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Market Makers Move – Volume Drive the Price, How to learn Orderflow for Indian NSE & MCX Segment with NinjaTrader7 Real Time Data feed
Volume plays a very integral role in technical analysis as it helps us to
confirm trends and patterns. Consider volumes as means to gain insights into how
other participants perceive the MARKET Volume plays a very integral role in
technical analysis as it helps us to confirm trends and patterns. Consider
volumes as means to gain insights into how other participants perceive the
market.
The following fictional example should help you understand.
Volume information on its own is quite useless. So how useful is this information when read in isolation? If you think about it, it has no merit and hence would actually mean nothing. However when you associate today’s volume information with the preceding price and volume trend, then volume information becomes lot more meaningful.
In the table below you will find a summary of how to use volume information:
Before we understand the table above in detail, think about this – we are talking about an ‘increase in volume’. What does this actually mean? What is the reference point? Should it be an increase over the previous day’s volume number or the previous week’s aggregate volume?
Thought process behind the volume trend table
When institutional investors buy or sell they obviously do not transact in small chunks. For example, think about LIC of India, they are one of the biggest domestic institutional investors in India. If they would buy shares of any Compaany, would you think they would buy 500 shares? Obviously not, they would probably buy 500,000 shares or even more. Now, if they were to buy 500,000 shares from the open MARKET, it will start reflecting in volumes. Besides, because they are buying a large chunk of shares, the share price also tends to go up. Usually institutional money is referred to as the “smart money”. It is perceived that ‘smart money’ always makes wiser moves in the market compared to retail traders. Hence following the smart money seems like a wise idea.
If both the price and the volume are increasing this only means one thing – a big player is showing interest in the stock. Going by the assumption that smart money always makes smart choices the expectation turns bullish and hence one should look at buying opportunity in the stock. Or as a corollary, whenever you decide to buy, ensure that the volumes are substantial. This means that you are buying along with the smart money.This is exactly what the 1st row in the volume trend table indicates – expectation turns bullish when both the price and volume increases.
What do you think happens when the price increases but the volume decreases as indicated in the 2nd row?
Think about it on the following terms:
Why is the price increasing?
Because market participants are buying
Are there any institutional buyers associated with the price increase?
Not likely
How would you know that there are no meaningful purchase by institutional investors
Simple, if they were buying then the volumes would have increased and not decrease
So what does an increase in price, associated by decreasing volumes indicate?
It means the price is increasing because of a small retail participation and not really influential buying. Hence you need to be cautious as this could be a possible bull trap
Going forward, the 3rd row says, a decrease in price along with an increase in volume sets a bearish expectation. Why do you think so?
A decrease in price indicates that MARKET participants are selling the stock. Increase in volumes indicates the presence of smart money. Both events occurring together (decrease in price + increase in volumes) should imply that smart money is selling stocks. Going by the assumption that the smart money always makes smart choices, the expectation is bearish and hence one should look at selling opportunity in the stock.
Or as a corollary, whenever you decide to sell, ensure that the volumes are good. This means that you too are selling, along with the smart money.
Moving forward, what do you think happens when both volume and price decrease as indicated in the 4th row?
Think about it in on following terms:
Why is the price decreasing?
Because market participants are selling.
Are there any institutional sellers associated with the price decrease?
Not likely
How would you know that there are no meaningful sell orders by institutional investors
Simple, if they were selling then the volume would increase and not decrease
So how would you infer a decline in price and a decline in volume?
It means the price is decreasing because of small retail participation, and not really influential (read as smart money) selling. Hence you need to be cautions as this could be a possible bear trap.
Key takeaways from the chapter
1. Volumes are used to confirm a trend
2. 100 lots buy and 100 lots sell makes the total volume 100, not 200
3. The end of day volumes indicates the cumulative volume across trades executed throughout the day
4. High volumes indicates the presence of smart money
5. Low volumes indicate retail participation
6. When you initiate a trade to either go long or short always make sure if volumes confirm
7. Avoid TRADING ON low volume days (Courtesy – Zerodha Varsity)
The following fictional example should help you understand.
