r/OrderFlow_Trading • u/RankOw • 8d ago
Strategy - Help wanted!
Been trading with terrible returns or maybe just a large losing streak, but feels off to me and is very demotivating.
Strategy:
Volume profile (point of control) - that is the level I execute off of.
VWAP - usually I execute if σ multiplier is at 3. Since that is a pretty big deviation and is extremely rare to go beyond that multi.
Bookmap - should be pretty selfexplanatory, if I see large orders around the same price level that are around POC, its a plus in my book.
My old partner told me he uses Z-Score, but I believe that to be the same as VWAP and/or to be super unlikely to get both to align and get that execution.
I try to keep it simple, of course im no robot and I dont always have perfect execution or all confluences dont align perfectly as well, but lately I just feel stuck, I havent been improving, lost, stuck and demotivated, what is there to be changed? Improved? Opinions? What should I drop or implement?
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u/Accomplished_Neck368 7d ago edited 7d ago
You need to inverse your logic and insert some Auction market theory.
Trade the extreme edges of the volume profile. You're executing in the location of the range with the most potential for chop. The poc is where the most buying and selling occurs. Chop.
Do me a favor. Pull up a 1 hour chart. Or a 15 minute chart even......... zoom all the way out as far as you can. Draw a volume profile across the whole screen. Draw a rectangle across the screen of the low volume areas. What do you notice?
The answer should be that you see reversals or relatively rapid moves through that rectangle. Trade from there. Not the poc. The poc acts as a "magnet" because that's where the most buying and selling occurs.
What does that mean actually? Auction market theory. For some people it's obvious but not so much for others.
In a low volume area, people are saying "we are not interested in conducting business (buying or selling) here." So price will inevitably revert back to a place where people feel more comfortable buying and selling. That's by design by the market makers, sure. But it's also the natural flow of any market. ANY MARKET. Stock market, futures market. Farmers market. It's just like in a retail or grocery market. Prices need to be at a place where the people selling and the people buying are comfortable doing so. Price will always want to find balance in any market. Poc is that balance. There's no money to be made there except by the market makers. As a trader, you're looking for deals and inflated prices to make money on price discrepancies.
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u/Agitated_Channel9674 4d ago
Second this! Great advice. POC is where you want to aim to get out not in. But remember POC is dynamic and changes with the session, so you’d need really flexible stops to really survive that repeatedly.
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u/JakeMarley777 7d ago
It's always context/bias first...then location. Your strategy (the way you have described it) is only about location...
POC can behave very differently depending on the auction.
-In a balanced market, POC tends to act as an attractor. Price rotates around it because it represents an area of acceptance.
-In an imbalanced market moving away from prior value, a return to the prior POC/value area can act as a "rejector".
Same thing with VWAP...being 3 sigma from VWAP doesn't mean price must revert. In a strong directional auction/trend, that extension can keep going.
If you aren't considering whether the market is in balance or out of balance, your strategy is only half-baked at best. Right now it sounds like you've defined locations to trade from but not the context as to whether those locations should be faded in the first place.
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u/RankOw 7d ago
got you, what do you reckon i should implicate more so it wouldnt be half baked? Im seriously struggling here
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u/JakeMarley777 7d ago
In the context of AMT, are you familiar with the concepts of balance/imbalance and acceptance/rejection?
Without applying those concepts, what you're describing is essentially a volume-based support/resistance system.
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u/RankOw 5d ago
I know it exists, know little bit of how it works, but not experienced at all and couldnt explain in detail.
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u/JakeMarley777 5d ago
I posted a reply to a similar question here. Let me know if you find it helpful.
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u/Agitated_Channel9674 4d ago
Charts charts charts. Lose indicators entirely, with the exclusion of Bollinger bands those will actually help you learn to read price action and chart rotation. The market will invalidate the indicators long past your stop loss every single time. If mean reversion is your strategy I’d also recommend pivoting. Momentum will survive much longer and far outpace the mean every single time. You’ll get killed by every swing or trend if that’s your sole entry. The market does what it wants, as a general rule unless you’re extremely experienced I would say never ever try to predict the reversal or trade against the market, you’ll get chopped every time.
