Do yourself a favor; learn Order Flow.
Summary
TLDRThis video script delves into the concept of 'order flow', a key strategy for trading profits, and its intimate connection with market structure. The speaker explains the significance of short-term highs and lows, fair value gaps (FVGs), and how they indicate price movement intentions. Emphasizing the importance of understanding time frames, the script guides viewers through identifying and utilizing order flow lags to predict market trends, highlighting the superiority of FVGs in revealing the market's true direction.
Takeaways
- 😀 Orderflow is a critical concept for understanding market movements and has been a significant source of profit for the speaker and MMT members.
- 🔍 The speaker is passionate about orderflow and fair value gaps, which are integral to their trading strategy and have led to a deep appreciation for these concepts.
- 📈 Market structure and orderflow are closely related, with the former providing a broader view and the latter offering more precise insights into current market dynamics.
- 🎯 Swing points and fair value gaps are used as targets in trading, with the speaker emphasizing the importance of identifying these on different time frames.
- 📊 Short-term highs and lows are pivotal in understanding orderflow, as they can indicate the direction of price action and are connected to fair value gaps.
- 🧩 Time frames are fractal, meaning that a short-term high on one time frame may be an intermediate high on another, and understanding this relationship is crucial for trading.
- 📉 An orderflow lack is characterized by a swing point followed by a fair value gap, indicating a bearish or bullish lag depending on the context.
- 📈 Fair value gaps are superior indicators of market intent because they reveal the footprint of larger market orders and are precursors to orderflow lacks.
- 📝 The speaker suggests that understanding orderflow lags on the daily time frame is fundamental before applying the concept to other time frames.
- 🔑 The direction of price movement is indicated by orderflow lags, with fair value gaps confirming the market's intention to continue in a particular direction.
- 📚 The speaker encourages conducting case studies on orderflow lags, especially on the daily time frame, to better understand how they reveal the market's intent.
Q & A
What is the main concept discussed in the video script?
-The main concept discussed in the video script is 'Order Flow', which is a trading strategy that the speaker claims has led to significant profits.
What is the relationship between Market Structure and Order Flow?
-Market Structure and Order Flow are closely related. Market Structure provides a broader view of the market, while Order Flow offers a more detailed and accurate representation of current market conditions.
What are the key elements of an Order Flow Lack?
-An Order Flow Lack consists of three key elements: a swing point, a fair value gap, and a fair value area. These elements indicate the intention of price movement.
Why are fair value gaps considered superior in the context of Order Flow?
-Fair value gaps are considered superior because they reveal the intention of price movement and serve as the footprint of the bigger will in the market. Without a fair value gap, there is no Order Flow Lack or fair value area.
How do short-term highs and lows relate to intermediate term highs and lows?
-Short-term highs and lows are essentially the same as intermediate term highs and lows but on different time frames. A short-term high on one time frame might be an intermediate term high on a lower time frame, and vice versa.
What is the significance of the daily time frame in understanding Order Flow?
-The daily time frame is significant in understanding Order Flow because it provides a strong and clear indication of the market's direction. It is considered more important than lower time frames due to its higher impact on price movement.
How can the concept of fractals help in understanding Order Flow across different time frames?
-The concept of fractals helps in understanding Order Flow by showing that the same patterns of highs and lows repeat across different time frames, just at different scales. This helps traders to recognize similar market behaviors regardless of the time frame they are analyzing.
What is the purpose of identifying short-term highs and lows in the context of the script?
-Identifying short-term highs and lows helps traders to understand the potential retracement levels and continuation points in the market. These levels can act as resistance or support and are crucial for determining the direction of price movement.
How does the speaker use the concept of Order Flow in trading?
-The speaker uses the concept of Order Flow to determine the market's intention and direction. By analyzing the presence of fair value gaps and the formation of Order Flow Lacks, the speaker can make informed trading decisions based on the market's underlying structure.
What is the importance of understanding the fractal nature of market structure and Order Flow?
