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Monday 19 September 2011

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).



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