Volume information on its own is quite useless. So how useful is this information when read in isolation? If you think about it, it has no merit and hence would actually mean nothing. However when you associate today’s volume information with the preceding price and volume trend, then volume information becomes lot more meaningful.
In the table below you will find a summary of how to use volume information:
Before we understand the table above in detail, think about this – we are talking about an ‘increase in volume’. What does this actually mean? What is the reference point? Should it be an increase over the previous day’s volume number or the previous week’s aggregate volume?
Thought process behind the volume trend table
When institutional investors buy or sell they obviously do not transact in small chunks. For example, think about LIC of India, they are one of the biggest domestic institutional investors in India. If they would buy shares of any Compaany, would you think they would buy 500 shares? Obviously not, they would probably buy 500,000 shares or even more. Now, if they were to buy 500,000 shares from the open MARKET, it will start reflecting in volumes. Besides, because they are buying a large chunk of shares, the share price also tends to go up. Usually institutional money is referred to as the “smart money”. It is perceived that ‘smart money’ always makes wiser moves in the market compared to retail traders. Hence following the smart money seems like a wise idea.
If both the price and the volume are increasing this only means one thing – a big player is showing interest in the stock. Going by the assumption that smart money always makes smart choices the expectation turns bullish and hence one should look at buying opportunity in the stock. Or as a corollary, whenever you decide to buy, ensure that the volumes are substantial. This means that you are buying along with the smart money.This is exactly what the 1st row in the volume trend table indicates – expectation turns bullish when both the price and volume increases.
What do you think happens when the price increases but the volume decreases as indicated in the 2nd row?
Think about it on the following terms:
Why is the price increasing?
Because market participants are buying
Are there any institutional buyers associated with the price increase?
Not likely
How would you know that there are no meaningful purchase by institutional investors
Simple, if they were buying then the volumes would have increased and not decrease
So what does an increase in price, associated by decreasing volumes indicate?
It means the price is increasing because of a small retail participation and not really influential buying. Hence you need to be cautious as this could be a possible bull trap
Going forward, the 3rd row says, a decrease in price along with an increase in volume sets a bearish expectation. Why do you think so?
A decrease in price indicates that MARKET participants are selling the stock. Increase in volumes indicates the presence of smart money. Both events occurring together (decrease in price + increase in volumes) should imply that smart money is selling stocks. Going by the assumption that the smart money always makes smart choices, the expectation is bearish and hence one should look at selling opportunity in the stock.
Or as a corollary, whenever you decide to sell, ensure that the volumes are good. This means that you too are selling, along with the smart money.
Moving forward, what do you think happens when both volume and price decrease as indicated in the 4th row?
Think about it in on following terms:
Why is the price decreasing?
Because market participants are selling.
Are there any institutional sellers associated with the price decrease?
Not likely
How would you know that there are no meaningful sell orders by institutional investors
Simple, if they were selling then the volume would increase and not decrease
So how would you infer a decline in price and a decline in volume?
It means the price is decreasing because of small retail participation, and not really influential (read as smart money) selling. Hence you need to be cautions as this could be a possible bear trap.
Key takeaways from the chapter
1. Volumes are used to confirm a trend
2. 100 lots buy and 100 lots sell makes the total volume 100, not 200
3. The end of day volumes indicates the cumulative volume across trades executed throughout the day
4. High volumes indicates the presence of smart money
5. Low volumes indicate retail participation
6. When you initiate a trade to either go long or short always make sure if volumes confirm
7. Avoid TRADING ON low volume days (Courtesy – Zerodha Varsity)
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You’ve done pretty well while trading your own funds… but imagine how far you could get if you had someone who would fund you!
You don’t just want someone to teach you to trade. You want someone who will help you get money in your hands to trade.
