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Complete Guide on Futures Contracts (Orderflow Full Course Beginner to Advanced EP.1) — Transcript

by Andrea Cimi · 4,307 words · 592 segments · language en · Watch on YouTube

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0:00these are trading charts how you've
0:02always seen them these instead are
0:03trading charts how you've always dreamed
0:05you could see them it's basically like
0:07having xray vision and seeing the
0:09anatomy of Market movements and these
0:11are orderflow charts in this orderflow
0:14video course series I'm making on this
0:16channel I will take you step by step
0:18from knowing literally zero about
0:20orderflow to being able to read it and
0:21interpret it correctly and after back
0:23testing it properly boost your Edge and
0:25your profits and I will also give you a
0:27simple but effective trading strategy
0:30based on an orderflow manipulation
0:32pattern that you can start back testing
0:33right away and some other Logics that
0:35you can apply or Implement in your price
0:37setion strategy to optimize the daily
0:40bias The Zone refinement process and the
0:42entry trigger reading orderflow can give
0:44you an almost unfair advantage on all
0:47price action Traders showing you
0:48information that 90% of retails are not
0:51even aware of this stuff I'm about to
0:52show you is usually not used completely
0:55neglected actually by retail Traders but
0:57if you take a look at how day Traders or
0:59scalpers are mostly trading in the
1:01professional environment in the
1:02institutional side of the market they
1:04will most likely use these charts
1:06instead using price action is like
1:08trying to hit the target with a normal
1:09bow and arrow orderflow instead is like
1:11having a ballistic bow in both of these
1:13cases you have to be the one who shoots
1:16properly and the ballistic one can be
1:18kind of more expensive and maybe takes a
1:19little bit more time to learn the basics
1:21but once you've mastered the ballistic
1:22option you have a higher chance to hit
1:24the target be more precise and more
1:26accurate or it's the same as using a
1:28normal sniper rifle and a sniper rifle
1:30that also has a night vision heat
1:32scanner that shows you enemies in the
1:34dark in both of these cases you have to
1:36be a nice sniper but there are some
1:38things that you will only be able to see
1:40with night vision and let's say you're
1:41using price action Concepts like ICT or
1:44smart money Concepts using real
1:46orderflow is literally like putting
1:48those Concepts on steroids you probably
1:50heard of order blocks or fair value or
1:53liquidity grab or stop hunts these are
1:56all actually orderflow patterns and
1:58while yes with price action you can
2:00figure them out with a fairly good
2:02accuracy with real orderflow you can
2:04have 100% objectivity on them you don't
2:07have to guess that this is a stop run
2:09you can literally see stop orders being
2:11triggered and sweeping the book and you
2:13can see if there's a lot of small stop
2:15losses or it's one big stop order from a
2:18hedge fund or a bank you don't have to
2:19guess that the fair value Gap is from
2:21one Wick to the next one you can be
2:23actually way more accurate and draw it
2:25where there's an actual Gap in Fair
2:27Value you don't have to guess hey and
2:29probably this candle there is an order
2:31block which is a block of orders because
2:33with order flow you can actually see
2:35every single one of those blocks of
2:36orders in other words you can make these
2:38Concepts way more objective and very
2:41often have a more reliable confirmation
2:43for your entries so buckle up take paper
2:46and pencil and subscribe to the channel
2:48to be notified as soon as the next
2:50episode is coming out cuz this is a
2:52series of videos anyway I will link the
2:54whole playlist for this course down
2:55below now this course will work
2:56something like this in this first
2:58introduction lesson we will go deep deep
3:00into what orderflow is what are Futures
3:02contracts and the advantages of using
3:04these contracts in the next videos we
3:06will take a look at how real Market
3:08Mechanics Work in depth how the single
3:11orders are matched by the CME algorithms
3:14and how the auction of these order works
3:16then we will see how footprint or
3:18orderflow candles work how heat Maps
3:20work how to identify and use actual
3:23liquidity zones then we will learn how
3:25to interpret different orderflow
3:26patterns and different orderflow types
3:28of action and then we will learn how to
3:30give all of this a context and how to
3:32implement it in a price action strategy
3:35or in a purely volume-based strategy as
3:37well and last but not least we will
3:38learn about the best platforms the best
3:40brokers and the best prop firms so now
3:43let's start with the basics so when
3:44we're talking about order flow we're
3:46talking about a flow of orders and we're
3:48talking about buy and sell orders aka
3:51the supply and the demand so seeing