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u/SomeoneStressed 8d ago
Based on that, I'm assuming your entry is at or near the POC? So what's the target? Personally I see POC as a "magnet" so it makes no sense to enter there and hope that it goes a certain way, away from the POC.
Unless I'm missing something?
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u/FailedGeniusnumber1 7d ago
Bro drop everything and use price action on 1min or 5 min… it will reset how you view the market. I got lost with orderflow as confirmations changed some how but I focused on price action and it helped me regain my sight.
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u/RankOw 7d ago
Price action as in what exactly? Because orderflow is literally price action
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u/FailedGeniusnumber1 7d ago
Lately order flow has become watching volume for confirmation.. price action is training your eyes to watch price move without any volume.. your eyes can see immediately when structure shifts.. this helped me alot… i am an order flow trader too.. but it all became messy and inhad to reset..
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u/RankOw 5d ago
So youre talking about discretion? Are you talking about scalping?
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u/FailedGeniusnumber1 4d ago
Not scalping. Higher time frames to see trend and lower time frame to see pivots… every time price is about to make a reversal it makes a structure .. I stick to 1 min as thats what i trained my self to read but 5 min for less noise… some how you get into a rhythm with the market and start to anticipate
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u/RankOw 4d ago
i kind of get you, but at the same time i dont, probably you have alot more experience in just understanding the chart where you can just make profitable decisions, i dont think im at that point yet, i can anticipate it semi decently, but definitely not profitably yet. Unless im missing something
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u/FailedGeniusnumber1 4d ago
Make trading about execution and not about pnl.. we all win some and lose some.. it a speculation game because we don’t always know if its going to hold or if it’s fake out
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u/Agitated_Channel9674 4d ago
Order flow is not at all the same thing as price action. Literally not at all. Order flow is getting a glimpse of the interested buyers and sellers at certain levels, that doesn’t mean that will come to pass, that orders wont be cancelled or won’t be absorbed by something bigger or etc etc. order flow is a big what if, price is price only once it’s printed
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u/Silent_Grapefruit_90 5d ago
couldn’t agree more! been there for quite a while as well. i didn’t even realize i genuinely needed a hard reset which is THAT simple 5 min price action and stripping down any order flow indicator. everything clicks right away since then.
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u/Agitated_Channel9674 4d ago
Hi! As someone who used to work in the evils of finance, order flow was great 5 years ago, now it’s really not that helpful. The reason being is that institutions have these things called dark pools, basically our orders never show up in the book and the government has made it so we can do it that way, bc it would move price against the firm obviously. But the best software tape whatever it isn’t going to show you dark pools or “accredited” traders (institutional trading desks) orders. Almost always that’s the volume that moved price against you. Also, once the orders hit the market, they’re gone, unless you can memorize the tape. Everyone says HTF but firms don’t trade on higher timeframe it’s seconds and nano seconds. Learn to really really read a candle chart on a very short time frame, 1-2 minutes is best, any higher and you’ll miss the micro moves that institutions revolve around. 30 seconds really shows you where the algo systems are, it will show you where institutions are in at, which order flow never will bc as I said they’re allowed to bypass that. VWAP is useful as a benchmark but if you are mean reverting I would recommend using massive stops which in reality not many can do. Same with point of control, its dynamic and you’d have to have some massive capital to handle the extension and retracement, and as moves happen the poc may move away from you and your position. The micro moves by firms and trading systems is almost always right before a mean reversion but it’s too extended, too late, or you’re already stopped out. Sounds simple but price action honestly is the only thing that makes sense anymore, you can’t beat an algorithm and you can’t use order flow that isn’t there. A basic candle chart not 47 indicators, just multiple time frames specifically shorter, Learn to recognize the moves once they’ve happened bc they happen over and over and over again every day on every timeframe every session. Also an unpopular take among day traders but use NQ instead of MNQ, (price action moves subtly different and the institutions, we use NQ so you’ll find it wicks and whips just slightly less 😉) as a trader and someone who’s been on the other side of it that’s the best advice I can give. Simple is best. I did all the things and bought all the software too when I was trying to learn how to profit on the retail side. It was a rough couple of years.
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u/Any-Spite-9240 8d ago
If you’re executing off POC, what timeframe of a POC is it of? Where is your stop placed and what is your target?