As a Authorised NinjaTrader Ecosystem Partner , We work with a leading prop firm on USA and will assist in helping you pass an evaluation program that allows traders to prove their skills, while TRADING ON a real-time simulated account using the Ninjatrader platform.
As a Authorised NinjaTrader Ecosystem Partner in India we offer the right training, the right tools and the right support. If you’re ready to live the dream of being a full time, fully funded trader working from anywhere the world.
Right Trade Decision based on Hot Order Flow Analysis Mentor Support by Authorised NinjaTrader Indian Partner
In order to be a successful trader, you must understand the true realities of
the markets.And How move the Price by Market Makers. You must learn how the
professionals make money and what is possible. Most traders come into COMMODITY TRADING, lose a
substantial portion of their capital and then leave trading without ever having
a correct perception of what good trading is all about.
Most beginning traders assume that the way to make money is to learn how to predict where MARKET prices are going next.
Many people make the mistake of thinking that market behavior is truly predictable. Nonsense. Trading in the markets is an odds game, and the object is always keep the odds in your favor.
Luckily, successful trading does not require effective prediction mechanisms. Good trading involves following trends in a time frame where you can be profitable.
The trend is your edge. If you follow trends with proper risk management methods and good market selection, you will make money in the long run.
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Most beginning traders assume that the way to make money is to learn how to predict where MARKET prices are going next.
Many people make the mistake of thinking that market behavior is truly predictable. Nonsense. Trading in the markets is an odds game, and the object is always keep the odds in your favor.
Luckily, successful trading does not require effective prediction mechanisms. Good trading involves following trends in a time frame where you can be profitable.
The trend is your edge. If you follow trends with proper risk management methods and good market selection, you will make money in the long run.
We offer Professional Approach of ORDER FLOW ANALYSIS Mentor Support on LIVE TRADE ROOM.. one to one session.,based on Premium Service.
Order Flow Analysis, Professional Support for Indian Future Market – One of my Favorite Tool on my Live Trade Room
The term is a little masked. All that’s ever going on in the market are
transactions: the buyer buys from the seller, the seller sells to the buyer,
this is the price, and this is the number of contracts. Then there is another
trade; etc. Those are the orders. It is called a “flow” since what you are
trying to watch for is the execution of all these trades, the potential
direction that they may influence the price; and where can you find a seller to
buy from now and a buyer to sell to overhead later: who is there trading, and
who is there offering. It is called a flow since your trade falls into a
sequence of events that eventually works out into a price action direction,
where you spread your trade, facilitate trade with other traders, and hopefully
take a profit for doing that. So you are simply watching the traders trade to
understand the auction and your opportunities.
Advanced Order flow analysis Stuff for Stocks and Commodity Market by NinjaTrader Ecosystem Partner- Part 1
In the last decade,MARKET
data has
become more accessible than ever before.
As a result, ‘order flow’ techniques have become more popular. More traders are using them as a method to ‘read the market’. But not nearly as many use it as I’d expect.
Long-time Round-Up readers will know about by passion for order book trading.
But until today, I haven’t really explained it. And given that it’s one of the techniques
So I’m putting together a little series to try to get across just how powerful order flow analysis is.
Order Flow Analysis Introduction:
One of the most common misconceptions about the markets is that markets move up because there are more buyers than sellers and that markets move down because there are more sellers than buyers. Normally, I would say this is nonsense, for today, I’ll be nice and settle on saying it’s impossible. The markets are a mechanism for matching buyers and sellers, that is what they do, they bring buyers and sellers together. If you are a buyer and there is nobody selling, then you will not be buying anything. You can’t buy fruit if no-one is selling it and you sure can’t buy contracts if there’s no seller either.
If this is news to you, then of course you are wondering what makes price move. If every buyer has a seller, then why does price move at all? First, lets make sure we understand what the price is.
data has
become more accessible than ever before.As a result, ‘order flow’ techniques have become more popular. More traders are using them as a method to ‘read the market’. But not nearly as many use it as I’d expect.
