On Friday the markets had finished a Neutral Extreme, which in Market Profile means that you should have an open above the close of the previous day for trend continuation.
The open early this morning was far removed from that close and OrderFlow quickly determined that sellers were present in the market and active. Generally smart money at the open has a very good idea of where they expect the market to go and detecting their presence straight at the open was a big edge.
We were short at 9.17 am this morning.
2 minutes later the OrderFlow confirmed a sell signal in the Bank Nifty as well and the smaller Initial Balance of the morning was a clear give away that the Market would go to levels of 3 IB today.
Over the years I have seen a lot of traders believe in levels, indicators, systems giving importance to the message from these indicators more than the actual message from the market.
Thus somebody will stop new selling because their indicator is flashing an “oversold” status or will do a buy because some trend line somebody has drawn in a chart comes to meet a particular price at current position. What one has to understand is that all indicators and their like derive their positions from the market and cannot be more supreme than the market’s message. Simply put this message is the understanding of Buyer seller price behavior through their volumes.
When It comes to trading with the OrderFlow I do not believe in levels, indicators, forecasts, analysis even of my own! Only Price pays, and that is the absolute truth of the market.
In OrderFlow we have an excellent trend indicator, which not just helps us to be on the right path, but shows us at any point of time who is more in control of the market.
Here is an updated sheet showing how it has picked up trends and generated profits over the past fortnight.
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Our net gains in today’s session total 81 points in Nifty, 173 points in BankNifty and 4.2 points in Copper per lot !!
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