OrderFlow scalping: mixed bag of trades today

Today I had two trading sessions: first I did with Nick in the room, but taking trades myself, although there were in most time similar to Nick's so I assume he's influencing me, wasn't good day, difficult PA, undecided, maybe due to two expiring options on EU, and FOMC later in the day. 

Then Sander took over and since he trades much less I did trade on my own and results were better, despite tight-range PA continued. I need to practice solitary trading I believe, but room at RockShore is great.

I took 13 trades, 70% winning, max drawdown 0.5%, best trade 1.06%, gross profit 3.6%, gross loss 1.25%,  total net profit 2.35% (23.5 pips).

OrderFlow-assisted scalping

Had a decent scalping session today: took three long trades on EU towards expiring option at 1.3725, market was around 1.3680. Made +10, +20, +13 pips. Then engaged into scalping, bit of mess, lots of small winners and losers, my mistake was I started doing it too late, around mid-way through US session, and the best time is start of London. In any case did around 30 trades during the day, net result +70 pips.

Some trading rules to follow:

To do:
1. Wait for a decent trend to establish on M1, don't trade ranging market on M1.
2. Identify support or resustance on a pull back, or breakout-pull back (the best)
3. Use Order Flow and OrderBook sentiment bar to identify sentiment and pressure
4. Wait for a signal from MFSI and confirmation from PA with a price moving same way, on a decent volume at least through the half of a first M1 candle and enter
5. Decent pressure on OBFX viewer bar is a big bonus
6. Start trading option/stops run around 2-2.5 hours before expiration on counter-trend breakout/pull-back

Not to do:
1. Don't trade after 4 PM CET
2. Don't trade ranging market and indecision
3. Don't trade against immediate trend and H1 trend if present
4. Don't trade against an expiring option or noted stops cluster

OrderFlow trading: Option Assault

I was given an opportunity today to test DarkStar's method for a second time, the first attempt was last week. And again it played out by the book:

1. This morning information about a resting put option with a strike 1.3600 was leaked on TalkingForex.

2. EurUsd was in an intra-day down-trend, which quickly reversed, just as DarkStar noted.

3. A short up-trend was used to achieve a better price to accumulate offers being sold to break out buyers, to shake out short weak hands and to invite bottom callers to long, in order to hit them with a big sell-off forcing their stop orders into liquidation.

4. With a break out from a short-lived up-trend the down trend resumes, occasionally producing long up candles, scaring weak hands again and use propelled price to add to shorts at a better price.

5. As time is closing to the cut at 10AM NY, the price is breaking under 10-pip zone of 1.36. My first target is hit at 1.3615 and 1/3 position closed.

6. A fierce battle commences for about 15 minutes storming the 1.36 barrier. The option underwriter fiercly defends the strike price in order to avoid a pay-off and retain a premium. An option buyer fights to avoid paying a premium and to capitalize on whatever profit may be (a number of pips a price will be below 1.36 at a cutouff time).

7. An option buyer and stop raiders won again as price closed at around 1.3598, creating a small profit for  an option owner forfeiting a premium. But the battle is not over yet as now there are less defenders left to protect 1.3600 since the option underwriter doesn't care any more. Only people who care are stop raiders and people who have stops below 1.3600.

8. Half an hour later raiders managed to push price below 1.3595 and force a stop liquidation, visible on a strong down bar. However there was no cascading stop liquidation what would be visible as charts failed to produce consecutive large down candles. Therefore there was no more selling interest and it was a time to close positions.

9. I had an entry split in 3 parts and also had 3 take profits, all 3 were hit as limit orders.

10. The best part is this highly profitable fun happens several times a week in FX for every major, every week :)

Result of the trade: 130 pips collected within 3 hours. Stop was 50 pips as emergency, I would be closing positions if retraced over 20 pips. OrderFlow principles and OrderBook data feed was used to select entry points precisely and also monitor for the potential bail-out.

Order Flow scalp

I have started to study some order flow trading, I got a trial of OrderBookFX software, and here is an attempt to scalp M1 market with an entry confirmed by the order book imbalance: at the moment of entry order book was heavily skewed towards offers and indicated strong selling pressure. Setup itself is a range top with stochastics cross and exit from overbought area but exact entry was based on chart pattern and volume indicating struggle to move higher with small candles produced on high volume (churn). This type of consolidate can be before reversal or breakout, but when I saw the heat building up in the order book with lots of offers above the area, I went short and price followed in a couple of minutes. I took only 14 pips but about 50 was available, the sell-off was pretty big and order book imbalance big too. Stop was only 5 pips. P/L 2.8:1

Another one: this went around 12 pips against me, but I consciously entered against a trend as I saw a point of exhaustion and anticipated a bigger run for stops above swing highs and potentially up to 1.3700 before down trend will resume. I went with a half normal lot (0.25% risk) and was tolerating up to 18 pips floating loss. It went then up to 16 pips in profit, but then I saw bears starting to take control over order flow, pressing lower and a climax low candle down on a big volume where I bailed out for 9.3 pips (on half lot, so 4.65 pips normal lot equivalent).

Some great information about market structure to read about: http://www.forexfactory.com/showthread.php?p=3609096#post3609096

US CPI fade

I did not play that one by the rules, was more looking in using tick charts and volume rather statistics instead. However it did play by the book: 25TP 10 SL.