-Understanding the fractal nature of market structure and Order Flow is important because it allows traders to recognize patterns and behaviors across various time frames. This can lead to a more comprehensive and accurate analysis of market conditions, enhancing trading strategies.
Outlines
💡 Introduction to Order Flow and Market Structure
The speaker introduces the concept of order flow, which is central to their trading strategy and has been highly profitable. They express a deep affection for fair value gaps and their role in trading. The video aims to cover market structure first, then delve into order flow, showing their close relationship. The speaker revisits the topics of fair value gaps and swing points, emphasizing their importance as targets on the daily time frame. The focus is on Euro JPY, with targets marked mainly to the left side of price action, hinting at the significance of order flow. The speaker also discusses the importance of short-term highs and lows and how they are distinguished from intermediate term counterparts, especially in relation to fair value gaps. The concept of price always moving towards a 'P' (presumably a price point or level) is introduced, indicating the need to understand the direction of price action.
📊 Deep Dive into Market Structure and Time Frames
This paragraph delves deeper into market structure, discussing the role of intermediate and short-term highs and lows in determining fair value areas. The speaker explains how these elements provide a broader view of market intentions and how they relate to order flow. The concept of time frames is highlighted as crucial, with the speaker emphasizing the importance of understanding how market structures appear differently across various time frames, such as the 4-hour and 1-hour charts. The paragraph also explains how short-term highs and lows can be seen as intermediate highs and lows on lower time frames, illustrating the fractal nature of market structure. The speaker guides viewers through the process of identifying these structures on charts and what they signify in terms of potential price retracements and continuations.
🔍 Order Flow Analysis and Its Significance in Trading
The speaker passionately explains the intricacies of order flow, positioning it as a more accurate representation of current market activity compared to the broader view provided by market structure. They define an order flow lag as having a swing point followed by a fair value gap and a fair value area, which together indicate the market's intention. The importance of fair value gaps is underscored as they are seen as superior indicators of market direction. The speaker uses examples from different financial instruments to illustrate how order flow lags, marked by fair value gaps, can predict price movements with higher probability. The paragraph concludes with an encouragement to conduct case studies on order flow lags, particularly on the daily time frame, to understand their role in revealing the market's intentions.
📉 Understanding Price Intention Through Order Flow Lags
The speaker continues to elaborate on how order flow lags, particularly those with fair value gaps, can reveal the true intention of price movement. They discuss the daily time frame's significance and how it influences price action, using Euro JPY as an example. The paragraph explains that the presence of an order flow lag with a fair value gap suggests a strong likelihood that the market will move in a particular direction, as seen in the case of USD/CAD and NASDAQ. The speaker emphasizes the importance of recognizing these patterns to predict future price movements effectively. They conclude by reiterating the importance of order flow in their trading methodology and encourage viewers to study order flow lags to gain a deeper understanding of market dynamics.
🚀 The Core of MMT Trading: Order Flow
In the final paragraph, the speaker summarizes the importance of order flow in the MMT (Market Manipulation Theory) trading approach. They stress that all their trading strategies are based on a deep understanding of order flow, highlighting its critical role in making informed trading decisions. The speaker thanks the audience for their attention and implies that grasping the concepts of order flow and its implications for market direction is foundational to successful trading.
Mindmap
Keywords
💡Orderflow
💡Fair Value Gaps (FVG)
💡Market Structure
💡Swing Points
💡Short-term Highs/Lows
💡Intermediate-term Highs/Lows
💡Time Frames
💡Retracement
💡Fractal Understanding
💡Intention of Price
Highlights
Introduction to the concept of orderflow as a key to understanding market movements and its importance in trading.
The relationship between market structure and order flow and how they are closely related in trading strategies.
Explanation of PD rates and fair value gaps, and their role in identifying targets in trading.
The significance of swing points and fair value areas in the daily time frame for setting trading targets.