Long-time Round-Up readers will know about by passion for order book trading.
But until today, I haven’t really explained it. And given that it’s one of the techniques
So I’m putting together a little series to try to get across just how powerful order flow analysis is.
Order Flow Analysis Introduction:
One of the most common misconceptions about the markets is that markets move up because there are more buyers than sellers and that markets move down because there are more sellers than buyers. Normally, I would say this is nonsense, for today, I’ll be nice and settle on saying it’s impossible. The markets are a mechanism for matching buyers and sellers, that is what they do, they bring buyers and sellers together. If you are a buyer and there is nobody selling, then you will not be buying anything. You can’t buy fruit if no-one is selling it and you sure can’t buy contracts if there’s no seller either.
If this is news to you, then of course you are wondering what makes price move. If every buyer has a seller, then why does price move at all? First, lets make sure we understand what the price is.
Order flow Analysis – Professional Mentor Support for Indian MCX Futures and NSE Futures (Courtesy Mike)
The key elements of Order flow Trading are traded price, traded bid volume,
traded ask volume over a range, volume or time period. When these elements are
displayed in a chart, traders will be able to identify the MARKET’s areas
of strength and weakness. Every market moves up or down based on the interaction
between supply and demand. Traditional charting techniques or analysis do not
accurately allow you to analyse, understand and interpret the fighting forces of
supply and demand. Orderflows allow you to dissect the supply and demand balance
in real time as it is happening. You will understand which side is in control
and be prepared to respond when it changes.
Order flow Trading allows the trader to see what is happening in the market in real-time giving an x-ray view into the market so the trader can see what exactly is happening as it happens. Once a trader understands what is happening in the present, the trader is able to make better decisions about what might happen in the future.
Order flow provides valuable market activity information that is not available on any other type of chart. Despite its many unique and inherent advantages, many traders just do not understand how to interpret the order flow occurring in the market to help them in their trading.The Orderflows Trading Course is a unique home study video course designed to provide you with a complete education of Order Flow Analysis of Futures Markets: to help you understand a footprint chart, areas of price rejection, where strong volume is appearing, how to find hidden trade opportunities and much more.
Order flow Trading allows the trader to see what is happening in the market in real-time giving an x-ray view into the market so the trader can see what exactly is happening as it happens. Once a trader understands what is happening in the present, the trader is able to make better decisions about what might happen in the future.
You wanna be right? Or make money? (Courtesy – AdamHGrimes)
We all have ego. Everyone likes to be right, likes to be seen as intelligent,
and likes to be a winner. We all hate to lose, and we hate to be wrong; traders,
as a group, tend to be more competitive than the average person. These
personality traits are part of what allows a trader to face the market every
day—a person without exceptional self-confidence would not be able to operate in
the market environment.
Like so many things, ego is both a strength and a weakness for traders. When it goes awry, things go badly wrong. Excessive ego can lead traders to the point where they are fighting the market, or where they hold a position at a significant loss because they are convinced the market is wrong. It is not possible to make consistent money fighting the market, so ego must be subjugated to the realities of the marketplace.
One of the big problems is that, for many traders, the need to be right is at least as strong as the drive to make money—many traders find that the pain of being wrong is greater than the pain of losing money. You often have minutes or seconds to evaluate a MARKET and make a snap decision. You know you are making a decision without all the important information, so it would be logical if it were easy to let go of that decision once it was made.
So often, this is not the case because we become invested in the outcome once risk is involved. Avoiding emotional attachment to trading decisions is a key skill of competent trading, and being able to immediately and unemotionally exit a losing trade is a hallmark of a master trader. Being wrong is an inescapable part of trading, and, until you reconcile this fact with your innate need to be right, your success will be limited.
I often suggest that an appropriate way to look at normal trading losses is not as losses at all, but simply as a planned, recurring cost of doing business. Though many traders feel shame, anger, and hurt over losing trades, this is illogical—the market is so random that it is absolutely impossible to trade without losing. Many good traders are wrong far more often than they are right; trading is not about being right or predicting the future. All you can do is to identify places where you might have a small edge in the market, put on the trade, and open yourself to the possible outcomes.
