Trading order flow with thin markets using Jigsaw Trading tools

Trading order flow with thin markets using Jigsaw Trading tools

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hello and welcome to my video about trading fast and thin markets with jigsaw trading tool using the order flow concept first of all this is required disclaiming by US government in case your us residence or your citizens you should take note of this disclaimer I'm not an investment advisor I don't I do not provide you with information how to make trades it's just educational information you have to make your own decision and consult your financial and tax and revered visors and you should know that past performance is not an indication future performance however I'm not going to give you any past or future performance indications here whatsoever but this is what is required now we are over it so let's get started I want to talk a little bit about thin market first because as a user of jigsaw trading tools and a member of the group you are most likely exposed to traditional thick markets like Treasuries like indices like S&P 500 so what is the difference well first of all if you are used to see a fat figures on the ladder and you're not going to see that in teen market so the first characteristic is a low level of liquidity comparing to seek markets like a see 500 bones or many other markets but those two well those two categories are most notorious so you are you should be ready to see much lower number in case of gold you may see in nearest level to the inside bead and offer you may see just 35 contracts it's at times even one and some further away you should see something like 10 15 maybe 20 and sometimes maybe 50 but that's that's not what you would see during the call more times only doing faster moves faster moves is an as a second characteristic the skin distinguishing thin markets from sick markets and you should see like bursts of order for ten to twenty six at a time instead of two three ticks you're an active market face up to 50 to 100 tix your news release or larger liquidations especially it applies to market like gold or not gasps with most thin ladder and the less so to markets like crude but still crude is very active market so you should see faster and larger moves anal insert characteristic is a larger size of rotation it's a 30 to 50 tix on crude or in gold as opposed to eight twenty eight to twelve ticks on es so it's a rotations or legs whatever you want to call them it's a this zigzag patterns you normally notice on your chart as a characteristic of the market so how it differs on a more practical aspect how trading thin market differs from trade in thick market and how reading in market differs from reading thick market well sin market is definitely easier to manipulate as a sub product of having less liquidity so it's much much year to move market for large participants to the place they want to move to their own target going by their own agenda faster moves and changes on the ladder well if you used to see really thick markets like bonds or booms where a price stick in between two ticks going up and down between same prices for five minutes is and you can sit in your chair comfortably and read numbers how a number of water stacked changes how much order added much order removed how much traded on bead on ask well you you still see that in a thin market but it's almost incomprehensible to notice and analyze in time on one side and on the second side it's very difficult to use this information because since it's so easy to manipulate it matters very little so the only thing that matters is a tendency and how it changes but it's very difficult to notice this kind of change if you try to read exact numbers on a ladder and what what you should look you should look for some other telltale signs I'm going to review just now iceberg in the Virgin see if you used to call tops or bottoms or breakouts by noticing ice-breaking divergences you still can do that in a thin market but you well for once you have to configure your indicators too much larger numbers Oh much much much smaller numbers comparing two years but the thing is you I so we'll have too much of them or too little or none of them because they're everywhere it's small all scale and it's very hard to use this information iceberg divergence so basically my recommendation is configure for gold something like 50 contracts for iceberg and 50 for divergence and probably the same or a little bit more for crude because you only want to hear them when the really big things appear but you will you will see that anyways imbalance in actual market order straight it can give you a clue of importance when you have your ninja trader with jigsaw tools started and left run for a while and you can leave market to its own devices make swing highs and lows and this information is accumulated on your time and sales you can actually analyze it and it can provide you with some clue because for example if market goes up and then goes down so you have a high you have a swing high and you can look what kind of numbers were traded at the same swing high it only it's only good if you if you kind of flash data or the count before it happens and analyze it after it happens so you don't have confusion conflicting information from earlier price action in the same region but basically if you see market went up to some point and at this tip of the move you have a large number of market by orders traded against sell limits against asks but still it they did not go higher it gives you a good clue that someone is protecting this high from going higher so there is probably a stop order there or some kind of interest so it gives you a clue this price level is important and we want to trade important prices but about this little bit later huge imbalances on Lara are telltale signs basically this is one of the most on two most important indications that I use when the move starts when the move starts you will see huge imbalance you have to look for total numbers of beats versus total numbers of offers you can see this on time and sales on a jigsaw a version of Super Dome and when you when the big move is cooking and it may not even started