Many futures traders have embraced Market Profile* as a method for understanding value. A significant other portion of traders have embraced price action. AlphaReveal really excels in surfacing unique volume information that can be used by both price action and volume profile trained traders. The ability to see how the price action, overall volume or activity, resting limit orders, and order flow work together proves extremely compelling and provides exclusive benefits.
A short setup that makes use of order flow and price action is described below:
General selling activity or weakness. This can be measured by using the summary stats on the Volume Inventory Tracker display.
Light buying at a new high. The VIT is extremely useful for reading this.
Dominant selling activity comes in. The order flow that is dominant can be tracked by using the OrderFlow Monitor with the PressureVolumeTM.
Sell at market or use the Q-TrackerTM to pick a spot for a limit offer. The Q-TrackerTM shows where traders are pulling or adding bids and offers.
One of the misconceptions about order flow trading is that it requires the trader to be be very aggressive. While it is true that sometimes being aggressive works well, there is a real benefit in watching how the order flow and price action develop over time. Often, it is from such a relaxed perspective that good opportunities present themselves.
*Market Profile is a registered trademark of the Chicago Board of Trade.
Wednesday, March 27, 2013 10:13:00 AM