Order Flow: How to Track the Big Players

Video Transcript

Big players move the markets, and that’s why I believe that our best trading edge is learning how to follow their activity and trade alongside them. Today, I’ll show you how to track these big players using order flow and how to use their activity to confirm your trade entries. We will keep it very practical with plenty of real trade examples. So, let’s kick this off with one right now. So, what you see here on your screen is NASDAQ chart. This is TradingView platform by the way. And the first thing that I always do before I start trading with order flow. I identify strong support and resistance zones using volume profile. So let’s do that right now. What you see here is a volume profile that shows how volumes were distributed here. What I like to do is trade pullbacks to significant volume clusters. There’s one in here. There was one in here. And there’s one in here. The one that I want to talk about is the highest one. This one. But I want to show you how the price is supposed to react to the volume clusters. Right? So, basically, you want to see a pullback where the price goes away from the volume cluster. Let’s mark this one. Price goes away from the volume cluster, hits it, and you go short from there. Then pull back to the second volume cluster. This one. Here’s the pullback. Here’s the short. Right? And the same principle goes for the third one. This one hasn’t been tested yet. That’s our level. So, we are waiting for the pullback. And when the price reaches that volume cluster, we want to confirm that somebody big is actually going to jump in in the market here and go short from there because we don’t want to trade this blindly. We want to see a confirmation. And for that we’ll use order flow and we will use it to spot the big players entering here or somewhere around that resistance because resistance is not just a line on the chart; it’s a barrier. It’s a zone. So, we want to see the big players are jumping in and that’s a confirmation to enter our short. So, in this case this is how I identified that resistance zone and let me now show you what happened on five-minute footprint when the price actually reached that zone. Okay. So, this is the footprint. The TradingView footprint the default TradingView footprint looks a bid different than this one. Uh you can change the settings so it looks exactly like mine. You just need to follow video. I’ll put a link below this one. So you can follow the video, follow the instructions in that video and set the footprint. So it looks like this. Anyway, here’s how the price was rising towards that resistance. And when the price reached that resistance, I was looking for confirmation. I was looking for somebody big joining the party. And here’s what I saw: I saw heavy volumes both at bid as well as at ask. When something like this happens around your resistance zone, that means that the market is absorbing the buying pressure, right? We’ll get more into this a little bid later. Now, I just wanted to show you one example and then we’ll move on from there. But here we have buyers pushing price up but at the same time we have sellers pushing price down right? That’s what the heavy volumes both at bid and ask are telling us and this is absorption market is absorbing that buying pressure and it is a confirmation that you should go short but important thing is that you are seeing heavy volumes unusually heavy volumes both at bid and ask. Another thing to notice here is the next footprint. We see sellers jumping in. Sellers are here on the bid. That’s aggressive sellers. They’re dominating. They are stronger than buyers in here. You can see it. If you take a look at the footprint also, you can take a look at the delta, which is below the footprint. And, again, we’ll talk more about this in detail. Now, I’m just showing you that one trade before we kick this off. But those are the signs that the big players are jumping in and that you also should join uh the party and enter your short. I would personally enter the short right after I saw that absorption setup right here. So, I went short from there. That’s what the big players are telling us here. Let me go back to the 30-minute chart here. This is again the same picture I show you before. Here I just want to recap the framework of what we are going to do. So first we are going to find a strong support or resistance zone. I do that using volume profile. That’s what I prefer. But you can also do it with let’s say price action fibo smart money concepts whatever you guys like whatever you use for identifying strong support and resistance zones whatever you have experience with. Okay. For me it’s volume profile. But today we are not actually going to focus on finding the support and resistance zones. We are going to focus on confirming the trade entries with order flow. Anyways the first step is identifying that support or resistance zone. The second step is confirming your trade entry using order flow. So here we identified that resistance zone using volume profile. waited to pull back. When the price reached that zone, we opened the order flow, confirmed the trade entry there and went short from there. Just to make this complete, let me show you how the trade played out and where I took my profit. This is where I went short, and the take profit uh at least for me, is the first barrier standing in a way. And the barrier is heavy volume zone. So this was the first heavy volume zone standing in the way. So that’s why my take profit was in here. Now, this was just an illustration of how I do things. But what I like to do now is show