to move and it doesn't mean you have to jump on this still stationary bandwagon but if you see like something on a on a beachside 50 contracts total and on a asked side on oversight you you see 241 difference for sure something is going on and it's most likely that market is preparing to make a move up despite and a large number of limit orders above the current market price because it's it's it's always a fight between buyers and sellers and someone is trying to protect someone is trying to protect marking from going up on the other side people who are buying sometimes it's like a market making activity they want to get out of the market and they get out of the market value by getting market to heat their cell limit and when it it matters little when we're in the middle of nowhere like in the middle of the swing that's why in on a previous point I said you can you should pay attention to the swing high swing goes where you can see this imbalances a different number of market order traded and when price gets there pay attention to imbalances on the ladder because there it matters third matters it matters because s large market participants start moving price and this levels for example we have swing high and price approaching it again making a double top and we see a big imbalance on a ladder a lot of cell limit orders a lot of offers but still market is moving up that's important it's still moving up it's not stopping it means there is a huge huge huge bind pressure but let's limit orders give you a clue about where the next move will go and how important is because if for example if you have like a forming double top but you you see like almost a balance ladder maybe twenty fifty percent imbalance it it means there is very little protection or fans going on and probably this level doesn't really matter and it makes no sense to trade but a little bit later about it how we can be traded so remember huge imbalances and ladder are important signs but only adds right places it does not matter in the middle of nowhere and last and but not least and actually the most important reconstructor tape it's a major indicator and i love it and i think jigsaw tools provide fantastic reconstructed tape that is far more superior than any standard tools basically what you want to see if you want to buy one to see a lot of by market orders large market orders so I set my reconstructed tape to reconstruct only large orders for it is the actual number for those orders depends on the market will market liquidity market volume being traded this session but for sinner and less liquid sessions i would put probably for gold I would put 10 and 40 output probably sorry sounds like that and for most liquid highly traded sessions I would probably double that and basically F if we have price made it for example double top pulled back but then we start seeing a lot of large buy orders block orders on a tape and price start racing up and getting close to this level potentially making a triple top that's a big sign of a breakout is going to happen because you see a large participation again if price is slowly crawling up and there is a mix of orders and nothing really big that's at the sign of warning probably you don't want to trade mark did you say chart yes I did say chart and I'm I do believe while you probably can trade thick traditional markets just from the ladder because it's it's slow and you can only check you know the volume profile on same dome on the same dome window and you can actually operate you know with volume file analysis you can find your v book and all this kind of stuff and you can actually see how it's going because it's relatively slow I think it matters me much less for sin market fast markets while I still use volume profile and then find it extremely valuable it's not enough and I need to use chart price action is a result of order flow absolutely and it's it's a footstep it's footsteps of order flow you see where it's been how it was reacting so while I'm not a proponent of classical technical trade you know all these e mais you know triangles hangman's candlestick analysis I don't say it doesn't work or it's not valuable I don't use it I know how to use it but I use it in just an opposite way because I know many people use it and I know where is a place ser stops and how classical or two dogs technical analysis tells them where to place stops entry and that gives a good clue where search for the order flow will come so basically you want to see chart but you want to see just a price action you should be able to see you know market sentiment without any indicators and that's what you want to know only you want to know market sentiment and you want to see where price been and where it was rejected where it was consolidated this is what you want to know imbalances are easy to spot with price action absolutely if you see you know a big run up huge spike and price immediately falls down you know it was a huge supply area there is a big imbalance market is not in any kind of balance and price was rejected but then if you see trying it again you have to think there is some force behind it and you should think what will happen if we go higher what should happen don't trade in the middle trade where the action is that's what I want to tell just forget about mid range what you should be wearing aware of what you should take note is where price was rejected where consolidations wear and where it could not sustain for a long time basically and you should forget about the mid range of course it's all depend on a timeframe you use but I think since we're day traders we should consolidate we should concentrate on session the current session you know like glow bugs or beat session we're trading and if we concentrate on the session it's so much easier because there is no so much difficulty cramming from this fractal concept where you know you look at the swing and if you look closer is with a lot of swings inside the swing and blah blah blah and if you look 1000 year chart you will see you know replicating structures and everything like that but if you just concentrate on a one session there is no problem like that you know like different trends you have sentiment you have