(From The Art and Science of Technical Analysis, 358-359 by AdamHGrimes )
Like so many things, ego is both a strength and a weakness for traders. When it goes awry, things go badly wrong. Excessive ego can lead traders to the point where they are fighting the market, or where they hold a position at a significant loss because they are convinced the market is wrong. It is not possible to make consistent money fighting the market, so ego must be subjugated to the realities of the marketplace.
One of the big problems is that, for many traders, the need to be right is at least as strong as the drive to make money—many traders find that the pain of being wrong is greater than the pain of losing money. You often have minutes or seconds to evaluate a MARKET and make a snap decision. You know you are making a decision without all the important information, so it would be logical if it were easy to let go of that decision once it was made.
So often, this is not the case because we become invested in the outcome once risk is involved. Avoiding emotional attachment to trading decisions is a key skill of competent trading, and being able to immediately and unemotionally exit a losing trade is a hallmark of a master trader. Being wrong is an inescapable part of trading, and, until you reconcile this fact with your innate need to be right, your success will be limited.
I often suggest that an appropriate way to look at normal trading losses is not as losses at all, but simply as a planned, recurring cost of doing business. Though many traders feel shame, anger, and hurt over losing trades, this is illogical—the market is so random that it is absolutely impossible to trade without losing. Many good traders are wrong far more often than they are right; trading is not about being right or predicting the future. All you can do is to identify places where you might have a small edge in the market, put on the trade, and open yourself to the possible outcomes.
(From The Art and Science of Technical Analysis, 358-359 by AdamHGrimes )
The MA (Moving Average) cannot be too hot or too cold; it needs to be just right
Moving Averages are not the Holy Grail and are not created equal; however if
used systematically and consistently, they tend to keep a trader on the right
side of the big moves.
They are a totally technical approach(they rely on price only) and it doesn’t matter which market you use them on. They work well in bull and bear markets and in both the stock and commodity markets; However they ‘ll whipsaw the trader in a sideways or trendless market. However, this isn’t as big of a disadvantage as it might appear at first.
Usually the trader will quit just before the big move starts.Remember that you need to catch the big moves when using a moving average system or you won’t win.
They are a totally technical approach(they rely on price only) and it doesn’t matter which market you use them on. They work well in bull and bear markets and in both the stock and commodity markets; However they ‘ll whipsaw the trader in a sideways or trendless market. However, this isn’t as big of a disadvantage as it might appear at first.
Usually the trader will quit just before the big move starts.Remember that you need to catch the big moves when using a moving average system or you won’t win.
Styles of trading
I want to share a simple rule that has worked well for me over the years.
I’ll explain the how and why, and then wrap up with some thoughts about when
this rule might not be appropriate.
So, imagine you are in a position, and then, for whatever reason, you know it’s right. In fact, it’s so right that it’s time to add to the position, and so you do. Now, think about what happens if the trade turns out to not be right, or to not develop as you expected–what do you do? Here’s the rule: if you add to an existing position and it does not work out as expected, you must get out of more than you added. Simple rule, but effective.
To put numbers to the idea, say you are long 5,000 shares of a stock. As the trade moves in your favor, you get a signal to add to the trade (and that “signal” could cover many possibilities.) So, you add 2,000 shares. Somewhere down the road, the trade does not work out, and probably is under the price at which you added. Now, you know the right thing to do is to reduce the position size, and you must do so, but how much do you sell? Answer: more than 2,000, and probably more like 4,000 than 2,100. You now hold less than the original position size, and you’ve booked a loss on part of the position, but you’ve also reduced your risk on a trade that was not developing as you thought it might.
