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Perfecting A Technical Entry Based On Order Flow

Dax Poor Value Area Reversal 20 February 2018

A poor value area occurs when a market cannot establish any price that it is ‘happy’ to trade at, this results in a profile that has no clear highest volume price (VPOC) and no normal distribution of volume that would ordinarily look like a normal bell curve.

The consequence of a poor value area (VA) is that the next day the market is likely to trade within it until a volume is distributed more evenly thus ‘repairing’ the poor VA; this means that short term reactionary trades can be taken at the extremes of value looking for a reversal back to a previous level.

In this live Axia daily debrief we look at the Dax and a reversal trade from the poor VA – being a thinner market Dax is less likely to stop at a single price so a second technical reference gives a range of prices to attempt the reversal from (in this case a 10 tick range) this is where order flow helps perfect your entry as you can’t be sure exactly where it is going to stop. Both the order flow into and away form the level can both provide a trade opportunity giving options on your entry price as discussed in the debrief.

 

 

Alternative reversal strategies based on order flow are considered in depth in Module 11 of the Axia Futures ​Price Ladder course where multiple drills give you opportunity to trade them and perfect these skills.

If you are looking to develop a career as a trader within a professional and successful environment, then the Axia Futures 8-week Intensive Trader ​Training is the most comprehensive in the industry based​ ​upon​ ​skill​ ​development​ ​within​ ​the​ ​proprietary​ ​futures​ ​trading​ ​environment.

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