swing high swing lows and what you should pay attention is to the swing high swing lows rejections absorptions within this session and forget about the rest and after the talk show me where the money is I will and I will give you some indications how I trade doesn't mean you should trade this way but it's a just for educational purposes I ate fast thing market was order flow and most importantly how jigsaw trading tools can give you an edge you know to treat the market because to be successful in trading fast Market you need to be really really fast and proficient because things change dramatically within one second in you you can't you know look and many different things you know trying to calculate numbers you need to be able to react really fast and I think jigsaw offers really nice opportunity to get this information fast in a nice way and especially you two as nice reconstructed tapes and voice warning so let's continue with some practical exam so let's have a look at the crude oil example at this rate it's already started but the premise for this trade is a brief break of a double top and the previous swing high was a seguir significant swing high and I expected to have some stop orders above and as you can see price approach this level with a really nice momentum push we had really large orders green waters by orders on a reconstructed tape as you can see we have some imbalance it's not so big difference but it was bigger and still large is almost almost two to one as you can see price to move in as long as balance imbalance will continue to be positive for our trade in this case it should be more offers than be significantly more of beads we still probably should stay in this trade as you can see we have a lot of green block orders by orders coming in and now we have our target field and it's still moving see it still moving so it's a good example of a trade and it gives you perspective to see how price action and indication should look like so you saw a lot of large by market orders on the tape and reconstruct the tip and huge imbalance and also you saw a large energetic pushes on the chart and here you see it was a significant high and before the large leg down in crude so people who actually got short on one on the first or second leg down there likely to put their stop protective stop-loss orders above this high right here yes and some people who trade reversals once we reverse of the bottom some people would place their by stop orders above so once price moved fast to our level usually it's a few ticks above high few chicks below low you should expect burst of order flow to take us into the trade and as long as we keep have those large buy orders keep coming and ladder to stay out of balance in our direction in this case more offers and beats we should be in this trade straight offers really nice probabilities are you see it's still moving it's it's such a nice level still moving really nice combination of profit versus loss so to stop when this trade stop was something like less than 10 ticks and you can see how far it moved it moved quite quite a lot so it's a nice trade but let's move on on to the next one okay here is an attempt to trade order flow on gold with jigsaw trading tools I have configured 66 second chart is one minute chart basically it's more for trade management proposals idea is to have entry from chart based on a chart zone that is likely to cause order flow because when or the flow is supporting the trade it moves so fast on thin market like gold or oil especially on gold is more thing and you cannot really read anything on on your dome so the only thing that you can actually comprehend is probably the tape and what i use a use reconstructed tape I don't use consolidated tape because again there is no time to read it because it is not one column another column is great to study in slower markets absolutely no doubt to God but it's pretty hard so I found that the reconstructed tape but tries to put together individual orders back into original large orders is the best you can watch so I have set it to the filter of 10 orders and configured to reconstruct on a large orders when reconstructed orders is at least often list in contract and alert me on large order sir above 20 so my intention is to take entry with rest in order based on the chart button and with confirmation from tape so when I want to sell blows low for example I want to price to approach it fast and have a lot of sales a large orders on on a tape then my intention is to use tape and the dome to manage the exit because exit is biggest unknown and the hardest to pull not the entry because with this kind of system you you never know where to exit upfront it can run 50 tix each control five ticks so basically what we want to see we want to see a big shift mark and sentiment we want to see shift on that tape so I want to see some large if I wave if I'm short I want to see some large pine orders start to come to close it and I want to see situation changing in the dome I want to see some if if if I can use some water stacking just put here here here and then I have straight bar over here hopefully I can see some water stacking and it can help me to find the right place to exit the trade again I have configured to alert me with large bits and offer above 20 contracts that's quite enough now market the thinning so because it's it's later in the day and we had a really big volume today actually quite unusual so now it's dropping so 20 contracts knowledge is pretty reasonable expectation of a large shoulder so let's see if we can get some move here there is a good indication of current bits and offers stacked so we can see is writ 140 contracts of beats and only 50 of offers actually in short very short term it have to be treated opposite and so if you have a lot of beads it's likely that market will go down in very short time frame because those are the orders people put to get filled on and the press mark it down in this situation get Field on those beats so it's it's kind of half market-making activity sometimes still contact EVT and they push for example they put some limit buys Bulow's law and they push market with sell orders with intention to to get field on their