EUR/USD: Order Flow Analysis

Some of you probably know that I am developing my own Order Flow software. It is not 100% ready for release yet, mostly because I still need to finish a video course that will go with it.

I guess that all will be finished within a month or so… (no guarantees :))

My plan was to present it to you when it was all 100% done and finished but I just couldn’t wait! So this will be the first short article about using the Order Flow in real trading.

*I am not going to talk about all the features and strategies here (you will learn all that in the Order Flow Video Course) but I will just jump right into it and show you how to use Order Flow in your trading.

Order Flow as a confirmation to Volume Profile

One of the ways you can use the Order Flow is to look for a confirmation in strong support/resistance zones.

As an example, I will use a support which I showed you on Tuesday in a Weekly Trading Ideas video. This one:

How To Trade The Weekly POC – Weekly Trading Ideas 14.4.2020

The support I talked about was on EUR/USD at 1.0869. This was the prediction (screenshot from the video):

This is how the trade went:

The picture below shows a candle chart of EUR/USD (with the support from the video) and also the zoomed-in Order Flow chart of the same area (both 30 minute time frame):

Important notice before we jump into it

Before I start talking about what the Order Flow showed when it hit the support, I need to tell you two important things:

1. Supports/resistances are NOT EXACT levels. They are ZONES. In those zones we want to see a confirmation that the big guys are going to react to these zones.

2. I prefer using Order Flow on Futures charts (because those are centralized – as opposed to Forex which is decentralized). So, I trade Forex but I look at Futures. That’s why the pictures below are not on EUR/USD but on 6E 06-20 (EUR Futures). The prices are bit different but the correlation is almost 100% (they move exactly the same).

ORDER FLOW ANALYSIS

When the price hit the support area (which was based on Weekly Volume Profile) I was looking for some sort of confirmation on the Order Flow.

At first there was nothing and the price overshot the 1.0869 (forex) level (but it was still in the support area which was around 20 pip wide). Then three nice confirmations on the Order Flow appeared:

#1 Confirmation: Buying imbalances

Strong and aggressive buyers started to jump in.

How do I know there were strong and aggressive buyers? If you look at the chart below, then I marked four BLUE numbers. Those are called “Buying imbalances“. They mean that buyers are way more stronger & aggressive than sellers (there are way more volumes traded on the Offer side than on the Bid side).

#2 Confirmation: A BIG order

Shortly after the strong buyers started to jump into their longs, there was a crazy big order (1223 lots) placed on the Offer (aggressive buy order). This was another nice confirmation because some BIG guy was waiting for this level and he has just entered the game! That’s what you want to see – big guys on your side πŸ™‚

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#3 Confirmation: Positive Delta

The table at the bottom shows (among other things) Delta.

Delta essentially shows the difference between Bid (sellers) and Offer (buyers) in a given candle.

In the picture below, you can see that at first the Delta was NEGATIVE (-166, -207, -192). Then it turned greatly POSITIVE (+1576).

This means that there were more aggressive buyers than sellers.

That’s another confirmation I like to see when a price reaches a support!

Even one of those three confirmations would be the final push I would need to enter the long. Having three of them – that is gold!

I hope you guys liked today’s Order Flow analysis! Let me know what you think in the comments below!

Happy trading!

-Dale

Β 

P.S. – Answers to most common questions about my Order Flow πŸ™‚

  1. I don’t know the exact release date yet (I hope within a month)
  2. I don’t know the price yet, but don’t worry I don’t want it to be expensive.
  3. It will be only for NinjaTrader 8 platform. No MT4/MT5.

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31 Comments

  1. Rawlston

    That Looks Great dale. Can it be applied to Forex Charts and will it be as reliable as it appears to be on the Futures Chart. It does appear to be very useful for trading purposes. Well Done Mate!

    1. Trader Dale

      You can use this for forex too! It is best with futures and then with forex major pairs. Thank you!

  2. Alin

    It explains very well how the markets are moving: volume POC and order flow. Without this, we’re just blind…
    Thank you!