you each of those concepts separately, discuss them separately and show you how you can use them in your own trading. Okay. So, first we’ll be talking about identifying large trading activity. You can identify large buyers. If you take a look at this footprint, large buyers will show up on ask side of the footprint. That’s this side of the footprint. That’s ask. And you want to see heavy volumes there. If you do, then it’s big buyers. Very simply put. If you take a look at the second picture, then we have a footprint where there’s heavy volume on bid. That means large trading activity by sellers. Okay. And in the third one, we have heavy volumes both at bid and at ask. And you already saw that on that example before, right? Because this is absorption, buyers and sellers. We have heavy volumes at bid as well as heavy volumes at ask. That’s how the market is absorbing buying or selling pressure. So, we will cover that, but we won’t stop there. We will also cover a couple of other trade confirmations. We’ll cover traps traders, delta divergence, and unfinished business one by one with plenty of examples. So, let’s get to it. So, here I want to show you how to identify large trading activity. In other words, big players and we’ll talk about buyers. So, in this example, this is a five-minute chart of the NQ. A footprint chart shows how the price is dropping towards a support. I won’t talk about how we identify that support. I won’t focus on order flow confirmations here. Okay. So, the price reached that support and in this footprint there really wasn’t any confirmation to jump in the trade. Sellers were still dominating. You can see that we have heavy selling activity here around the bottom of the candle. So at this point still no trade. Okay. But the next footprint brings a completely different picture and it’s still within that support zone. What it shows is buyers jumping in and what you want to see is unusually heavy volumes and that means big players are jumping in and they’re likely to reverse the price. If you check out the numbers here, 258 contracts, 2568 contracts, that’s unusually heavy volume. And it showed on the ask side of the footprint that means buyers. So in this footprint, buyers started to jump in and it happened in our support zone. That’s important, right? If it happened anywhere else on the chart, it wouldn’t really mean much. But since it happened in this support zone, then it points to the big players reacting to that support. That’s the confirmation to enter your long trade because the big players are doing that as well. Now, the same scenario, only as a short-trade scenario, is here. The price is rising towards a resistance zone. Once it hits that resistance zone, what we see here is unusually heavy volumes at bid. That’s sellers. Big sellers jumping in here in our resistance zone. When you see this, you can jump in a short trade because the big players are jumping in and that’s the confirmation that you should jump in as well. If you take a look at the next footprint here, sellers are also jumping in. Strong sellers here, unusually heavy volumes. But here it might be a bid late, at least for me. I’m usually a little bid more aggressive. That means that usually in most cases I would just enter my short in here but here was uh another confirmation that the sellers really mean it. Okay. So, this is big sellers entering the market. Now, another example is an example of absorption. Absorption is [clears throat] when the market is reaching towards a strong support or resistance. In this case, it’s a support zone, and there it creates heavy volumes, unusually heavy volumes, both at bid and ask. It doesn’t need to be the same size of the volume, but it needs to be unusually heavy both at bid and at ask. In this case, it means that sellers are pushing the price downwards. But when the price reaches the support zone at this price level, buyers are starting to jump in and they are buying everything that the sellers are selling. That’s why the price stops and eventually reverses. So, that’s absorption: unusually heavy volumes both at bid and at ask. Now, here’s one last example and here you can see combination of absorption and buyers. So what happened here was that on this five-minute chart of Euro futures price was dropping towards a support and in that support there was absorption right here because we have unusually unusually heavy volumes both at bid and at ask. But that’s not all. After the absorption took place, there were also strong buyers here. see unusually heavy volumes at ask side of the footprint. So, those are buyers. Usually it is absorption first and then buyers or sellers following that absorption. In this case, it was the buyers and that was a beautiful confirmation to enter the long trade from there because first the market was absorbing the selling pressure and then buyers saw that started to jump in aggressively with market-buy orders and that drove the market upwards. Okay, so this was a confirmation of your support zone. Now, there are a couple of problems that you will face. The problems are related to order flow and to the TradingView order flow. One of those problems is that if you take a look at those two pictures here, they both show uh one footprint. At first glance, if you just take a look at the histogram without the numbers, you can’t really tell which one shows unusually heavy volumes because if you take a look for example here, this one, it looks like heavy volumes were traded here. But if you compare them, take a look at the numbers here with for example this part of the footprint on the left then this footprint on the left