:16:06So That's confirmation to enter your trade

01:16:13Next thing that we covered was failed auction

01:16:15Failed auction is when footprint ends like this, or like this, or like this

01:16:24Auction is not ended properly, and if the market is close to that, it likes to test that, that means go past that, right? So this is how you can use the failed auction

01:16:36Another thing was the trapped traders

01:16:41Trapped traders is when the market is giving you a clear signal that the trend should continue

01:16:46There's a heavy volume activity screaming at you that the price should continue to go up, but it doesn't

01:16:53The next footprint is bearish

01:16:56So if the price is not going to go up, then those guys are trapped buyers, and the price is going to go down

01:17:02All right

01:17:08And the last thing that was the delta divergence, where you look for divergence between price going one way and delta going the other way

01:17:15The logic behind this is that price eventually always follows delta, like this

01:17:22So when you see a divergence, especially around strong support or resistance levels, it's a beautiful and effective confirmation that you should jump into your trade

01:17:30All right, guys

01:17:38So, so far, we've covered quite a lot of stuff, and what I'd like to do now is put everything together and show you how you can put it to use

01:17:46And I'd like to demonstrate this on a couple of real trades

01:17:49So, let's first take a look at this trade, trade number one

01:17:54This one was on the Euro futures

01:17:57This chart on the left is a 30-minute chart, and first, let's start with The reasoning behind, uh, the trade entry

01:18:07So I used volume profile here to identify this significant volume zone, and this was a support from which I wanted to trade

01:18:16The reasoning was that there were heavy volumes formed within a strong uptrend

01:18:22So that's basically telling you that buyers were active here as they were pushing the price up this significant volume zone here

01:18:28So this was reason number one for this support

01:18:34Another thing was that there was a fair value gap right here, that's from smart money concepts, and those two things were basically the reason behind the support

01:18:43Now, stop loss was in a low volume area

01:18:46I like to place my stop loss in a low volume area like this or behind a swing point, but in this case, it was behind this heavy volume area

01:18:55So this was the stop loss, and I planned to take the take profit at the VWAP

01:19:01VWAP, generally speaking, is a good place for a take profit because it works sort of as a magnet, right? In this case, this was a weekly VWAP

01:19:13So this was the original setting, how I planned, uh, the trade, right? Now, on the right side, what I want you to take a look at is this chart

01:19:26This is the price versus the cumulative delta, right? So as the price was reaching my level, right here, was going towards the level, and the level being this blue line, at the same time, delta was rising

01:19:44So we have a divergence between price and delta

01:19:48As I was saying, this is one of my favorite trade confirmations, and as you can see, it worked like a charm because the Price hit that level and from there immediately went upwards, right? Price likes to follow delta

01:20:06And in this case, this was the only confirmation and, you know, I didn't really need more

01:20:11This is a strong confirmation, right? So, you don't need to have multiple confirmations or have the perfect confirmation

01:20:19This is enough, right? Good support confirmed by divergence on delta

01:20:24That's all I need

01:20:29So that was trade number one

01:20:33Now, let me talk about another trade here, and this was a trade on the Japanese yen

01:20:40So this is Japanese futures and a 30-minute timeframe

01:20:43First, take a look at this chart

01:20:45And on this chart, you can see that there were heavy volumes formed in here in this little rotation followed by this aggressive selling activity

01:20:55This is telling me that sellers were active here, accumulating their short positions, and then they pushed the price aggressively downwards

01:21:04This is a setup which I call the volume accumulation setup, and the price usually reacts to it like this, right? So this blue line here was a level from which I wanted to trade, but I was waiting for some kind of confirmation on the order flow, and in here, we actually had a couple of confirmations which was quite cool

01:21:28First, I like to focus on this five-minute chart which shows bid and ask

01:21:34This blue line here, that's the resistance, and after the price hit that resistance, there were these unusually huge numbers on bid and on ask, and as you probably know, this is the absorption, right? Buying pressure got absorbed in here and as a signal to go short

01:22:01But that was only the first confirmation

01:22:02The second one was right here on this filtered chart

01:22:06This is a 30-minute chart again of the same symbol, obviously

01:22:11And price went up towards that level, the blue line that was the resistance level

