An Introduction to Order Flow Trading

An order-flow trading has been a profitable mode of trading. It offers Professional as well as retail traders with information based benefits since it delivers the complex step-by-step analysis of Order Flow in the form of intuitive charts that can easily be understood. People have been confused about what exactly is Order Flow Trading(OFT).

OFT is not exclusive of other forms of trading. It simply focuses on trying to predict the prices of the stocks barely through pending orders of other traders. In proper anticipation of prices you need to make sure that the traders whom you are considering has to have large orders. They must be active market participants who have pending orders.

Frightening facts about Order Flow Trading

Trade gurus have been preaching the traders to trade what they see and forbid them from trading what they think. The market is not supposed move according to your thoughts and it should not. Picking levels can be a dangerous way to handle your trading which has been prohibited by the professional traders. But then, order flow trading cannot be done without picking levels. This is the reason why OFT has been frightening for many traders.

Traders who have been mentally picking up levels, watching the price charts at the same time only discovered that the levels were all blown away. However, things can be different with the use of tight stop losses and more importantly, if you cautiously consider the picking levels. Carefully decide your picking levels and use tight stop losses.

The Methods of Functioning of Order Flow Trading

Picking up levels is really a tricky issue. OFT requires proper analysis power which is missed by most of the traders. With the aid of proper training, technology and proper support only one can master the art of picking levels to carry on with OFT. There are methods of Order Flow Trading:

1. Identifying the apparent resistance levels along with the likely support to be confirmed by the price action once the price arrives the expected level is the trading method preached by the knowledgeable traders. This is one of the methods of order flow trading since the method depends on the expectation that there are lots of orders on the various levels.

2. The expert traders of order flow would trade bit differently. If you are among the ones who knows how to trade order flow then you will certainly not be waiting for the confirmation of price action before trading order flow. This is a pretty dangerous approach to OFT.

3. Wait for the close of hourly candle before you enter the trade.

4. Pick up the levels to enter a better price. This will help you in getting a better price as a result of which you will be set in profits much before the time when traders trading with price action enters the trade.

5. Use tighter stops to and place your stop in a much better pace. This is the advantage you can reap while trading with level-picking.

Trading against the given trend should not make you afraid. Obvious support and resistance can be formed through the previous highs and previous lows and this is how you pick up levels.