    1. Trader Dale

      Don’t worry. I am doing my best and I will release it when I am 100% satisfied with it. I have no need to rush. Still, if we manage to find any bug then we will be able to quickly fix it anytime!

  3. mina

    dear Dale
    thanks for sharing the analysis of the orderflow but i’m not interested in buying anymore products from you since i paid 460$ for the volume profile package more than a year ago and you left me without training courses when you get the vwap.
    i’m sorry but i lost my trust since all what you care about is buying the new product to get access to the volume profile training videos.

    1. Trader Dale

      I am sorry, this is just a misunderstanding πŸ™ I only moved the course into a different section (Daily levels – scroll down and it is all there for you). Please send me an email if you have any questions and I will help.

  4. Saifur Rahman

    Hi Dale, excellent tool. Do you think it is possible to have similar information in Tradingview?

    1. Trader Dale

      I am sorry I can’t give it for free. You know the people who are coding this super complex software need to pay their bills too :))

    1. Trader Dale

      Thank you. I want to make it worth every dollar and more. Not just the indi but also the video course that will go with it.

  5. Buddika perera

    Hello Dale,
    I had a problem with confirmation of next move at POC points , because sometimes the level was breached instead bouncing back. Is it giving good Confluence with Order Flow rather than VP or VWAP ????

  6. David

    Hi Dale,

    Very interesting indicator. It seems like you want to use Order Flow to overlay your Volume Trading Strategy and find confirmation whether you want to enter once the price reaches your level. My questions are the following:

    1) Is the Order Flow necessary or it’s fine to be profitable just sticking with Volume Profile?
    2) If you don’t see many order on Order Flow, would you still go through with the trade once Volume Level is hit?
    3) Since Order Flow is a filtering tool to see whether your Volume Levels will work, can you guess by how much Order Flow will increase your strike rate after Order Flow confirmation?

    Thanks.

    1. Trader Dale

      Hello,
      1) you can just stick to VP and you will be okay. VP is the main key. OF is for confirmation and for intraday trading/scalping.
      2) well that depends on the level and other confluences I would see on that level.
      3) thats hard to say because OF can also help you with take profit, quitting trades, better entries…

  7. Alberto

    Ok Dale….I think It Is normale to pay for the tool but you think you Will make a video course foto the members Who Will purchase the tool? When It you Will be albe ti sell It?

    1. Trader Dale

      I am already working on an Order Flow video course. You will get that along with the indicator. It will be a very nice package πŸ™‚ I think all will be ready within a month.

  8. albert

    hi Dale, I have question too.

    1) Is Volume Profile enough to get consistent profitable trade? or need order flow and vwap too?

    2) Volume profile can pending order. Order flow must real time monitoring in front of laptop?

    3) do we able to view 30 min future chart for free in NT? or need subscribe for paid data feed?

    3) Looking for improvement on support. Email or live chat to you, normally slow to no reply.

    1. Trader Dale

      Hello Albert,
      1) VP is enough. Of opens up new ways of trading, especially intraday and scalping.
      2) there are strategies that allow you to use pending orders too. I am going to show them to you in the OF video course
      3) there is a way with the free CQG trial that NT provides. You will need to renew your email every 30 days I think…but you will save some money by doing that and spending a few minutes every 30 days is not so bad I guess…
      4) I answer all my emails every day (except weekends when I am with my family). Chat is worse, I admit. I will need to hire some more help with that. It is just too much for one guy to do it all πŸ™‚

  9. Brian

    Hi Dale,
    Looking forward to seeing your OF tools.
    1. Is your OF tool built on NT8 OrderFlow + suite?
    2. Will you have S/R zone type tool incorporated?
    Guess we’ll see soon enough if we let you keep working on the package and stop asking questions until after the release. Ha!
    Thanks.

    1. Trader Dale

      Hello Brian,
      1. no, it is my own software, not NT product.
      2. I am not sure what you mean S/R zone type πŸ™‚
      Yea you will see what it has πŸ™‚ I will do a video where I show you the most important parts!

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