Jigsaw Trading Blog

Customer Video Review #2

Published on: March 27, 2013

All

This is another customer video that I was asked to look at. The trader in question was already short the 6E at this point and was looking for information on what information he’d get from the order flow to help manage the trade.

First his comments:

“The first 10 minutes are of interest only.

I went short and looking for all the signals to confirm my entry. I see a of of bids being pulled (thus no buyers), then price popped up, but then was hit with an iceberg, I believe preventing it going any higher, and price continued down.

Then price went in my favour, but there were i believe so many ice burgs in both directions! (causing confusion in my head).I also saw a lot of divergence between the number of bid/ask. I always assume a big difference should cause a reaction, but there was very little reaction to the divergence.

Basically i would like your interpretation of the flow of orders. Also I think i am looking at each trade an making an assumption (eg divergence of bid/ask, and the number of icebergs), and perhaps i should be building up an overall picture.

Also to tell you the truth, perhaps I don’t even know what I’m looking for. I’m going short based on the chart (which worked out) and im looking for order flow confirmation. I’m just trying to clarify if i should do this by interpreting your view and see if it correlates with mine. Or perhaps i cant correlate my entry with order flow as i can never tell whats going to happen next!”

It would have been nice to see the order flow as it moved up and formed the long tail on the candle because that is the point you were looking for an entry and refining your entries is a key benefit of using order flow. With the video starting after the reversal itself, we are really looking for reasons to stay with/exit the trade.

You are right that we saw 2 sided trading and the profile does help us to predict where 2 sided trading will occur. I think your analysis is correct, you are actually seeing the right things but need to have a slightly longer term perspective on what is occurring It’s a story unfolding in front of you, don’t get hung up on any 1 specific change.

As usual, put in full screen mode and select “HD” in the youtube settings…

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