Trading Order Flow: Understanding & Profiting From Market Generated Information As It Occurs

My name is Michael Valtos and since 1994 I have been trading for banks
(JP Morgan and Commerzbank) as well commodity trading houses
(Cargill and EDF Man) and for myself. While trading for the investment
banks I learned how to get information out of the market and how to
trade off that information into a profitable position; when there is an
opportunity to earn a significant return relative to risk you get into a
position. While trading at commodity trading houses I learned to think
how commercial end-users think; you are always in a position just by
being in that business whether or not you chose to hedge a position in
the futures market. While trading for myself I learned to take low risk
high return trades; I do not try and capture every random move in the
market. What I look for is what I like to call “Stress Free Trades” which to
me are low risk entries that have high profit potential. I have enough
stress in my life I don’t want trading to add to it.
Order flow analysis is a visual representation of market price movements
constructed by recording the volume traded on the bid and the offer as
opposed to just looking solely at price. The value in order flow analysis is
in instantly confirming market tops and bottoms when they form,
determining where changes in supply and demand have occurred and
providing insight into market psychology and market conditions.