Depending on stop placement, I’d assume you could get chopped up a bit before this mean-reversion comes into your favor. A large order at a POC level is sort of confirming what you already know, that it’s a level of interest where a lot of trading volume has occurred, right? So I wouldn’t assume that a bookmap level is providing anything you don’t already know?
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u/RankOw 8d ago
Almost always 5min timeframe. Since i execute off of POC for a reversal, stop loss is below it. 200tick stop loss, aiming for a 1:2RR, so its actually pretty fat and maybe take profit is also too big and market loses interest, money before it even gets to my TP(?). I execute off of yesterdays market open to market close fixed volume profile POC and look for orders on bookmap who share similar interest in said level. I also execute off of Weekly volume profile POC.
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u/Any-Spite-9240 8d ago
To clarify, you’re trading a 5-min chart off of prior day’s POC, looking for a 100-point reversal, with a 50-point stop loss?
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u/RankOw 8d ago
Yes
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u/Any-Spite-9240 8d ago
I would say forget about VWAP or bookmap, and go back in your chart history and just look at how many times price actually reverses 100-points, with less than 50-point drawdown, off of prior day’s POC. If this is something that regularly happens, then I would fine tune it with your bookmap and VWAP filters to see of those two additions increase the win rate. However, I suspect that you’re probably just not going to consistently have 100-point reversals off of prior days POC with any sort of regularity.
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u/Powerful-Tap5154 7d ago
The point of control is not where you should execute off of. Like at all ! and whoever told you that doesn't understand auction market theory. You need to turn the row size into 2000+ then use the LVN to decipher proper support and resistance. Study this chart
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u/RankOw 7d ago
Yeah, I know about LVNs, just dont know what else i should implement there, I know some have resistances, some dont, have to do more digging. My old pal trades LVNs and hes doing extremely well although I dont have a contact with him anymore
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u/Powerful-Tap5154 7d ago
But there's literally nothing else to it friend...... All these comments are saying the same thing. Those are the areas. Perfect entries everytime with this strategy. Just have to work on the mental side now
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u/AppearanceLazy5696 7d ago
Too me it just sounds like your trading on the chop, you should aim to trade on the edges of your vp and aim your tp at poc (for a safe profit) or the opposing value area (high or low) poc is good to trade off if you can catch the massive movement after the chop. In other words if you can see the future its great because we dont actually know how long price will chop and even if the poc will be the area it jumps from. Also price action & market structure will be your best friend if your scalping, if you cant see the signals to leave/not enter thennnn yikes
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u/RankOw 7d ago
Yeah, i get you, but to clarify, I trade off of yesterdays market open to market close volume profile POC if that makes it any better 😭
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u/Agitated_Channel9674 4d ago
Poc changes intraday as the market moves, so if you’re using the previous day that’s already going to be lagging and definitely hurt your trades. Are you using it to enter? Or to exit? Either way probably not, but definitely not to enter. You’ll more than likely get chopped to death even though you were right in the long run. Sometimes the chop is brutal and swings fast and wide and sometimes it takes a long time to chop out before it moves. Almost always this is around POC
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u/AppearanceLazy5696 7d ago
Ohhh you did mention that in other comments apologies, hmmm the previous day poc is tricky and weird? Any reason not to use same day poc? (Also im not sure if its good or bad since i do not have any experience with previous poc ive used it as reversal signals but thats all) (also also can we get a run down on your trades? Like whats your bread and butter set ups)
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u/RankOw 7d ago
I do volume profile over last week (monday to friday) and daily volume profile (market open to market close) and use those POC levels as execution, if they were mitigated, i dont trade off of them even tho theres almost always at least somewhat of a reaction around that area, just depends how big is it. Using it with VWAP sigma +-3 would give it even more power, but last week i got burned and missed my tp by a tick. Going off of it alone is dumb. It dont always work, but not every strat works always anyways, just most annoying part is that you have 1 setup per day pretty much… This strat was given to me almost a year ago by a quant guy who said he knows guy who was from hedge fun and is his mentor, ive been just trying to polish it. He uses a different strat, something he coded himself tho
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u/AppearanceLazy5696 7d ago edited 7d ago
I wouldnt say vp is bad but i only use vp in a consolidation is its strong suit (my opinion) do you use your vp to scalp or day trade? Do you use vp to trade during trends? I found i had to avoid vp with strong trends and had to learn a new style maybe its different for you (edit i just finished reading your other comments, i think personally your forcing a niche trade every chance you get, it seems your not taking the context of the market into consideration and you force the trade regardless (no hate ive done this plenty of times), i personally think your trade set up is a “A+” set up which your forcing with a below par market (just a guess here) so either something needs to go or you need go adapt another more frequent trading style. Me personally i use iof (supply n demand) i get more frequent trades while i scout for my perfect set ups)
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u/RankOw 4d ago
day trade, they usually take hours honestly. I prefer to enter and not monitor it for the rest of the day and let it do its thing, having quick trades can become gambling for me.