The concept of short-term highs and lows and their distinction from intermediate term highs and lows.
How short-term highs and lows leave behind fair value gaps, indicating the direction of price movement.
The importance of understanding price action direction towards a P (presumably 'Price') and its role in trading decisions.
The significance of time frames in trading, especially the use of daily, 4-hour, and 1-hour time frames for identifying swing points and fair value gaps.
How intermediate term highs and lows provide a broader view of market structure and its implications for short-term trading decisions.
The fractal nature of market structure, where short-term highs on one time frame can be intermediate term highs on another.
The role of order flow in providing a more accurate representation of current market conditions compared to market structure.
Dissection of an order flow lag, which includes a swing point, a fair value gap, and a fair value area.
The importance of fair value gaps in confirming the existence of an order flow lag and its implications for market direction.
How order flow lags indicate the intention of price movement, which is crucial for understanding market trends.
The practical application of order flow analysis in trading, with examples from Euro JPY and other markets.
The significance of higher time frames in trading, where the daily time frame is stronger and more influential than lower time frames.
Encouragement for traders to conduct case studies on order flow lags to deepen their understanding of market dynamics.
Transcripts
a concept that made me and the mmt
members a lot of profit is orderflow
orderflow is my baby it is my everything
orderflow is what made me fall in love
with fair value gaps and today I want to
introduce you to orderflow and if you
don't watch out you will also fall in
love with fair value gaps all right
perfect in the third video of the MMC
series I want to go over first finish
that market structure topic we talked
about in the previous video then move on
to order flow and you will see as well
how closely Market structure and Order
flow are actually related to each other
in the first slide I want to go over
what are the PD rates so revisiting the
first video that we had we talked about
fair value gaps fair value areas which
we mainly talked about in the previous
video and also swing points we talked
about the daily time frame how we want
to use the daily time frame for those
fair value gaps and those swing points
those are our targets so let again Mark
out those targets for this video I want
to go over Euro JPY and I want to Mark
out the following targets so again you
will notice that mainly my targets are
to the left side of price action this
has a reason and this has to do with
order flow which we're going to touch on
later on now focusing on how we deliver
towards this swing low right there and
also this swing low sitting right there
on again the daily time frame now moving
on to the next slide we need to discuss
then Market structure because in the
previous video we talked about
intermediate term highs intermediate
term lows which again like mentioned
discussed in the previous video so those
intermediate term highs intermediate
term lows is not something we will dive
into to in depth in this video we'll
revisit them yes but we will move on to
short-term highs and short-term lows
right there and how they transfer over
to orderflow so to understand that let's
dive into those short-term highs and
short-term lows a little bit deeper
short-term highs and short-term lows
this right here in the left side you
will see a shortterm high a short-term
High very much like an intermediate high
is simply set a swing high so it all
starts with understanding those swing
points but the difference between the
short-term high and that intermediate
high is that this short-term high does
not have those swing highs lower to the
left of it and lower to the right of it
and also a huge difference which is very
important to understand is that that
short-term High leaves behind a fair
value Gap right there so a short-term
High swing High followed by an
fvg those are the short-term highs that
we want to focus on then in a bearish or
in a lower Trend short-term highs will
be protected until we reach an
intermediate term low now what that
exactly means what that looks like is
what we're going to go over in a little
bit but before we do that we of course
need to understand a short-term low as
well well the exact same just inversed
so a swing low right there followed by
an fvg short-term low does not have to
have those swing lows higher to the left
of it and higher to the right of it so
the short-term low swing low followed by
an FG in a bullish in a higher Trend a
short-term low will be protected until
we reach an intermediate term high this
All Leads back to the following
understanding price is always moving
towards a p it is our job to find out
which pay is next this is all helping us
into understanding the direction of
price action now before we dive into the
chart I want to go over one more slide
right here the time frames again I need
your full attention with these slides if
I didn't already have that because this
