Over the next several weeks we’re going to be answering some of the questions we’ve been asked recently.
So, first off. What do you need to know about order flow?
In short….order flow is irrelevant!!
The only thing you can discern as a trader is what are you going to do with the information the market is giving you. Are you going to buy, sell or do nothing. Are you going to look to trade or are you going to look not to trade.
More important than order flow is to know where you are at, and the Market Profile tool helps you with that.
Order flow is a micro-management tool.
Half of the time you can’t discern if the information is real or not. True or fake.
You don’t have the capacity to compile order flow information to trade effectively.
More importantly, order flow is the concern of the scalper. If your desire is to be a scalper, this is not the place for you. It’s too much risk for too little return.
Market Profile as a tool is a way to get away from the scalping mentality. You’ll know exactly where the market is and you’ll be able to tell if there is fake strength or real strength.
So, stop. Don’t worry about order flow. Listen to the market, see where the market is using the Market Profile tool.
Learn the tool. You’ll see who is in control and what kinds of hands are in control. For example, this week we’ve seen very weak hands in control, which is why we didn’t chase this thing higher.
Get out of the scalping mentality and turn into a positive sum trader. Trade less. Expose yourself to less risk, and earn more.
Aren’t you glad there is one less thing to be concerned about as a trader?