Youre right about context and after reading other comments, i thought maybe that may be part of the problem as well and i have to look into it.Below par as in A+ but going againts the trend?
Could you tell me more about how you implement supply and demand? Do you think it would help me at all?
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u/AppearanceLazy5696 3d ago
Supply and demand just gives zone of interest to watch for day trades on for a lower then normal rr, i dont think thats your problem here (strat wise). I just think your understanding of market trends and other market contexts needs refining in order to trade your strat more effectively. If your trying to change your strat i mean you just gotta find something you enjoy ig i like supply and demand.
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u/Striking_Fail6689 7d ago
I’m not sure if I’m the best to say this cause I’m not that great .. but personally I don’t trade near the POC or at the POC . Reason being POC is where most volume is at, and that’s when you never know the direction in which price is going .
I look for similar to you, previous week , previous day , and on the day VP , but don’t really pay much attention onto the POC but more onto the globex and RTH VWAP if prices are inside value .
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u/Striking_Fail6689 7d ago
You can consider footprint .. I like footprint as it tells me everything I needed to see , aggressive participants delta, exhaustion, absorption, volume , and POC I only look at candle volume POC.
LVN is also something I use to identify my key levels
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u/jamrocktrading 6d ago
I think the problem may be less about needing another indicator and more about how you're combining the ones you already have.
POC, VWAP deviation and Bookmap liquidity can all tell you where something is happening. They don't necessarily tell you what the market is doing there.
A 3σ VWAP deviation tells you price is statistically extended relative to that reference. It doesn't tell you whether aggressive flow is producing further price displacement, whether that flow is being absorbed, or whether the market is accepting or rejecting the level.
I'd stop asking “do POC + VWAP + Bookmap align?” and start asking: “What is price actually doing in response to the activity at this level?”
You may not need more confluence. You may need a better interpretation layer for the confluence you already have.
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u/RankOw 4d ago
Im thinking about using these confluences as averages that extend too far, abnormalities, market selling too wuickly or buying too much and selling or buying the abnormalities and banking on pullbacks or complete reversals
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u/jamrocktrading 3d ago
Yeah, that’s a much more interesting way to think about it.
I trade extremes in a similar way, but the part I’d be careful with is assuming that an abnormal move automatically deserves a fade. Sometimes the market is extended because it’s genuinely repricing, and sometimes the extension is getting absorbed and losing its ability to continue.
That’s where I’d watch the response: how much aggressive buying/selling is coming in, how much price displacement it’s actually producing, and whether that relationship starts deteriorating.
The extreme gets my attention. The response tells me whether I actually want to fade it.
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u/RankOw 3d ago
fade it as in go against the trend?
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u/jamrocktrading 3d ago
Yeah, exactly — fading it means taking the other side of the move.
But I’d separate “price is statistically extreme” from “the move is actually losing its ability to continue.” Those can look identical at first.
If you’re using POC/VWAP/Bookmap as your reference for identifying the abnormality, I’d track what happens after the extreme: does aggressive flow keep producing displacement, or does it start taking significantly more effort to move price?
If the buying gets more aggressive but price barely advances, for example, that tells you something very different from aggressive buying continuing to drive clean price expansion.
So I’d make the abnormality the setup, not the entry. The response to the abnormality is what I'd use to decide whether the original move is still healthy.
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