is actually way more important because it consists of way heavier volumes than the one on the right. But if you take a look at just the histograms without the numbers then you can’t really tell what’s going on. So, you are kind of forced to read the numbers. The reason is that in TradingView the histogram is calculated just based on one footprint. So the heaviest volumes within this footprint will show the highest histogram. But if it’s 80 contracts, 90 contracts or 500 contracts, it doesn’t really matter because it only compares it within this one footprint. And that’s why their histogram is not able to tell you exactly if you’re looking at unusually heavy volumes or no. So you kind of need to read the numbers to be able to tell where the unusually heavy volumes were traded. That’s problem number one that you need to read the numbers. That sucks. And, you know, if you’ve been following me for some time you know that I hate reading numbers and digging into details. I want to be simple. So that’s the first problem. The second problem is how do we tell if for example you see let’s say 534 contracts here. Is it unusually heavy volume or no? Like it depends like are you trading this in the Asian session in the morning or are you trading this in the peak hours of the U.S. session? That makes a big difference because 500 contracts could mean a lot during Asian session but not as much during the U.S. session. So, how do we actually tell if we are looking at unusually high volumes or no? So, yes, it depends on the time of the day. Also it depends on the trading instrument. 534 contracts could be a lot or let’s say on the Australian dollar futures but not so much on the Euro futures. So it also depends on that instrument. So, we have three significant problems that we face as or traders. There are a couple of ways around that. One of them is becoming really good at reading just one instrument. Let’s say you become an expert on trading the ES. You know the typical volumes during uh the U.S. session, during the Asian session. You know that by heart. You just remember that. You know if you see a 500 contracts that you’re looking at unusually huge number and that big player is trading there. Probably if you see 50 contracts, you know that this is uh like a typical number and you don’t need to be concerned about that too much. So you kind of need to become expert on one or maybe two instruments uh to be able to hold all that information about that instrument uh in your head and be able to use it in order flow. Okay. So, either become an expert on one or two instruments. But there’s also another way. I made this little indicator for TradingView. It’s called the Big Players Radar. It’s actually a new indicator available from today. What it is able to do is spot big players entering the market and it marks them on your chart. Like for example, those blue bubbles, that’s absorption. Unusually heavy volumes both at bid and ask. Those red bubbles, that’s sellers. Unusually heavy volumes on the bid side of the market. Those green bubbles, those are buyers. Using this, you are easily able to see what’s going on on the chart. What it does and how it’s calculated is it checks historical volume at the same time of the day. So if you take a look at this little drawing here, imagine that we are looking at the chart now and what the indicator does is it compares the volumes to the same time of day but from the previous days and compares that to that volume and then it’s able to tell whether you are actually looking at unusually heavy volume activity or not. Okay. So, it compares current volume with normal volume and it looks way back into history not just last two days like on this picture but it is constantly checking a lot of historical data to tell you uh what you are currently looking at whether big players are present or not and yeah it highlights the unusually large trades like you see here on this picture. You can either use this with price-action chart or a footprint chart. Let me show you one trade that I took recently on the British pound using this software. So what I was trading here was this heavy volume zone which I found using the volume profile and I marked this resistance on my chart and then I wanted to see confirmation that the big players are jumping in. I wanted to see either absorption or big sellers. What the Big Players Radar showed me were those two red dots and it told me that sellers unusually big sellers are jumping in. That means the big players. So when I saw that I went short. That was the confirmation, right? That’s all I needed. This is how the trade played out. This is where I entered. Those are the two big sell orders. The price started to drop from there and I exited my trade at the first heavy volume barrier right here. This is where I exited the trade following the rule which I showed you earlier because I always want to quit when the price is reaching the first barrier standing in my way. Here’s how the price reacted afterwards. It reacted to that barrier went upwards a bid but at that time I was already out of that trade. Very simple, right? Let me show you one more example of this. Check this out. There was this very strong high and what the price did was tested that high. See those two highs? This one. This one. Wicked past them and there was massive absorption confirmation for you to go short. Big buyers, big sellers. The buying pressure is being absorbed and boom. the market reacts. Very simple to use, very effective and it is really able to spot the big players for you. Here’s one more example of this. I had a trade on the ES where I was trading from this