01:22:19And after it hit that resistance level, what showed up here was this 165 contracts with one order, right? Remember, this is just one order

01:22:30And very likely, this was a limit sell, right? Because it appeared on ask and also around a strong resistance

01:22:40So it was very likely that this was a big limit order of somebody big to go short

01:22:50So that's another confirmation

01:22:53And finally, third confirmation was on the cumulative delta right here, where this was the resistance

01:23:02This is how the price was approaching the resistance, and at the same time, delta started to go sideways, and here it even started to drop a little

01:23:14So there was a divergence on the cumulative delta, divergence between price and cumulative delta, right? So, we had three confirmations that this level is going to work, and this was the reaction

01:23:33Unfortunately, I had to quit that trade a little bit earlier because there was the end of the week, and I never hold my intraday trades during the weekend

01:23:41So, I had to quit the trade, uh, in here

01:23:48Now, on this example, we have just two charts

01:23:51This is a 30-minute chart of the ES, and this was where I made the original analysis

01:23:59This is where I found my support level

01:24:01The support was based on weekly point of control

01:24:05If you look at the gray volume profile, then it's the widest in here

01:24:11That means that this is the weekly point of control

01:24:14That's a very, very strong level

01:24:17Also, there was a little fair value gap, which is a sign of aggression of buyers

01:24:23It was just a small one

01:24:25So the biggest reason really behind this trade was the weekly point of control, and also very close to it was the weekly VWAP line

01:24:35All right

01:24:45So when the price made a pullback into this support area, I wanted to see a confirmation, and the confirmation came in on this chart, which is the trades filter right here

01:24:54This was roughly the support zone, and at that level, over 1,000 contracts appeared here on the trades filter

01:25:04So this was a huge order

01:25:07Somebody big jumped in right here, and that was the confirmation for me to enter the trade

01:25:16Ideally, it would be better if that huge order was in here at bid because it would be a clear sign that this was a limit order, a buy limit order

01:25:25In this case, it was an ask, so it probably was a market order, which is kind of weird, but ES is quite liquid

01:25:34So it's quite possible that somebody actually was able to enter over a thousand contracts here

01:25:42And as I was saying, this was a confirmation to jump in that trade

01:25:44As you can see, uh, the reaction was just beautiful

01:25:49The stop loss for this trade was behind the heavy volume zone, and a take profit was this volume cluster right here

01:26:04So the trade went from here to Here, if I wanted to trail this or take a second take profit, I would probably take the second profit as the price reached this second heavy volume zone, right? But generally speaking, I like to place my take profits before a barrier which I consider heavy volumes

01:26:13I consider those barriers

01:26:23So, take profit before that barrier and stop loss goes behind the barrier

01:26:32And the barrier in this case was this heavy volume zone

01:26:35So that's why the stop went behind this barrier, right? So this was the stop, this was the take profit, and this was the trade entry

01:26:45Now, let me show you one more

01:26:54And in this case, we are looking at the chart of Euro futures, and I found the strong support on this chart, which is a 30-minute chart, which shows order flow and it shows

01:27:04total volumes, and as you can see, there was strong rejection of lower prices here

01:27:08And within that rejection, there was this significant volume cluster, right? You see how it stands out, right? This is probably some big algorithm jumping in, reversing the price, right? So I wanted to trade from that

01:27:23So this was roughly that support line, or, you know, as I was saying, it's not just one level, but it's a general area

01:27:35But I draw those in my charts as simple lines, but I know that above it and below it, I could also look for those, uh, confirmations there

01:27:45So I want you to take a look at this chart

01:27:51This is a bid-ask chart, five-minute chart

01:27:54The price was approaching the level, and the first thing that I noticed here was that below this footprint, which was in a downtrend

01:28:04Uh, there was a positive delta, which is kind of fishy, right? Because when the price is dropping, there usually is negative delta, right? But in this case, there was positive

01:28:15So that was like the first sign that there could be a reaction to this support

01:28:19Also, as the price reached that level, you can check out this trace filter chart and see that there were one order of 77 contracts here, very close to the level

