The term Orderflow

A lot of traders are throwing the term Orderflow around like its this magic box that will make you a fantastic trader overnight.

The truth is orderflow is just reading the market, in futures you can use tools like the one offered here but at the end of the day its just knowing who is buying and who is selling where. When I learned options it was called the level 2, I believe in futures its called “the tape” or the DOM, but its all the same thing. Its just knowing where positions are being taken.

Delta, Volume by Price, and Delta by Price are all fantastic tools to help show interest in the market and where trades have been taken in the past. This is how you can form a structural plan for the day. On the execution front you need to look and watch the tape for that. And in my opinion the best for futures is Sierra Chart. You can customize highlights for special conditions, set alert sounds for large lot trades, and see in real time if an trader is below bid or above offer.

All of these will get more detail in a later post but, they are all vital for showing when you are buying with buyers and selling with sellers.

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