heavy volume zone here. This was my support zone and when the price reached that support zone started to absorb the selling pressure here. That was first confirmation and then those green bubbles with buyers huge institutional buyers jumping in and that was confirmation to enter the trade. You see, we are trying to spot the big players using order flow with this. This is software that takes the information and the data from order flow but is able to show you on a simple price-action chart. So you actually don’t need to read all the numbers, don’t need to read the order flow. You just see the dots and you use them for making decisions around key levels. One last example: price pulls back to this heavy-volume zone on the NQ. There was absorption which means that the buying pressure is being absorbed and also sellers big sellers jumping in and that means you should go short. Join the party. Okay, that’s how it works. Now, let’s talk about the other confirmations and let’s start with trapped traders. trapped traders are when one side of the market tries to push the price in their direction. In this case, on this example, buyers are trying to push the price up, but the opposite side steps in and takes control. See, sellers take control. Trapped traders are those who the original traders got trapped at the candle’s high or low. In this case, those buyers got trapped in here at the high of this candle and those traders are forced to exit fueling the reversal. Okay, so that’s trapped buyers. What TradingView does it is printing those black bars here when there’s imbalance. That’s another thing that I should mention here. When you compare sells diagonally like this, and the sell on the right side is three times or more bigger than the sell on the left side, then it’s marked as an imbalance. That’s this black bar here. And that means in this case very aggressive buyers dominating this footprint. But in this case, those aggressive buyers were not able to follow through and they got trapped. Okay, so the trapped traders are not only big buyers around the high but usually also imbalances. Okay, that will be important because I’ll be showing you this on a couple of examples where imbalances also play an important role. Let me now show you the examples. So, you’re looking at a five-minute chart of the Euro futures. The price is dropping towards support. And check out this footprint here. We have heavy volumes of sellers. We have those black bars here. That means selling imbalances that sellers are in control here. So if you did not see uh the rest of the chart at this point it would look like the price will drop, but it does not and instead goes up. Those guys were not able to follow through and eventually they will become trapped and they will need to quit their positions. Since they are sellers they will need to buy to get rid of their short positions fueling this up move. So that’s trapped sellers here. Another example is here. It is a resistance on the ES. the price moves towards that resistance. And here do you see all those imbalances. At this point, it looks like the market simply must go upwards. But what the next footprint shows is that sellers are actually dominating here and that those guys got trapped. They are trapped buyers and eventually they’ll need to quit their positions. If you see this around your resistance, it’s time to enter a short. Okay? It’s confirmation that those guys got trapped and the market will go the other way. Sometimes, it might be too late to enter a trade. Here when you see this candle and when it closes, this is actually the point where you are able to tell that those guys are trapped buyers. So, in this case, you need to decide whether at this point it is still okay to enter your trade or whether it’s late. Okay, it’s up to you to decide. But there will definitely be cases where the market simply runs too quickly away from your level and you won’t be able to jump in. But, you know, there will also be cases where this will work beautifully and you’ll have plenty of time to jump in, spot the trapped buyers or sellers and enter your confirmed trade. Let me show you one more example of this. Okay. Uh here the price was rising towards a resistance. At this point, we have couple of imbalances. That means that the market should continue to move up which it does in this footprint. We again have a couple of imbalances here. So at this point it’s still telling you that the market should go up but it doesn’t. Take a look at the next footprint. It is a bearish candle with heavy selling around the bottom. And those aggressive buyers weren’t able to continue to push the price higher. So, when the candle closes here, you know that those guys are trapped buyers and that you should go short. Okay. So that’s the confirmation by trapped buyers. Now what my Big Players Radar software can do is it can print this automatically into your chart. Again, it could be either price-action chart or footprint chart. Doesn’t matter. But when it spots the trapped traders, it will simply print it like this. In this case, it printed this bull trap bubble here. And from there, the price went downwards. So, if you use this, you actually don’t need to read the order flow and spot the trapped traders yourself. It will just print it there for you. All right. The next one is delta divergence. It is another confirmation for a trade entry. Let me start by explaining what delta stands for. Okay, delta is volume at ask minus volume at bid. So if you take a look at this footprint here, then it means this volume minus this volume and that’s the delta. If the delta is positive, then it means