Is order flow hocus pocus?

OrderFlowDashPro's AlphaReveal gives traders unprecedented insight into the order flow and order book. Tape readers, like myself, have claimed that reading the tape gives them an intimate feel of the market that we find extremely valuable for making trade decisions. Most people can see the value in this and the logic. But, some very skeptical people might ask: Is it all hocus pocus? 

No, the logic is very sound. Our software gives traders greater insights into the dynamics that impact the market. It isn't astrology. The data AlphaReveal surfaces comes directly from the market. It comes directly from people placing trades and orders. My other field of focus is programming. Programming involves coming up with an algorithm or step-by-step process for completing some action. Sometimes a program won't work as expected and that's when programmers use debugging tools to dive down deep and see what the code is doing on a line-by-line basis. By analogy our software allows traders to see what's happening underneath the charts which can lead to new insights.

As traders, we are agnostic to the meaning of the data. It is our job to derive that meaning. That is important and something we stress -- that other vendors trivialize. Tape reading isn't trivial. For example, intense buying pressure yesterday was met with large limit order traders taking the other side. This created high volume nodes that the market rejected. Often, the market will catch fire above a pivot high as stops are run. That's another pattern. During certain kinds of markets, those stops runs mark the highs or lows of the day. In other markets, they lead to continuation. 

Elite trading of any kind is difficult to achieve and even more difficult to maintain. In order to achieve elite results trading the tape then you must develop yourself to an elite level. But, even non super human traders can find great value in our software!  We find the problem is everyone wants to start at the elite level. Some also have misconceptions about tape reading. You can read the tape and place 40 trades per day or you can read the tape and place a couple trades per day or less.

Friday, November 06, 2015 8:16:00 AM

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Risk Disclosure:

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure:

Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.