01:28:31So somebody big jumped in, possibly with a limit buy order, going long from there

01:28:38So that's another nice confirmation here

01:28:42And a third one was those aggressive buyers jumping in

01:28:49As you can see, those blue numbers, they represent buying imbalances

01:28:51That means aggressive buyers were jumping in, right? The price hit the level and then boom, boom, boom, aggressive buyers started to jump in because they wanted to participate in that trade, right? And after that, the price just shot upwards

01:29:11So those are the confirmations I used for this trade

01:29:13Uh, the take profit for this one was uh around the point of control

01:29:20If you look at the volume profile here, then point of control is a good place for a take profit or a little bit below it, just, you know, to make sure

01:29:30And my stop was in here

01:29:37That was the low of this rejection area

01:29:41So this is how you can use what I taught you in your real trading

01:29:43As you can see, I'm using a couple of confirmation setups to confirm my trade entry

01:29:48It's not always the same setup, but you know, you don't need to use all of them

01:29:53them like I do because I've been using this for years

01:29:57So you can start with one or two confirmation setups, you know, get comfortable with them and then build on that, right? And regarding those levels, I'm publishing those levels for our members

01:30:11So if you guys want to join us, then go to my website, join our team of traders, and then you'll be getting those levels which I'm going to trade in advance

01:30:21So you'll have those lines on your charts and you'll know exactly where I'm going to trade that day, right? Now, at this point, I'd like to point out some common mistakes that beginner traders do when trading with order flow

01:30:39And the common mistake number one is overanalyzing every footprint

01:30:42And I know I was talking about this couple of times

01:30:47during this webinar, but this is really important because so many people just focus on every single number they see on a chart, which is clearly insane

01:30:56What you should focus instead are the big things, and the things which I showed you at the beginning of the webinar, which is, for example, heavy volume zones, significant volume clusters like this one or like this one

01:31:12Those are the things which should stand out, you know, when you look at the overflow chart, or for example, this one

01:31:19You should take a look at what the delta is doing

01:31:24You should look at the imbalances here, or here, or here

01:31:30Those are trapped traders here

01:31:34So, keep an eye on those as well, stacked imbalances like those, because they represent strong support and resistance zones like in here

01:31:43As you can see, the price made a beautiful reaction to that

01:31:48So, keep an eye on those important things, the big things, not every single number, right? So don't overanalyze the overflow

01:31:57It's a mistake that so many traders do, but don't do that

01:32:04What comes hand in hand with that is mistake number two, ignoring the big picture

01:32:11And that's why I think it's very important to have charts like this on one of your screens where you see the big picture, where you have weekly volume profile, where you have, let's say, a 30-minute timeframe, and you can also have a weekly view up or something similar, which is showing you the bigger picture, right? You need to see what's going on from the bigger perspective before you dive

01:32:38into the details of order flow

01:32:41You can also use something like this

01:32:45This is also a 30-minute chart, but in this case, it is a footprint chart, but it still shows you the big picture because there's the volume profile, and also you are seeing that there are those heavy volume clusters that are very important in your decision-making

01:33:01So this also gives you sort of a bigger picture, right? So have those on your screens

01:33:07It will definitely help to see where the market is going, what it's doing, whether it's rotating or trending, where are the big levels, where are the significant volume zones, stuff like that, right? And you need to see that before diving into the details of order flow trading

01:33:25Now, common mistake number three is misunderstanding the bid and ask

01:33:32We talked about that a couple of times today

01:33:34I just wanted to make sure to mention it again because this is really, really important

01:33:38So, just to repeat it once again, on bid, you can have aggressive sellers with market sell orders, as well as passive buyers with limit buy orders

01:33:52On ask, there could be either aggressive buyers with market buy orders or passive sellers with limit sell orders, right? Keep that in mind

01:34:05Now, another mistake is that when people think that order flow is not just for intraday but also for swing trading, it's not

01:34:17People keep asking me that if they can use order flow for swing trading

01:34:22No, this tool is good for intraday trading or for scalping, but for swing trading, There are other tools like volume profile

01:34:31You know, if you want to trade with order flow, you can use, for example, the tick charts or one-minute through 30-minute time frames

