As you become proficient at reading order flow, you can get rid of all the aids and work with just the Volume Breakdown, Cumulative Volume Delta PLUS reading the Range Bars. The only additional indicator I have on my trading chart nowadays is the 33EMA as it tells me where I am. Of Course Market Profile is there to supply the context. The chart below is what I am using and I have noted today's trades on it.
But let's go back one step. Starting with the indicators is, I think necessary, to know what to see and to "see". The 2 CCIs allow you to see the momentum in 2 modes. The direction of the lines, whether they are above or below zero, how they interact with each other, is the market getting ahead of itself when, for example, the 6CCI leads the 45 by too much. All very important things. We look at the indicators together with the bars on the charts until we develop a feel for how the bars relate to each other and to the momentum we are measuring with the CCIs. If the CCIs are so good, why get rid of them? Because they are a derivative of the bars and therefore MUST lag somewhat. Getting to the PRIME information gets you in and out earlier.
The 33EMA divides the market for me and is a major support and resistance tool as well as a trend tool.
We then look at the order flow using the Cumulative Volume Delta and relate that too the range bars patterns and formations. The think I look at include things like: Do the range bars overlap? Are they going anywhere or is it sideways? Where are they in relation to the 33EMA and it's slope? Are they closing up or down? Are there any hammers or hanging men (candlestick terms)? All of these things create the picture. When I started the blog I emphasized the importance of "the picture". I think that perhaps the reason for this is easier to understand once you delete the indicators because the picture is all you have left.
As far ad the CVD is concerned, it's flow, its peaks and troughs and the relationship between them are all important. I often see divergence between a peak in price and the CVD. It tells me a lot.
I'll be posting my charts without indicators and try to add some notes about selected trades - the type of thing I talk to Kiki about. This is the real discretionary trading. When people use a lot of indicators there is a real tendency to try and mechanise the process. While it may look easier (and if you are auto trading you have to) mechanising discretionary trading gives only an "average" performance rather than achieving the high win rates and profitability many of you have commented about in responses to the blog. Perhaps now there is a better understanding of the difference between just setups (trades to consider) and triggered trades.
Today was a choppy day. I spent all day buying and selling crosses of the 33EMA as CVD was horizontal.
But let's go back one step. Starting with the indicators is, I think necessary, to know what to see and to "see". The 2 CCIs allow you to see the momentum in 2 modes. The direction of the lines, whether they are above or below zero, how they interact with each other, is the market getting ahead of itself when, for example, the 6CCI leads the 45 by too much. All very important things. We look at the indicators together with the bars on the charts until we develop a feel for how the bars relate to each other and to the momentum we are measuring with the CCIs. If the CCIs are so good, why get rid of them? Because they are a derivative of the bars and therefore MUST lag somewhat. Getting to the PRIME information gets you in and out earlier.
The 33EMA divides the market for me and is a major support and resistance tool as well as a trend tool.
We then look at the order flow using the Cumulative Volume Delta and relate that too the range bars patterns and formations. The think I look at include things like: Do the range bars overlap? Are they going anywhere or is it sideways? Where are they in relation to the 33EMA and it's slope? Are they closing up or down? Are there any hammers or hanging men (candlestick terms)? All of these things create the picture. When I started the blog I emphasized the importance of "the picture". I think that perhaps the reason for this is easier to understand once you delete the indicators because the picture is all you have left.
As far ad the CVD is concerned, it's flow, its peaks and troughs and the relationship between them are all important. I often see divergence between a peak in price and the CVD. It tells me a lot.
I'll be posting my charts without indicators and try to add some notes about selected trades - the type of thing I talk to Kiki about. This is the real discretionary trading. When people use a lot of indicators there is a real tendency to try and mechanise the process. While it may look easier (and if you are auto trading you have to) mechanising discretionary trading gives only an "average" performance rather than achieving the high win rates and profitability many of you have commented about in responses to the blog. Perhaps now there is a better understanding of the difference between just setups (trades to consider) and triggered trades.
Today was a choppy day. I spent all day buying and selling crosses of the 33EMA as CVD was horizontal.
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