One of the classic trading mistakes is to have on a winning trade, add inappropriately, and have that trade become a losing trade. For some traders, being aggressive and pressing when they have a good trade can add to the bottom line, but there is a tradeoff: when you become more aggressive you do so by taking more risk. The psychological swing–going from aggressive to wrong–can be one of the most challenging experiences for a trader, and many mistakes happen in this heightened emotional space. The rule of exiting more than you added is a simple rule, but it protects you from yourself.
Now, no rule fits all styles of trading all the time. There could be styles of trading for which this is inappropriate, (for instance, when we add planning to scale in as the trade moves against the entry.) However, for “simple”, directional technical trading, this rule might be helpful in many cases. So much of the task of trading is just about avoiding errors and mistakes, and correct rules lead to good trading. (Courtesy – Adam)
So, imagine you are in a position, and then, for whatever reason, you know it’s right. In fact, it’s so right that it’s time to add to the position, and so you do. Now, think about what happens if the trade turns out to not be right, or to not develop as you expected–what do you do? Here’s the rule: if you add to an existing position and it does not work out as expected, you must get out of more than you added. Simple rule, but effective.
To put numbers to the idea, say you are long 5,000 shares of a stock. As the trade moves in your favor, you get a signal to add to the trade (and that “signal” could cover many possibilities.) So, you add 2,000 shares. Somewhere down the road, the trade does not work out, and probably is under the price at which you added. Now, you know the right thing to do is to reduce the position size, and you must do so, but how much do you sell? Answer: more than 2,000, and probably more like 4,000 than 2,100. You now hold less than the original position size, and you’ve booked a loss on part of the position, but you’ve also reduced your risk on a trade that was not developing as you thought it might.
One of the classic trading mistakes is to have on a winning trade, add inappropriately, and have that trade become a losing trade. For some traders, being aggressive and pressing when they have a good trade can add to the bottom line, but there is a tradeoff: when you become more aggressive you do so by taking more risk. The psychological swing–going from aggressive to wrong–can be one of the most challenging experiences for a trader, and many mistakes happen in this heightened emotional space. The rule of exiting more than you added is a simple rule, but it protects you from yourself.
Now, no rule fits all styles of trading all the time. There could be styles of trading for which this is inappropriate, (for instance, when we add planning to scale in as the trade moves against the entry.) However, for “simple”, directional technical trading, this rule might be helpful in many cases. So much of the task of trading is just about avoiding errors and mistakes, and correct rules lead to good trading. (Courtesy – Adam)
How to make smart money by trading on MCX Crudeoil? by Using Unique NinjaTrader Trading Strategies – Live Trade Room on 08.12.15
Portfolio Performance from 2013 to 2015
OrderFlow Trading is finally revealed and Explained, Orderflow trading video course
Order Flow Is The Most Powerful Market Analytical Tool Available For Traders.
Order flow provides valuable market activity information that is not available on any other type of chart. Despite its many unique and inherent advantages, many traders just do not understand how to interpret the order flow occurring in the market to help them in their trading.The Orderflows Trading Course is a unique home study video course designed to provide you with a complete education of Order Flow Analysis of Futures Markets: to help you understand a footprint chart, areas of price rejection, where strong volume is appearing, how to find hidden trade opportunities and much more.
Live Trade Room Support on MCX Crude Oil MiniLots Scalp Trading – 2 Week Trading Result nearly 910 Points
07.06.16 – 95 Points
06.06.16 – 82 Points
03.06.16 – 184 Points
02.06.16 – 11 Points
01.06.16 – 26 Points
31.05.16 – 98 Points
30.05.16 – 55 Points
27.05.16 – 113 Points
26.05.16 – 137 Points
25.05.16 – 109 Points
Total – 910 Points (Excluding Brokerage and Taxes)
06.06.16 – 82 Points
03.06.16 – 184 Points
02.06.16 – 11 Points
01.06.16 – 26 Points
31.05.16 – 98 Points
30.05.16 – 55 Points
27.05.16 – 113 Points
26.05.16 – 137 Points
25.05.16 – 109 Points
Total – 910 Points (Excluding Brokerage and Taxes)