01:34:39That's like the maximum, right? If you want to use higher time frames, like let's say hourly, four-hour, daily time frames, then the order flow is not the tool for that

01:34:51The tool for that is something which shows the bigger picture, right? That's the volume profile

01:34:56Now, another common mistake is that people think that if they trade more markets with order flow, they'll have more winners

01:35:04But the truth is, they probably won't

01:35:09Markets differ in so many things

01:35:12They differ in average volatility, typical volume, time of activity, when most traders are active there, or things that they react

01:35:21to, you know, different setups, different kinds of news

01:35:26So every market is different

01:35:29You can't apply the same thing on every market

01:35:32Yeah, you can apply the same principle, but for example, the volumes will be completely different, the volatility will be completely different

01:35:40So that's why I highly recommend focusing on one or two markets

01:35:43Take a look at those two tables here

01:35:46The first table shows average daily volatility

01:35:53For example, the crude oil average daily volatility is 7%

01:35:58If you look at the Euro futures right here at the bottom, then the average daily volatility is only half a percent

01:36:06You can't really trade the same way those two instruments

01:36:09You can't

01:36:11You need to become professional on trading just one

01:36:14or two, right? Just focus on a couple of them because they are clearly very, very different

01:36:20Volatility is different, also the average daily volume

01:36:25So if on the crude oil, typical daily volume is over 1 million contracts, whereas for example, on the euro futures, it's only 150,000 contracts, the charts will look completely different, the volumes will look completely different

01:36:41If, for example, you wait for uh confirmation by absorption, then the absorption will look completely different on crude oil than on the euro futures

01:36:52The volumes will be completely different, right? So you need at least roughly to know what typical volumes are on that instrument you are trading, right? So that's why I'm saying that you should specialize on one or two markets, and one very, very interesting fact here is this one

01:37:13There was a survey that one of the top prop firms made, and it said that the top 6% of traders were taking 43% of total payouts

01:37:18Trade only one market

01:37:24This is insane, isn't it? Read it again

01:37:30Top 6% traders, top traders, the best traders, those are taking 43% of all the payouts

01:37:40Just a couple of traders, just 6% of traders

01:37:42And those guys, those top traders are trading just one market

01:37:49So learn from them, right? Don't try and take many trades with the goal of multiplying your winners

01:37:59Chances are that it probably will end up the other way, and you won't be as successful as you plan

01:38:04So stick to one or two markets

01:38:06That's my best advice regarding this I can give you

01:38:10Now

01:38:13Another thing that people keep asking me about is questions about level two data

01:38:17For some reason, people still think that they need level two data if they want to trade order flow

01:38:25The difference between level one data and level two data is that level one data shows executed trades, and level two data shows market depth, or in other words, pending orders

01:38:39So, order flow is showing you executed trades, trades that somebody actually executed, that actually went to the exchange, and that they were actual trades, right? Somebody was trading with their intent to buy or sell, and they executed that trade

01:39:00That's what level one data shows

01:39:03That's what order flow shows

01:39:07Level two data is pending orders, but pending orders are orders, which are very, very often not executed

01:39:13And here you can see DOM, the depth of market, and those are the pending orders

01:39:22And for example, if an algorithm wants to manipulate the price to go up, what it does, it places pending orders here in order to lure the price to go up

01:39:31But if the price starts to rise and it's getting close to that pending order, they withdraw their pending order, right? So it's not actual intent of trading there

01:39:47And that's the big difference because order flow shows actual trades

01:39:49The DOM, or the market depth, or the pending order are not actual trades, right? So you don't need level two data, just level one

01:40:03Now, we've covered quite a lot of stuff, and now I'd like to give you a couple of tips to get started

01:40:06Quick

01:40:10So, first step, there's no avoiding this setting up

01:40:13You need to install the platform software, connect data, then you need to set up the indicators and create the workspaces

01:40:24Well, when I was saying that there is no way around this, there actually is

01:40:28If you join us, then what our tech team will do is they'll do this for you