3:53order flow means seeing the supply and
3:55the demand interacting with each other
3:57these are also known as volumes so when
3:59we're talking about volume usually we
4:01refer to the total transaction between
4:03supply and demand usually with order
4:05flow we can be more specific about who
4:07is more aggressive but what you need to
4:09understand is that in order to see order
4:11flow you need access to the exchange so
4:13if you want to see all the volume all
4:14the transaction traded in the Nvidia
4:16stock in order to see the order flow of
4:18the market participant in Nvidia you
4:20need to go to the NASDAQ which is the
4:21exchange that Nvidia is traded in and
4:23access it through a data feed but with
4:26stuff like euro dollar or GBP JPY these
4:29are Forex payers these are currencies
4:31and they are not traded in the same
4:33place when we're talking about Forex
4:35currencies are mostly traded in the
4:37interbank spot market and unfortunately
4:40we don't have any data on this volume
4:42for orderflow you need a centralized
4:44exchange whether it is for stocks or for
4:47futures contracts and it's also
4:48important to clarify the difference
4:49between underlying asset and contract or
4:52derivative so the underlying assets
4:54usually are subdivided in asset classes
4:56so you have stocks or equities you have
4:58currencies you have bonds you have
5:00Commodities you got cryptos these are
5:02all asset classes in stocks you got
5:04individual stocks or index funds with
5:07currencies you have majors and minors
5:09with bonds you have treasury bonds and
5:10corporate Bonds in Commodities you have
5:12precious metals energy materials and so
5:15on and so forth these are asset classes
5:18so unless you want to day trade all of
5:20these things physically which is not
5:22necessarily the best way Brokers and
5:24Banks created derivatives so you got
5:26cfds you got Futures you got options and
5:29so on and so so forth so let's say we're
5:30taking a currency pair like euro dollar
5:33you can choose to use the cfd which
5:35usually is named exactly euro dollar or
5:37you can choose the Futures which is 6E
5:40that's a slightly different name with
5:41gbpusd you're going to have 6B if you
5:44click here on trading View and you press
5:46six you will see that all the currency
5:47Futures has a six at the beginning and
5:49then the first letter Euro British pound
5:52Japanese Yen Australian dollar Canadian
5:54dollar Swiss frank New Zealand dollar
5:56and that's pretty much it so you only
5:58have futures of some currencies but just
6:01paired with a dollar you don't have a
6:03lot of currency Pairs and even though as
6:04you can see these Futures are traded in
6:06the CME which is the Chicago mertile
6:08Exchange their volume is really low the
6:11Futures volume traded in currencies is
6:14really low in fact in the latest report
6:16of the bank of international settlements
6:17if you go to the PDF at page six you
6:19will see Foreign Exchange Market
6:21turnover by instrument and you will see
6:23the spot Market is around 30% the
6:25outright forwards are around 15% most of
6:28the volume is in Forex swaps currency
6:31swaps are just 2% options and other
6:33products which includes cfds constitutes
6:36a very small part of it so cfd Forex
6:39Traders are a very small percentage of
6:42that 5% and also usually cfd Traders are
6:45not even trading in this interbank
6:47market they're actually trading against
6:49their Brokers or against their prop
6:51firms so stating that in the euro dollar
6:53there's been a liquidity sweep of retail
6:56Traders stop- loss is complete
6:58and this is not an opinion this is based
7:00on data this is facts all right let's
7:02say gold the classic cfd is X Au USD the
7:06future is going to be GC for an index
7:08fund like an SNP 500 which always
7:11remember is an index so the underlying
7:13asset actually can't be traded other
7:16than with derivatives like with ETFs or
7:18futures or options or cfds so usually
7:21the cfd will be something like us 500
7:23and the Futures will be the micro
7:25contract of SP which is es and so on and
7:28so forth So when you say that you are a
7:30Forex Trader but you actually trade gold
7:32probably you mean that you are a cfd
7:34Trader I mean if you're using meta
7:36Trader 4 and cfd prop firms or a Forex
7:39broker you are trading cfds you're a cfd
7:41Trader not a currency Trader if you are
7:43a currency Trader you could also use
7:46Futures not necessarily cfds so let's
7:48start to put things in their place all
7:50right Forex is the asset class cfds is
7:54the derivative now there are some clear
7:56advantages in using Futures instead of
7:58cfds cuz Futures are traded in one place
8:01hence you have access to real volume
8:03they are regulated they're more
8:04transparent there is no spread markup
8:06from the broker the cons are that margin
8:09requirements are actually a little bit
8:10higher you need to pay for the data feed
8:12so to access the order flow of the
8:14exchange you have to pay a little
8:16monthly fee and also you need a platform