is an extremely important topic and can
be extremely confusing if you do not pay
attention so here swing points fair
value gaps we marked them out like we
did in the beginning on The Daily time
frame again so those swing points they
are our targets then we can use
short-term highs and shortterm lows on
the 4H hour and the 1H hour time frame
right there very similar to what we did
in the previous video with intermediate
highs and intermedium lows also on the
same exact time frames but there's a
difference between those and that's what
we're going to go over so let's dive
into the chart so on The Daily time
frame right here we are going to be
focusing on this low and this low right
there as our main targets going down one
time frame into the 4-Hour time frame
right here we will start to notice that
again we have intermediate term lows and
intermediate term highs I'm going to
again Mark out those intermediate term
highs and intermedium lows with those
blue circles like we did in the previous
episode so there we have intermedium
high there we have intermediate term low
right there these are the main
intermediat term lows and intermediat
term highs that we want to focus on now
these intermedium highs intermedium lows
they give us that fair value area like
we saw in the previous episode this for
example is this fair value area the
overall intermedium highs intermedium
lows they give us the bigger view the
birds eye view of what Market structure
wants to do with short-term highs
short-term lows and then moving on to
orderflow we are going to dive deeper
into how far price can retrace and what
we can expect in the next few candles so
we are going to get more accurate and it
starts with those intermediator highs
and those intermediator lows because if
we take the first intermedium High and
the first intermedium low sitting right
here then when we move from an
intermedium high to an intermedium low
we will see that shortterm highs will be
created on the time frame below so if we
go into the lower time frame and now we
focus on the price action from this
intermediate High towards this
intermediate term low right there Then
here on the 1 hour time frame we can see
when this intermediate term High gets
created we actually have a short-term
high at that moment in time because we
have this swing High followed by this
fair value Gap right there this
shortterm high right here follows
through and holds what does that mean
that means off of that short-term high
right there we continue lower creating
new bearish fair value gaps but if we
dive into even a lower time frame and we
focus on the next piece of price action
sitting right here then we will see on
the 15minute time frame from this 4H
hour intermedium High towards this 4our
intermedium low right there we again
create those short-term highs so this
right here is a short-term High followed
by these fair value gaps right there we
come back into this fair value Gap right
here then afterwards we create a new
swing high sitting right there that is
again a new short-term High followed by
this new fair value Gap right there then
we retrace back into this fair value Gap
again right here and we leave behind a
new swing High creating a new shortterm
high to continue lower then we have one
last sting into this fair value Gap
right there where we again create a new
short-term High to eventually reach the
target of the intermediate term low that
we have towards the left right there so
what do we see in this movement lower
right there towards the intermediat low
we see that short-term Highs are holding
price so they do not get traded back
above those short-term Highs are getting
respected meaning that we do not trade
above those short-term highs we retrace
back into those fair value gaps to then
continue lower off of it until we reach
this intermediate term low right there
because like we mentioned in the
PowerPoint slide those short-term highs
will hold until we reach an intermediate
term low because right here this is
where it gets messy right now we have
some short-term highs holding some
short-term lows holding it gets very
chaotic and that is because we have
reached a main target in the form of
this intermediate term low right there
and whenever we have reached that
intermediate term low right there then
we can expect a bigger retracement as
well but before we look at those blue
circles right there let's look at the
shortterm High actually right here on
the 15 minute these short-term highs
that we have on the 15 minute if we go
down time frames into the 5 minute for
example right here or into the one
minute right here then what do we notice
that those 15minute short-term highs
turn into what one minute intermediate
term highs and these intermediate term
highs on the one minute if we now again
zoom out then on the 15-minute time
frame those are shortterm highs and if
we zoom out further then we go back to
the 4-Hour time frame these intermediat
term highs and intermediate term lows
that we had on the 4H hour time frame
are what on The Daily time frame a
shortterm high and a short-term low
right there now I'm going to tell you
why that is important to understand if
we move on to the next slide right here