lawn position to get better few basic moves out in the slippage and without marking price up look like we're moving away potential entry there is a good entry here 350 or so it will be 35 to 4 me 352 let's see which one its first so let me come back when we get near one of those levels okay now have water field and we see some support you can see some supporting stuff protecting our entry and we can see it's moving pretty nicely put in back one tick from high protecting some profits will be a good idea or perhaps even go flat if you know now we have a lot of stacking on ask surgeries high chance to get it feel so we got filled on a half okay I perfect rate here's the third example of order flow trading the straight happened on twentieth of May was recorded real time as you can see basically what we had we had a market reversal faith faith and we had a down move over night from the market open on 5 p.m. previous day we made a sort of double bottom sitting on one of the important laws from one month ago on this huge down move and during this move from ADA higher high basically market was very bearish so Bears would have to come in this day during the overnight session early morning and I would short the market but they have to play their stop somewhere and also there are people sitting on their each enhance wanting to go along as they can see a possible reversal since market was moving down for so long time they are contemplating a possibility of getting a large long trade and staying it for for some time so basically I I can see two possibilities to go long and short however short be tricky because we did not reach the slow exactly we didn't match it exactly so there was some kind of fifteen to twenty six different I would prefer to have another low much closer to older low but if market is pushing heart is very down in this case it would be very very hard to get that low probably we would cross this previous low level without making a perfect double bottom first and the problems there is I you don't know where to place your order exactly so you shooting in a dark yes market is moving down big but the only possibility to trade this move is to place a large arch stop orders like 20 30 40 ticks and there is no guarantee of any sort you can win the straight because it can make another leg up and as a pullback before trying it again may make a double bottom so to trade with this order flow stopped and method you need to have very very precise indications indication of where your stop zone is in this case I find it much more beneficial to trade on upside because market was moving down the whole night people went short and short and shorts air stops are we're above the distinct higher high during the server night session so basically I'm I'm even not trying to get a double to open the situation I'm fine just to put my entry two tix above this previous higher high from earlier today this early hours because again I believe there is a large cluster of stop orders resting there from all those bears and what is happening now is exactly squeeze it's a bear squeeze short squeeze so as we get higher you know more and more bears get nervous they try to sell some of them you know try to average down they sell more and this is the reason as we get higher we see more and more limit orders people try to protect they try to get better prices their reasoning is that as we get closer to my stop order if I open another short my my risk on the straight will be very small compared to my initial risk so there is not so much additional risk but if I improve my entry price I average my enterprise app so if market will be rejected at this price it will crash down and I will win big as this is the reason to keep adding short but there is a strong market force market sentiment driving price up and this is what we should be looking for on tape we want to look for large buy orders as we get there and some sell orders because some people will be selling through the market orders as price get this or is it we want to see a lot of struggle before we get there we want to see a lot of struggle we don't want to see him today we want we don't want to see some pathetic price action we want to see a lot of a lot of moves a lot of buy and sell orders so it means this level is very important but then we want to see as we get closer and closer we want to see more buy orders and we want to see more in balance we want to see more in this case offers than the beads on on our ladder and our time and sales but let's see how it will develop as we get closer to our level okay we're getting closer and closer to our by order so let's see half a lot of green block orders on the tape we have beacon balance on our time and sales in our dome so all indications oh it's a big huge order but the problem is you see we got filled right on top of it and we're going to get stopped out and don't be worried because i use ninja with configured local scene 101 is basically it's a local simulation the move was so fast so violent it's huge move you can see it basically because it is configured with a big delay like six hundred millisecond it simulated the feel very late and right at the end of the move when you trade life your orders your stop orders are stacked on exchange you just should make sure you trade with right broker who pass through yours to exchange almost all brokers do that at least those who trade with ninja trader and you should be safe you should you could get some sleep ish but not so much and you should be winning in trades like that but if you have a look and the tape how much be large huge block by orders we seen there if you if you roll recording back you you could see how time and sales how ladder dome was reacting and you could see how different order stacking became how big and balance was and how it changed right at the end so at it and I hope you enjoyed my small presentation if you would like some other questions to be answered check me out on big mice Big Mike's trading forum and my nikka still are let me put it for you and just just just type in one of my treads and I will get it will get your questions answered bye for now

2021-01-16 21:16

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