Stupid Simple Order Flow Strategy — Transcript

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1. 0:00He placed top three in the world trading
2. 0:02competition four separate time.
3. 0:04>> Fabio.
4. 0:05>> I wait for the market to show its hand
5. 0:07first and it always does. Draw the
6. 0:09volume profile over the session. Shows
7. 0:11you where the most money traded. That's
8. 0:14the value area. Now the trade. Price
9. 0:16drops below the value area low. Second
10. 0:19it does, your eyes go on the volume
11. 0:21bars. If they are declining, nobody
12. 0:24really selling and the money isn't
13. 0:26following price lower. Then the buyers
14. 0:28step in and form a wall the sellers
15. 0:31can't push through. There's the bubble,
16. 0:33sellers getting absorbed. Price gets
17. 0:35pulled back towards the money. When it
18. 0:37closes back inside the value area and
19. 0:40the volume bars grow again, that's your
20. 0:42long. Stop below the low, target the
21. 0:45value area high, right back into the
22. 0:47money.
23. 0:47>> Fabio is one of the most legitimate
24. 0:49traders, has the best track record by
25. 0:52far. He does trade real order flow.
26. 0:54TradingView doesn't offer real order
27. 0:56flow,
28. 0:57um which kind of stinks. But this
29. 0:59particular version of a strategy that he
30. 1:01trades, we could actually build this
31. 1:03concept into an indicator that we can
32. 1:05use every single day. Let's go try it.
33. 1:08So I went over to luxalgo.com/quant
34. 1:10and then I gave it the exact parameters
35. 1:13that he had for potential signals. And
36. 1:15what I noticed is when you're doing a
37. 1:17real-time volume profile, the value
38. 1:19areas can adjust a lot depending on what
39. 1:22you're trading and the volume. And so
40. 1:24that got me thinking for TradingView
41. 1:26specifically, maybe we just trade the
42. 1:28previous day's value areas. And actually
43. 1:31turned out to be an incredible
44. 1:32indicator. If you go about in the
45. 1:34settings of this indicator right here,
46. 1:37you can actually click to show previous
47. 1:39day's signals or the current day's
48. 1:41signals. And what I have it looking for
49. 1:44is volume to decrease when it exits out
50. 1:47of a value area high or low of the
51. 1:49previous day and then creates a reversal
52. 1:51type setup. In this case, it's an
53. 1:53engulfing candle. And what you would do
54. 1:55is you would end up taking your
55. 1:57position. Once you get that signal,
56. 1:59targeting either a value area low, a
57. 2:02POC, or your own risk. But, let's just
58. 2:04target the most recent level, which is
59. 2:07that POC, and it ends up hitting it
60. 2:09quite perfectly. Now, the other thing I
61. 2:11realized is that this works really well
62. 2:13on the Nasdaq 15-minute chart. And the
63. 2:16only issue is with the 15-minute in this
64. 2:17exact setup is you might not get a trade
65. 2:20every single day. But, when you do get a
66. 2:23signal, these setups are honestly
67. 2:25phenomenal. Look at this long here, stop
68. 2:28below the low, targeting, in my opinion,
69. 2:30the POC ahead, and let's see if it plays
70. 2:32out. Absolutely rips back to the high.
71. 2:35Now, this is nowhere near what Fabio
72. 2:37uses because he uses real order flow and
73. 2:40trades multiple different strategies.
74. 2:42But, it's fun to try to create an
75. 2:44indicator on top of one of his ideas.
76. 2:46But, I'm happy to give you this
77. 2:47indicator for completely free. Just
78. 2:49comment the word profile and I'll send
79. 2:51you a link. Or, you can [music] head
80. 2:53over to the LuxAlgo library and search
81. 2:55value area reversion signals, and it's
82. 2:57right there.