Market structure now leads to the
understanding of order flow we
understand those intermediate highs
intermedi lows short-term lows
short-term Highs but short-term highs is
on another time frame an intermediate
term High and a short-term low on
another time frame is an intermediate
term low so if we have a short-term high
on the daily time frame that's going to
be an intermediate High most likely on
the 4-Hour time frame and the same can
be said if we go down time frames even
more so for example a short-term low on
the 1 hour time frame could be an
intermediate term low on the 15-minute
time frame it is all fractal and we're
working towards a fractal understanding
of the market arguably one of the most
important parts in trading is
understanding how those time frames show
the same exact thing just on different
time frames and that is what we're
working towards here because now this
daily time frame for example has a
short-term high right there this on the
4-Hour time frame is an intermediate
term high right there now why am I
telling you this and why does it feel
like I'm trying to confuse you well the
thing that I'm trying to prepare you for
is the following this is so we don't get
lost in the lower time frames later on
so when we learn how to navigate those
different short-term highs intermedi
term highs on different time frames then
this in the beginning might be a little
bit confusing but it will be a lot more
confusing if we don't understand this
when we dive into the lower time frames
so if you understand that those
short-term highs and intermediat term
Highs are essentially the same
intermediat term highs or short-term
highs short-term highs or intermedi term
highs then you understand this and
that's perfect then we can move on now
moving on we now dive into order flow
because those short-term highs and
short-term lows that we just talked
about where swing High needs to be
followed by a fair value Gap that is
Market structure yes but if we now dive
deeper into that and we can actually
dissect it so again like I mentioned
Market structure is the bird's eye view
order flow is the more accurate
representation of what is happening at
this moment in time then that short-term
High followed by a fair value Gap is an
orderflow lack so what does that mean
let's dissect that orderflow lack
breaking down orderflow lack it has all
three eray it has number one a swing
point right there so at the top we see a
swing point and that is what makes it a
lack so when I refer to a lag a lag in
price action is when we have a swing
High followed by a f Gap or swing low
followed by a f Gap then it would be a
bullish lag this is a bearish orderflow
lag and after that swing point
we want also a fair value Gap right
there so we see the order flow lag also
has a fair value Gap but an order for La
has one more PD and that is of course
the fair value area because the
retracement that we had up right there
is what we talked about in the previous
video that is that offering of the value
to then continue lower leaving behind
that fair value area now why is that a
fair value area because didn't we just
mention in the previous video that a
fair value area is from an intermedium
low towards an intermedium high and vice
versa well what did we just talk about
in the previous slide an intermedium
high is the same as a short-term high
intermedium low is the same as a
short-term low so this is a fractal
understanding of a fair value area now
this is where it gets in my opinion even
more interesting because I'm just very
passionate about it right here Order
flow then tells us the intention of
price but let's work that back because
we mentioned in the first video that
fair value gaps are superior why because
you don't have an orderflow lack if you
don't have a fair value Gap you don't
have a fair value area then if you don't
have a fair value Gap so order flow
tells you the intention of price yes but
fair value gaps tell you the intention
of price we see the intention of price
is again orderflow but those fair value
gaps they are superior for a reason they
are the most important and it's
beautiful because this is exactly how I
got to understand fair value gaps how I
fell in love with fair value gaps
because then I understood hey it's all
about fair value gaps so here no fair
value Gap is No orderful Lack no fair
value Gap is no fair value area here we
see a lack where we only have that swing
point at the high right there we don't
have a fair value Gap meaning that we
don't have that orderful lack and we all
also don't have that fair value area so
in order for it to be an oral La again
we need a fair value Gap and in order
for us to need a fair value area we need
a fair value Gap as well and that is
talking about those short-term highs and
short-term lows now we want to start off
with understanding the daily time frame
because this in itself is a lot of
information and it's quite Advanced if
you can understand this you are doing an
amazing job but we first want to
understand the daily time frame before
we apply it to any other time frame so
looking at order flow through the length
of the daily time frame so then coming
back to Euro JPY right here where we
