Trading, especially order flow trading requires accurate thinking. ¬†You can be cynical of many others things in life, but for trading you need order flow accurate thinking. ¬†There are thousands of traders out their least interested in accurate thinking. ¬†They would rather study their technical indicators, chart patterns, etc that they believe will generate order flow and move the price. ¬†They believe that technical indicators, etc are accurate thinking. ¬†It can be very uncomfortable to deal with the truth in the markets. ¬†The truth that your trading system is not performing, that you don’t have a real edge sometimes, that you need to gain more skill.
Every order flow trader needs to have an accurate assessment of the order flow situation in the given financial instrument that they trade. ¬†You need to have an accurate assessment of the true order flow generators for bullish and bearish scenarios. ¬†You need to have an accurate assessment of who is taking the other side of your trades and why they are doing so. ¬†You need to have an accurate assessment from which market participants will you extract large sums of money. ¬†If you don’t have accurate thinking, then you will make endless mistakes and losing trades.
If you trade a particular stock, then know the specific order flow generators for that stock. ¬†Also know the general market themes that can also drive that stock.
If you trade a particular currency, then know the specific order flow generators for that currency. ¬†Know what is going on in that countries economy if it is affecting the markets. ¬†Know what the broad themes in the currency markets are and if/when those themes can exert themselves on the currency pair that you are trading.
Of course there are general order flow generators that can apply to a wide variety of financial instruments such as stops, profit taking, bargain hunting, etc. ¬†But not always. ¬†Sometimes order flow generators specific to that currency pair or financial instrument move the market. ¬†And you need accurate thinking to take advantage of them.
Order flow accurate thinking is crucial. ¬†You cannot think about where you would like the market to go, or what you think other people should do, or what would be nice to happen. ¬†You think about what is the truth in the current situation and what will drive the market in the future. ¬†Future order flow will make you money, lots of money, if you are on the right side of it. ¬†Past order flow cannot make you money directly. ¬†Although studying the order flow drivers for past moves can be an extremely good exercise for helping to play out various scenarios that may occur in the future.
Future order flow will make you money, lots of money, if you are on the right side of it. ¬†Past order flow cannot make you money directly. ¬†Although studying the order flow drivers for past moves can be an extremely good exercise for helping to play out various scenarios that may occur in the future.