that buyers dominate in that one specific footprint. In this case, delta is positive. It prints below the footprint and it’s positive here. So, it means that in this footprint, buyers are dominating. If the delta is negative, then it means that sellers are dominating in that particular footprint. Normally when there’s a bullish candle the delta is positive. When there’s a bearish candle the delta is negative like this bullish candle delta is positive bearish candle delta is negative. What we’ll be looking for is a divergence. That means when price goes up but the delta shows down or when the price goes down and the delta shows up. Those are divergences. Divergence between price and delta. What does the price tend to do? It tends to follow delta. Right? So that’s why we are looking for it and that’s why we use it to track the big players. Let me show you a couple of examples. So, here we are looking at five-minute chart over the ES. Price is rising towards a resistance. If you take a look at this footprint, it has positive delta. Everything is as it should be. Price is rising. Delta is rising as well. But what about the next footprint? This one. It’s still bullish, but the delta is negative. It tells us that even though the price is rising, sellers are dominating here and price is likely to follow delta. So that means price is likely to drop. That’s the confirmation. Okay. Again, don’t look for this anywhere on the chart, it wouldn’t really mean too much. But if you spot this around strong support or resistance zone, that’s where it becomes important and that’s a signal for you to jump in because the big players are turning the market. Okay, it marks a reversal point. So that’s the divergence. One more example here. The price is dropping towards a support and right here you can already notice positive delta and that’s already telling you that something is fishy here. The next footprint is the same. It is a bearish footprint. The price is dropping but the delta is positive. Delta is telling you that the price should go up that the buyers are actually dominating here that the big players are jumping in and eventually price follows delta and goes up. Okay, so that’s the confirmation. First confirmation here, second confirmation here. That’s the price-delta divergence. Again, you can use my software to spot this for you. it will print this little exclamation mark below a footprint where there is a divergence between price and delta. So, in this case the price rose towards a resistance and in this candle which is a bullish candle there was a negative delta. So it told you that sellers are actually dominating here and it’s likely that the price will follow since this happened around your resistance. It is a signal to go short again. You can use this for order flow chart. It also prints on a simple price-action chart. Now here is one more example of this of the function from the Big Players Radar. We had a support which was based on this heavy volume zone here. The price was dropping towards it and there was divergence here and in here. From there price started to rise. By the way also notice large players here entering the trade. Those are buyers. That’s another confirmation to jump in that trade. And by the way, the take-profit target is the beginning of a heavy volume zone. First barrier standing in a way. That’s the first barrier right here. So the take-profit target would be somewhere in this zone. Now, one more thing that I want to show you is the unfinished business. You know the markets move is they move always in an auction. It’s a never-ending auction process up and down up and down. The footprint should look like this. At the low, if there is a low like this, there should be zero here. If it’s like this, then the auction is complete and now price could go up. But if there’s not zero here and the footprint ends, for example, like here [clears throat] at this high with heavy volumes both at bid and at ask and that’s how the auction ends. It’s called unfinished business, or you can also call it a failed auction. The market tends to test it and create successful auction out of this. Okay? So, the price may return to this level to complete the auction which was unfinished here. Now it doesn’t mean that the price always needs to go there, but the chances are that the price might go there. Especially if it’s heading that way, then it’s likely that it will continue this way to test above that unfinished business at least one tick above. It could be helpful for setting a potential price target. Let me show you how to use this. Okay. So, if you take a look at this 5-minute chart of the NQ and check out this high, we have this footprint with 19 contracts on bid and 48 at ask. That’s a failed auction, or in other words, unfinished business. I can print a line here like this. And if the price starts to move this way, it’s likely that it will continue that way and test at least one tick above the unfinished-business level to test whether somebody else is willing to trade above this because the market is always in search of liquidity. Okay, that’s why it’s testing above unfinished business. So that’s how this is supposed to work. Let me show you one more example here. And here, we have this low and in this low we have those volumes at low and at the same price level, we also have those volumes at bid. This is unfinished business. Imagine that you want to short from here and now you are looking for ideal place to quit your trade or at least part of your trade. Then, the way I would do it is place it place it one tick below that unfinished business. That means here because it’s likely