8:18that can take this data and show it to
8:20you in an understandable way and here
8:22you have Footprints and heat Maps I will
8:24show you exactly which platform I use
8:26later on this video cfds instead are
8:28traded in a decentralized Network so you
8:30don't have a single exchange where you
8:32can take the volume and the data hence
8:34they're not that transparent they're
8:35non-regulated they're banned in a lot of
8:37countries your broker is adding spread
8:40in most cases you also pay a swap for
8:42overnight positions so maybe for a swing
8:44Trader they're not always optimal and
8:46yes you can choose Islamic account in
8:48some cases in some Brokers but you
8:49probably end up paying more in
8:50commissions so Futures especially if
8:52you're a long-term Trader are much more
8:54convenient then it's also true that swap
8:56can be positive but in most cases if
8:58you're following a trend the the swap is
8:59not going to be on your favor Pros are
9:01access is easier prop firm has more
9:04competitive and more doable I would say
9:06challenge conditions but but these
9:08things are not necessarily good yes
9:10access is easier to the retail Traders
9:12but it also means that newbies and
9:14uninformed Traders can open an account
9:16so easily with 50 with one to 2,000
9:20leverage because I forgot to write
9:22leverage can be way higher so if you are
9:24a Ludo Maniac like most of you are you
9:26have easier access to self-destruction
9:29so not necessarily good same thing with
9:31leverage which sometimes is crazy a high
9:33and the fact that the platforms are
9:35basically free bro if something is free
9:37it's because you are the product because
9:39you're paying with your spread with your
9:41commission and with your losses or in
9:43case of social medias and porn with your
9:44attention and yes prop firms are more
9:46competitiv but as we saw exactly because
9:50rules can be too easy the financial
9:52models of prop fir is very risky so when
9:54you open a trade in Futures you are
9:56sending the order through the broker the
9:59broker ER also through the data feed is
10:01sending the order to The Exchange and
10:04the exchange through so-called matching
10:06algorithms finds you a counterparty in
10:09the market so the exchange finds you a
10:11counterparty confirms the order to the
10:13broker which gives you back the contract
10:15with cfds instead you're sending your
10:17order to your broker and most likely the
10:19broker will put your order in the
10:20so-called B book which means actually
10:22the broker is your counterparty and even
10:25if the broker says we are an STP broker
10:27we are an ecn broker
10:3099.9% of the time they are not they may
10:32be offering you ecn prices your order
10:35might go also straight through a process
10:38your order might actually be processed
10:40straight through but not straight
10:41through the liquidity providers straight
10:43to the b-book no dealing desk Brokers
10:45which are very few the only one I'm 100%
10:48sure is a no dealing desk broker is
10:50elmax and trust me you're not getting
10:52into these Brokers with $500 deposit
10:54most of ecn broker only provides you ecn
10:57prices but not an ecn execution the only
11:00way they will provide an ecn execution
11:02is if they put you in the aook cuz then
11:04in the ecn which is the electronic
11:06communication Network they will match
11:08your order with a liquidity provider
11:10which is usually a bank and by the way
11:12the same goes for prop firms but I think
11:14that with prop firms the percentage of
11:15people that are being actually a booked
11:17are even lower than normal Brokers so in
11:19the Futures Market the conflict of
11:21interest you have with the broker is
11:22only based on commissions which is okay
11:24so their interest is that you trade as
11:26frequently as with highest size as
11:29possible in cfds the conflict of
11:31interests is commissions spreads
11:33eventually swamps if there's a markup
11:34also there and counterparty gain because
11:36being your counterparty the broker is
11:38earning money when you lose same with
11:41prop firms so cfds are the big Casino
11:44they are dipped in conflict of interest
11:46but at the end of the day who gives a
11:48if you're profitable you're
11:49profitable both in Futures and in cfds
11:51so in Futures you have clear advantages
11:53like yes you don't pay a spread to the
11:55broker there's no swap you can have
11:57access to the order flow and it's a bit
11:59more more romantic if you want because
12:00you can access the market you could be
12:02actually trading against the bank or any
12:05other retail Trader against navinda Sara
12:07in his bedroom or against Umar ashra or
12:09any other retail Trader in the world so
12:11it can be more romantic in a way but
12:13it's not really a big deal at the end of
12:14the day you just need to be profitable
12:16but what are Futures as we discussed
12:18Futures are derivative contracts they
12:20were originally born in the field of
12:22Commodities in fact the cftc still holds
12:26the name of Commodities Futures Trading