left off these blue circles where on the
4-Hour time frame those intermediate
highs and intermediate term lows then on
the 15minute time frame right there we
understood that here these are
short-term Highs but these are not only
short-term highs these are now order
flow lacks that we can continue lower
off of these these order flow lags tell
us the intention of price and what I
mean with the intention of price is the
intention is where price truly wants to
go towards so if price wants to continue
higher wants to be bullish it will be
told by order flow lags if price wants
to continue lower it will also be told
by bearish order flow lacks so if we
again zoom out to the Daily time frame
because what do we then have on the
daily time frame well what does it look
like we have a perfect order flow lag
where we have the swing high right there
the swing Point number one perfect we
have one more candle in the making right
there and now we have a fair value Gap
sitting right there and we also have the
fair value area sitting right here so we
have all three PD rays and that is
simply because we have a fair value Gap
going lower with that shortterm high so
on The Daily time frame we can Now
understand that if we want to continue
lower right here and reach for this
swing low and this swing low then we
will not trade back Above This high
right there because that is the high of
the order flow lack this then tells us
the intention of price right here where
we sting into it into the F Val Gap and
we can continue lower towards those
targets so we're looking at those daily
targets and those daily order flow lags
and if we even dive into it a little bit
deeper than here we have this fair value
Gap right there what gets created at
that daily fair value Gap a 4H hour
intermediate term high right there what
gets created right here if we go into
the 1H hour time frame 1 hour shortterm
highs right here and right here and
which highs do not get taken out it is
consistently the shortterm highs that
are protected right there and we
continue lower but what about a again
this order flow lag for example right
here that we have that we can continue
lower off of what's important to
understand that we previously right here
towards the left we talked about this
intermediator low getting taken right
there so we can expect a bigger
retracement but that bigger retracement
happens because on the time frame above
us there is a new orderflow lack so if
we zoom out the reason why we create the
retracement is because we are retracing
back into the fair value gap of a daily
order flow lag right there and this is
what we're going to build on to because
the higher the time frame the more
important the time frame so the daily
time frame right here is stronger than
the 1 hour time frame and if we go up
time frames more then the higher we go
the stronger the time frame so here what
can we safely assume that we are not
going to take out this High That Swing
high that we have right there before we
might take out this low now this fair
value Gap is not confirmed yet meaning
the orderflow lack in itself is not
confirmed just yet but if we create that
fair value Gap right here then we can
safely assume that we have a good
understanding of the direction because
we are most likely going to take out
this low first before we trade back
towards that high so to give you a few
examples and to build towards the next
video which is candle science then right
here we see order flow on US Dollar
Canadian Dollar on The Daily time frame
again we have this daily Val gap which
we try to continue lower off of we don't
create a new order flow lag going lower
then afterwards we do create a new
bullish order flow lag right there and
this bullish order flow lag is then what
we can continue higher off of after that
we create again a new bullish order la
which will be created in about 2 hours
that is what we again can continue high
off of then towards these highs then
right here on ndaq we see the following
that we have this orderflow lag going
higher right there every lag every
orderflow lag which has a fair value Gap
in it has a higher probability of
holding that is why this works because
those fair value gaps they tell you the
intention they are the footprint of the
bigger will in the market they are going
to tell you it's going to continue
higher and that is told through those
fair value gaps they can't hide the
orders which is why it's called order
flow and you see every low of the lag
that has a fair value Gap in it right
there is not getting taken out until we
reach this orderflow lag right there and
that might be an indication that
orderflow is then again switching with
this bearish order flow lag right there
so again for your own sake start doing
case studies and you will get to the
same conclusion what I'm telling you
right here the following case study
study orderflow lags on The Daily time
frame and see how they tell you the
intention of price see how they tell you
the direction that price wants to move
in everything I do in the mmt is based
off of order flow so it's an extremely
important concept to understand all
right perfect thank you
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