How Does TFiA Order Flow Matrix Help Traders?
Once traders have a basic grasp of order flow, they can:
- Avoid making preconceived decisions, based on purely historic analysis or from theories handed down by so-called experts.
- Assemble the data elements into meaningful patterns.
- Use the real time, micro-level data to make better and safer trading decisions.
Nine ways that TFiA Order Flow Matrix data can be utilised to make successful trades.
- Delta – The delta of a bar will highlight the aggressive bidders or sellers at market price, pushing the market in any particular direction, with no regard for the price. TFiA’s Order Flow Matrix will track the day and cumulative delta for all bars so that traders can examine the trends and look for scalp trading opportunities. The software can be configured by the user for any bar-chart timeframe or chart type.
- Imbalance Zones. Imbalance zones are where aggressive sellers or buyers have historically pushed the market down. The random walk model suggests that this history may repeat itself. TFiA’s Order flow Matrix software will highlight imbalance zones, so that there is no need for manual identification. The software can also be configured by users to look for predetermined price specifications; such as identifying a 3 tick, 4 tick or 5 tick set of imbalances. Imbalance zones are effectively support and resistance areas where the market will stop and turn. They can be precision rejection points for the support and resistance trades.
- Point Of Control. Point of Control is the bar with the highest volume of contracts traded. If traders are below the bar, they look for shorts and if above they look for longs. TFiA’s Work Flow Matrix software tracks the daily Point Of Control bar for trade scalpers.
- Inventory is a unique feature of the TFiA Work Flow Matrix. It enables traders to track the future ending orders so that they can see where traders are waiting to execute in the support or resistant areas.
- Price magnets and unfinished auctions. If there is a price gap – up or down – in the market when it opens, the market is attracted to return and close the gap. A price magnet or an unfinished auction attracts the market back to certain price points. These magnets are highlighted as white bars and unfinished auctions are highlighted as gold bars. They provide price targets for final targets on traded or entry points if they line up with inventory of imbalance zone.
- Profile or composite profile. This is a histogram of volume traded at every price. Imagine a histogram showing the height of children in a school class. It would show a bell-shaped distribution of the children’s height from a minimum of (say) 3 feet to maximum (say) 7 feet. Traders with Order Flow Matrix software will know to buy at ‘3 feet’ and sell at ‘7 feet’. Our software shows the pending buyers in green and the sellers in red.
- Block trades. TFiA’s Order Flow Matrix software searches for the big contract traders and where they are trading. The software can be customised to look for a pre-set number of contracts, such as over 10, or over 20 contracts. In this way, traders can see where the institutional traders are pitching their orders.
- Sequential decline. TFiA Order Flow Matrix software provides an indicator which will signpost sequential decline. It will assist in tracking capped candles where the market is becoming exhausted and running out of steam.
- Floor pivots or value areas and short-term pivot points. The default indicators, in blue, red and green lines, are set at 95% and 68% level of distribution. These levels can be customised to different percentages.