12:29commission and they weren't necessarily
12:31created for a speculative purpose like
12:33cfds because cfds means contract for
12:37difference so it's been creating for
12:41gaining a profit speculating on the
12:44difference between entry price and exit
12:46price it's created for that Futures
12:49contracts instead were originally
12:50created for hedging purposes because
12:52let's say you're a company you're Ikea
12:54and you use a lot of wood and because of
12:56a problem in the supply chain of wood
12:58you expect the price of wood to get
12:59higher and higher in the next month or
13:01in the next year so instead of buying
13:03now a huge supply of wood that you
13:06wouldn't know where to put you can buy a
13:09Futures Contract today which basically
13:11entitles you at the end of the contract
13:13which can be three 6 months one year to
13:16buy that big pile of wood at this price
13:19so they were created for hedging
13:20purposes some of you may have heard
13:22about the coot report that's the reason
13:24why in the coot report which is the
13:26commitment of Traders report which is a
13:28cftc document that reports all the
13:30position of big players in each of the
13:32Commodities Market in each of the
13:34Futures Market there still is the
13:36commercial side of participants because
13:38they're using futures for hedging
13:41purposes for commercial purposes not for
13:43speculation so as I said you buy the
13:45Futures now because you think that in
13:47the future is going to go up so you want
13:48to cover yourself you want to head
13:50yourself from future price movements so
13:52you buy a future contract and at the
13:54deadline when the contract is expired
13:57you can take the under line commodity
13:59but what I want to be clear here is that
14:02there is an expiry so every Futures
14:04Contract even the one for S&P 500 for
14:07the Euro futures for the gold Futures
14:10they have an expiry date usually of 3
14:12months in fact if I write es and I open
14:15the menu you'll find that I have March
14:172025 contract June 2025 September 25
14:21December 25 and so on and so forth for
14:23the next 5 years and each and every one
14:24of those month has a different ticker or
14:27name if you will June is this M over
14:30here so es M which stands for June 2024
14:35U is for September Zed is for December H
14:38is for March and so on and so forth
14:40let's open the Euro Futures also here
14:42you have J which is April K which is May
14:45m which is June n which is July and so
14:48on and so forth so every one of these
14:49contracts has a different expiry date so
14:52when you buy a Futures and then you want
14:53to keep it also for the next contract
14:56for the next expiry you roll the
14:58contract what is also known as rollover
15:01which basically mean you get rid of this
15:02contract and you move on to the next one
15:04cuz this one is about to expire so every
15:063 months the futures of the S&P 500
15:09expires just like with options every
15:11single month on Friday options stop
15:14trading and they expire on Saturday this
15:16is for monthly options the same things
15:18happen with Futures so when there is a
15:20quarterly expiration of options which
15:23usually happens at the end of every 3
15:24months this thing is called also Opex
15:27option expiration if it happens at the
15:29same time that Futures also expires you
15:31can see some weird market movement and
15:33volatility now if I zoom in in the
15:35contract you will notice price is moving
15:38only
15:390.25 points at the time 50 75 81 8125
15:4450. 75 0 and so on and so forth so you
15:48have to imagine the price ladder of
15:51Futures is not divided in Pips but in
15:53ticks so the minimum price difference is
15:56one tick which for the ES is 0.25 points
16:01okay so to go from 80 to
16:0481. 1 Point equals four ticks and how do
16:08you calculate risk in Futures every tick
16:10usually has a value which is called tick
16:12value for S&P 500 is $12.5 per tick for
16:17the micro es contract which is the mees
16:20The Tick value is
16:22$11.25 per tick so if you're starting
16:24with the small Capital usually you're
16:26going to want to opt for the micro S&P
16:28500 or or micro contracts in general
16:30they are a little bit more expensive
16:32commission wise but they allow you to
16:34enter with a smaller size and control
16:35risk better another important thing
16:37about Futures Contract is that you can't
16:39open multiple positions in the same
16:41contract let's say price is here you
16:43have no open trade your position is flat
16:46or zero if you buy one contract your
16:49position is plus one so this is exactly
16:51the level you're in let's say now price
16:53is rising up and you want to increment
16:55your position so what you're going to do
16:57you're going to buy one more contract
16:59here so plus one but in Futures you're
17:01not going to have two different one
17:03contract positions both of these will be
17:06mediated will be averaged into one
17:09single position of plus two so these two