that if the market starts to go down, it will want to test at least one tick below that unfinished business. Okay, not guaranteed, but chances are it will go like this. By the way, check out this trapped buyers. Anyway, let me show you one more thing here. The thing is that you can also do this on the Big Players Radar software because it will print those dotted lines where the unfinished business is. Right? So, in this case, let’s say you are shorting from here, the price is dropping and you know that there’s unfinished business here. So you might want to place your take profit or partial take profit one tick below this red dotted line because there is heavy volume at low of those candles or of this candle and the market might be inclined to test that and make a finished business out of it. The same goes for example for those lines. If the market starts to rise, it’s likely that it will hit those two lines because this is also unfinished business. One more example of this. Check out how aggressively the price is dropping here. Testing one unfinished business here. And there are three more. One, two, three. So in case like this, it’s likely that the price will continue to drop. And your take profit could be one tick below this unfinished business line because the price is likely going to test that zone to get rid of the unfinished business and see if there is anybody willing to trade below it. That’s how the market behaves and you can nicely track it with the Big Players Radar here. So far, we’ve covered quite a lot of concepts. So I want to do a little recap of them. First, we talked about identifying the large trading activity. If we’re talking about buyers, the buyers show on the right side of the footprint. If you see a footprint looking like this, it’s buyers aggressive buyers and large buyers jumping in and that means that the price is likely to go up. If you see a footprint looking like this with heavy volumes on the bid side of the footprint then the price is likely to drop since you are looking at strong aggressive sellers there. Then we were talking about absorption that’s heavy volumes both at bid and at ask and if you see that around strong support or resistance zone it means the market is likely going to react there. So that’s the large trading activity. We also talked about the trapped traders. You can see them in here. Those guys being trapped here and the price reversing from there. We talked about delta divergence, where we are looking for a scenario where the price is going one way and the delta is showing you that the price should go the other way. That’s the divergence. And if it occurs around your support or resistance, it’s a signal for you to jump in a trade. And the last one was unfinished business, which we covered a few moments ago. All right. So all those are concepts that you can use to confirm your trade entry. You can use the TradingView order flow like this. You can also use my software which will show you all of those either on a simple price-action chart. Also, it’s going to show you on a footprint chart. As you can see, we have the large trading activity here. We have the delta divergence, trapped traders, unfinished business, everything nicely visible on a simple price-action chart. Now, let’s talk about the cost. Since order flow data is not free, as far as I know, it’s not free anywhere. So, you kind of need to pay for it. If you’re using TradingView, you will need to have their Premium plan or higher to get the bid ask data that their order flow software is using. Normally, it’s $60 per month, but there’s a Black Friday deal on the TradingView. And that means that you can get that with massive discount for around $17 per month. I think if you buy the yearly subscription, you’ll be able to get that for this price. Okay, that means not only using the bid ask data but also you can use their footprint chart the one you saw in this video. Now as far as my software goes that’s the Big Players Radar software. Uh if you are members of our order flow Pack or our Combo Pack you’ll get it for free right now. If you’re a member, you’ll receive an email where you have instructions and guides how to install this, how to use this. It’s free for life. You guys enjoy it. Let me know how you like it. If you’re not a member, you can take advantage of our Black Friday deal that’s on our website at Trader-Dale.com. If you click this button which says Trading Course and Tools, you’ll be able to access it. There’s the order flow pack. From now on, this new software will be part of this order flow pack. So, you can get it like this or you can scroll down a bid and get the special Black Friday deal at the bottom of this page right here. The prices you see here are not the Black Friday prices. I’m shooting this video a little bid earlier, but by the time you are watching this video, there will be new prices, the lowest prices we’ve ever had for this combo pack. So, you can join us at the best price ever. Not just get your hands on all my educational packs and indicators included in those four packs, but also you can get that new Big Players Radar for TradingView and enjoy that from now on as well. We’ll also install everything for you. So you don’t need to worry about setting stuff up for yourself. Our tech team will set an appointment with you and install everything for you. set up workspaces and settings, connect the data, and take care of everything so you can hit the ground running. All right, so thanks for watching the video. I hope you liked it. Let me know in the comments below. I’ll be looking forward to seeing you next time. Until then, happy trading.