Is Trading Right For You?
***Rant Alert***
I will be honest and upfront, order flow trading is not for everyone. Trading is not for everyone. You can’t just buy an indicator and think that you are going to start printing money the next trading session. I see it all too often… I release a new indicator and I get some traders buying it thinking it will turn them into the next Paul Tudor Jones. Then a few hours later the emails start “oh this indicator is terrible it had x losers in a row” or simply “it doesn’t work”. When I message them asking what markets they are looking at and what time frames they are trading very rarely do I get a reply which shows me their lack of ambition as a trader.
News alert, not every trade you take will be a winner. If you come into trading thinking you can master the markets and every trade you make or nearly all will be a winner you will be sorely brought back to reality. You will experience losing streaks, sometimes you will question yourself if trading is really for you. You will run into days where everything you do seems to be wrong. You zig when you should zag. You will think if only you took trades doing the opposite of what you did then you would be rolling in the dough.
That is the reality of trading, there is no sure thing in the markets. There are times when the market sets itself up perfectly for you and you think “this is it, this is the trade” you take it and the market never goes in your favour. It just directly to your stop and you take a loss. If you can’t accept losing then don’t trade. You don’t know when a big trader is going to start trading opposite of you.
You could get a great signal to buy, a set up that has worked 99% of the time, and you get long. You don’t know if there is a sales trader at UBS that just got an order to sell 2000 ES over the next five minutes and starts trading it 5 seconds after you get long and you get stopped out and then the market does what you expected it to do after that 2000 lot order is filled and goes up to your profit target, but you were stopped out instead. It happens. Its unfortunate, but it happens, and you perfect trade fails. That is trading.
But don’t let that discourage you. Keep your feet on the ground, don’t let your guard down, because if you do that is when you will get punched in the face by the market.
Order flow analysis is a tool. It is not a holy grail and if you think it is you will be sorely mistaken. Trading is like any other profession it takes time to learn and understand what you are doing. Even if you get a job at McDonalds flipping burgers someone still needs to teach you what to do. Trading is the same way.
If you already have a method of trading and are making money, more power to you. Congratulations. If you are struggling with your trading and are looking for a way to make sense of the market then you should open your eyes to order flow analysis.
Order flow analysis will help you understand what is happening in the market. Will it pick every swing high or swing low? No it won’t but what it will do is alert you to areas where there is something happening in the market that is signalling a potential swing high or low as it is happening.
Not everyone is destined for trading greatness, just as not every high school basketball player ends up playing in the NBA. The odds are against you. Sure you can open a trading account and start trading but there are no guarantees in trading, the best thing you can do is get a solid trading education and learn to trade from someone with experience.
Recently I posted this video on YouTube about trading. I recorded it last year but never posted it until now because it is brutally honest in my opinion about trading and there is a line in there that will put off some people. Basically I say “If you are not serious about your trading, don’t come to me.” The more I think about it, the more it rings true. I don’t want to sound like a prick, but as a trader you have to make a commitment to me that you will take the time to learn and put in the effort, don’t think that once you buy an indicator that all your trading problems will be solved.
Anyway here is the video:
Enjoy and happy trading!
Mike