17:11will go and you'll be left with a single
17:13operation exactly in the middle of plus
17:16two so your long two contracts at the
17:18average of the two prices this is how it
17:21works then let's say you want to head
17:23yourself against a possible downturn of
17:25the price so you choose to sell over
17:28here to take this sell movement so what
17:30you going to do let's say you're going
17:31to sell one contract so your position
17:33will be minus one right here but as you
17:36press the sell button you're not going
17:37to have a sell a new sell position here
17:39this minus one will be taken away from
17:41the plus two and you're just going to be
17:43long one contract so there is no hedging
17:46in Futures in the same contract the only
17:49way to do this and make it actually work
17:51like you imagine it in your mind is if
17:53say you open long on the es and then you
17:56short the micro contract so in the sing
17:59contract you can't hedge and you cannot
18:01have multiple different positions in
18:02different contracts yes you can also
18:04there is a slight difference how stop
18:06losses work how take profits Works
18:08usually if you buy one lot of euro
18:10dollar you just place your stop- loss
18:12right below here as your stop- loss and
18:14maybe your take profit above here but as
18:16I said we're just working on numbers of
18:18contracts so since you're long one this
18:21will equal minus one and this also would
18:23equal minus one so if you think about it
18:25if you're buy here and selling here and
18:28this is the price if you put a sell
18:30because this is minus one above the
18:32price it's called a sell limit because
18:34it's a sell order that will be triggered
18:36once the price reaches this level and
18:38hopefully then comes back the one here
18:40is instead will be a breakout order so
18:42it will be a sell stop so in Futures
18:45there's actually no stop loss or take
18:47profit these are cfd names in Futures
18:50you will just put a sell limit and a
18:52sell stop as a stop- loss vice versa of
18:54course if this is your sell entry and
18:56this is your Target and this is your
18:58stop loss and minus one contracts they
19:00will be simply in a plus one order and
19:03let's say price is here this will be a
19:05buy limit and this will be a breakout
19:07order so a buy stop as an example this
19:10is the order flow platform I'm using to
19:12trade Futures and as you can see you can
19:14buy market sell Market betas we will see
19:16in the next part so say I'm opening a
19:18market contract right now so let's make
19:20an example on a simulated account to
19:23make you understand exactly what I mean
19:24now these candles are a little bit
19:26different than the one you're used to I
19:27know we will discuss the in the next
19:29video but let's say we want to sell
19:30we're going to set the quantity for
19:32example five contract we're going to
19:34sell the contract as you can see I have
19:36five contracts open right here in order
19:38to place myself a stop- loss I will have
19:40to put a buy stop let's say Above This
19:43High let's see if it's going to be taken
19:45okay seems like price is going lower so
19:47let's put ourself a take profit how
19:48we're going to do it with a buy limit of
19:51five contracts right here perfect our
19:53take profit has been taken but as you
19:55see + 5 equals 0 my position is flat but
19:58this this order is still a stop order
20:00that I placed myself to cover myself but
20:02now I have to remember to remove it
20:03which is kind of annoying that's why we
20:05use Oco strategies which means one
20:08cancels other where I can say okay five
20:10dicks below or above you put my stop so
20:13we're adding the first bracket and then
20:15another Target say 10 ticks below so
20:18we're adding this bracket we give a name
20:20test we save it and now it's here so now
20:22if I sell Market I will put the stop
20:25above here the target below here will
20:27let the price go to whichever of those
20:29perfect as you see it hit the stop loss
20:31and the takeprofit didn't stay there it
20:33was canceled because one cancels other
20:36so as you can see it can be a little bit
20:37more complicated to get used to these
20:39kind of things at first as with
20:40everything it just takes a little bit of
20:42time to learn then you set up yourself
20:43an ooco strategy and it's done so this
20:45was an overview of future contracts how
20:48they work what they are in the next
20:50video we're going to get deep into what
20:52order flow actually is how is it
20:54structured in extreme detail and we will
20:56fully understand Market mechanics
20:59how the market actually works not some
21:01weird interbank algorithm no how Market
21:04actually work okay so I hope you really
21:06understood the power of orderflow and
21:08how Futures Contract work if you have
21:10any question feel free to comment leave
21:11a like if you enjoyed this video And
21:13subscribe to the channel so I'll see you
21:14in the next video you're welcome by the
21:16way ciao

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