Video Transcript:
High-volume nodes are some of the most important levels Order Flow can show you. When two or more form next to each other, they create a strong trading zone and a great opportunity for trading pullbacks. The bonus is that this strategy also works on forex because you don’t need bid and ask data to use it. Now, let me show you how it works. A high-volume node is basically the node shown in brackets, which means that it has the heaviest volume within the whole footprint. As you can see, every footprint in this image has one high-volume node, and that high-volume node is the most important level within each footprint. Now, if you have two of those next to each other, like here and here, my software highlights them in yellow. In this case, it doesn’t. I think it is probably because I was using an older version of my Order Flow software, or maybe I had simply disabled that function. However, my Order Flow software normally highlights them in yellow like this when they are next to each other. That means this is a very significant zone you want to trade from. The cool thing is that you trade it in a very similar manner to the previous strategy—the heavy-volume cluster strategy. In this case, you are trading from this double high-volume node or multiple high-volume nodes. Here, there was a downtrend, and two high-volume nodes formed next to each other within that downtrend. You wait for a pullback to that zone, and in this case, because there was a downtrend, you go short from there. All right, as you can see, you trade this very similarly to the previous setup I showed you. In this case, you just need to see two high-volume nodes, or more than two, which is even better, next to each other. Let me show you a couple of examples so it is crystal clear. This was pretty cool because there were two pairs of high-volume nodes here and here. From this area, the price continued to drop. What you do is mark this zone in your software, wait for the pullback, and trade from there. What the high-volume zones are telling you is that institutions were active at this price level and that this price level was very important to them. Chances are that they will defend that level when the price returns to it. That is why there is a good chance of a reaction. What is even better than two high-volume nodes next to each other is three high-volume nodes next to each other, like here. We had a downtrend, and these three high-volume nodes formed next to each other within that downtrend. You wait for the pullback and go short from there. In this case, I was working with the 30-minute time frame. I prefer to do this on the 30-minute time frame, but you can choose a different one if it suits you better, such as the five-minute or hourly time frame. However, I wouldn’t go above the hourly time frame. All right, here is the last example of this setup. There was a rejection of high prices and a double high-volume node within the rejection, which is pretty cool. The price moved away from it, returned, and boom—this was the reaction. By the way, looking at this chart, there was also this heavy-volume cluster here and another one here. I bet this area worked as strong support. If I were trading it, I would wait for a pullback to this area and go long from there. This heavy-volume zone, combined with this volume zone and the fact that those two high-volume nodes were only one tick apart, would also create support. If the price dropped even lower to this area, it would provide another opportunity to go long. Another thing I am considering here, which I haven’t told you yet, is that this formed within a rejection of low prices. It formed within an important zone, and that is what I like when support or resistance forms within an important area like this one.
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