When I first learned about order flow trading, there were pretty much only two inefficiencies talked about. It was all about stop hunting and option barriers. Those were pretty much the only inefficiencies talked about. News Trading was talked about a little bit, but most people don’t know how and don’t want to do the work to figure that out, so that was not talked about much.
What tends to happen is that a stop hunting and option barrier bubble forms in peoples minds. It formed in my beginning order flow mindset as well. You start to view the market through the order flow generators and scenarios of stop hunting and option barriers.
And you need to be careful about just staying in the stop hunting bubble. Stop hunting and option barriers are great. I use those techniques every chance I get. But the bigger and even more lucrative opportunities are with news, sentiment and global macro trading. Because once you learn those, then you can mix and match them to truly capture almost any type of market move that you want.
Thank god I got out of the tunnel vision and stop hunting bubble. Because it is a bubble. That is the only inefficiency that they realize and thus do not search for any more order flow inefficiencies.
The problem with stop hunting and option barriers is that they cannot explain the why of price movement every single day. Stop hunting and option barriers cannot explain the big moves in price. They cannot explain the large chunk of 500 pip or 1,000 pip movements.
And if they cannot do that, you are either forced to only trade the days when those inefficiencies are active, or attempt to trade them every day, which diminishes your edge because stop hunting and option barriers full influence is not present each and every day. Your edge is diminished because you are unaware of the other order flow generators, triggers, and scenarios that can move the market.
If they cannot explain price movement every day, then it can be to your advantage to figure out the other order flow generators and scenarios that can move the markets in addition to the stop hunting and option barriers. Things like news, sentiment, global macro, positioning, expectations, etc. As once you figure out those things then you can combine them with the stop hunting and option barrier inefficiencies to truly extract money from the markets in a more efficient way. You get far closer to the order flow super system.
I know because I tried to trade with knowledge of stops and option barriers in a vacuum with no other knowledge. It’s better than other forms of trading. But where your trading really takes off and the rise to the highest point on the trading profit ladder occurs is when you understand news and global macro analysis and incorporate that with stops and option barriers.
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