01:40:34So, you actually don't need to do this if you join us

01:40:35Anyways, that's step number one

01:40:38Step number two, pick one trading instrument that you want to focus on

01:40:44I recommend the Euro futures

01:40:46That's my favorite

01:40:48My setups work best on that

01:40:50So, if you want to pick one, I recommend the Euro futures

01:40:56Step number three, you need to learn the basics, how to read the order flow, and that's the stuff which I was showing you at the beginning

01:41:04So that's spotting the volume clusters, reading the delta, spotting the imbalances, all that stuff

01:41:10You need to learn that

01:41:13So you just go through the charts and pick the stuff up, and after some time, they'll just, you know, pop up to your face, and reading order flow will be easier

01:41:24Um, you simply need to be able to understand what the order flow is telling you before you start placing trades

01:41:31And step number four, I recommend picking one or two setups and focus only on practicing those

01:41:37Could be, for example, the absorption setup, and you can look for it around strong volume zones, right? So, for example, you use volume profile to identify significant volume zones or daily points of control or weekly point of controls, something like that, strong volume profile levels

01:41:58And when the price comes to those levels, then you open the ORFL software and look for one or two setups to confirm your trade entry

01:42:07Could be, for example, the absorption setup, or if you want to pick two, could be the absorption and then, for example, the cumulative delta divergence

01:42:18Those two are rather easy to spot, easy to learn

01:42:21So we can, for example, start with those two

01:42:23All right

01:42:25So those are the tips to get started quick

01:42:28And now, what I'd like to do, I'd like to do a little quiz to see how you improved by watching this webinar

01:42:36Question number one, I want you to tell, what is the most important place on this chart? What stands out? What should strike you in The eye as an order flow trader? So if you look at it, it should be this volume cluster and this volume cluster

01:42:57At least for me, when I look at this chart, those sort of pop up to my face

01:43:02Those are, for me, the most important places I should be aware of

01:43:08Now, next question: Is the price going to go up or down from here? I'll give you a second to think about it

01:43:21And price goes up

01:43:25The reason why it goes up is that there were those buying imbalances, aggressive buyers showing up

01:43:32So this is telling you that there's strength on the buy side, that there are aggressive buyers, and that they'll probably push the price up

01:43:42Another thing to notice, and if you notice that, I congratulate you, it is a failed auction right here, and eventually the price, if it's Close, it might want to test that

01:43:55Right now, here comes the last question

01:44:01I want you to tell me if the price is going to go up or down from here

01:44:10The price goes down, even though at this point it looked like it would go up because there were heavy volumes on ask

01:44:18So, it looked like market orders of buyers going long

01:44:22There was even this imbalance here, buying imbalance

01:44:28Let me go back and show you right here

01:44:33The next footprint was bearish

01:44:37So, this is telling you that something's fishy about this because the price should go up, but it doesn't

01:44:42It goes down in this footprint

01:44:45So, those are trapped buyers, and that's why if the price is not going to go up, we've got trapped buyers and the market goes down

01:44:50All right, so that's about it

01:44:55I hope you Guys liked the webinar

01:45:01I know that there was a ton of stuff here

01:45:03You can replay this anytime

01:45:05You can go over the webinar again and again

01:45:07Pick just the stuff you want to learn

01:45:09I'll make those timestamps so you can look for only the stuff that you are interested in

01:45:16By the way, if you guys want to join me and my team of prop firm traders and trade with us every day in the live trading room, then you just go to my website, which is traderdale.com

01:45:28And if you click FTA, that stands for Funded Trader Academy

01:45:36Then in here, you can read about it

01:45:40There's also a video at the top where I talk about the Funded Trader Academy

01:45:44What I recommend is clicking this button, talk to a mentor, and we can have a chat

01:45:51We'll walk you through the service

01:45:53Tell you everything about it, answer your questions, and see whether it's a good fit for you or not

01:45:57And then you can decide whether you want to join us or whether this service is not for you

01:46:03All right, so check it out, give us a call

01:46:06We'll be looking forward to talking with you, and we'll be super happy to welcome you on board if you decide to join us

01:46:13All right, so thanks again for watching the video

01:46:15Thanks for sticking out until the end

01:46:17I know this was a long one, and I'll see you next time

01:46:22And until then, happy trading.