Deal Yourself In With Value Areas and Order Flow Sequence Tracking

For $50,000 you can buy into an exclusive game in the VIP room at the Viper. You’ll find yourself seated with Tobey Maguire, Ben Affleck and Leonardo DiCaprio… for starters.

The stakes are high, the company is rarified and they’re always looking for fresh meat to fleece.

Like institutional investors, they’re not interested in hanging out or being friends. They’ve come for your money. How you fork it over is entirely up to you.

Establishing value high, value low, and POC (Point of Control) is like sizing up the room and spotting the easy money. Understanding volume allows you to size up the pot. Order Flow Sequence Tracking Intelligence literally tips each hand as it’s dealt.

Using value areas to confirm the market’s tells

Imagine getting an advance dossier on each heavy hitter at the table, telling you exactly what they’re going to do and when.

Value areas essentially do this. They tell you where the institutions are most likely to start buying up or selling off their multi-million dollar positions.

There are three basic components to establish and monitor:
1. Value Area High (VAH): Levels at which volume and demand has driven price up, making it expensive from an institutional perspective.
2. Value Area Low (VAL): Instances where supply has overtaken, driving price down, making it cheap from an institutional point of view.
3. Point of Control (POC): The prevailing price that volume is currently supporting.

Each of these may ebb and flow throughout the day — but like any established player, the general profile for institutional behavior will hold.

Establishing these areas as part of your pre-trade homework will provide a foundational map that eliminates a lot of second-guessing.

Preparing to read your charts for suckers

Few people know what to do with a tell once they spot one across the table.

It takes preparation and discipline to fully exploit the ‘tells’ provided with value areas. In the case of futures trading, this starts at the beginning of each day before you begin tracking your first trade.

The Static Volume Profile provided by NOFT gives you an immediate at-a-glance view of value levels in relation to volume profile. Analyzing this from a 5-day perspective will reveal areas of confluence which represent opportunities to trade.

In this case, you’re looking for areas of overlap between prior VAH’s and POC, and/or prior VAL’s and POC. For example, take a look at our ES chart to the right. You’ll find:
1. Daily Volume Profile over the course of 5 trading days
2. VAH (green), VAL (red), and POC (brown)
3. Areas of confluence where these preliminary homework levels converge

Attempting to read this on the fly could mean letting opportunities, or big pots, pass you by. Worse yet, if you rely on your lagging indicator, based on price, you’ll miss the tell and get suckered with a late trade.

Take advantage of these ready-made entries, presented to you by the tells of the market at the start of each day.

Layering in composite volume to flesh out the bluffs

The great gamblers use reverse tells, intentionally sending signals designed to disorient amateurs and draw them into traps. This sets them up for the big bluff and they don’t even know it.

Volume is the market’s purest tell that never lies and can’t bluff. It always precedes price and serves as a direct reflection of the prevailing sentiment.

Low volume is a good indication that price is being rejected and a shift may be imminent. Since prior rejection can be an indicator of future rejection – add to your value areas by marking low volume periods, or nodes (LVN).

This will bring additional depth to your pre-trade homework. It will also serve as another element of confirmation when targeting a potential entry.

This can simply be done by marking low volume nodes on a 240-minute 35-day ES, using the Volume Composite from NOFT. See the additional confirmation this brings to our previously marked areas of confluence.

Note that while volume nodes will shift over the course of time, they’ll mostly stay in the same area, requiring minimal / slight adjustments. Even better, they’ll carry over to your other ES charts.

In the minutes it takes to establish along with your value areas, you’ve just set yourself up to spot great trades.

Eliminate your blind bets with Order Flow Sequence Tracking

Lagging indicators will claim to convey value areas via all types of methods. They all have one fatal flaw in common: they’re price-based, flying blind.

Their spotty results are probably why profitable traders no longer trust trade opportunities presented in a supposed ‘trigger zone’. And you’re right. They’ve failed you in the past and they’ll continue to fail you — because they’re late and ignore volume.

Order Flow Sequence Tracking Intelligence removes the guesswork.

As price heads in any direction, you are able to see the institutional volume that’s driving it — in real time. When it approaches your pre-targeted zones, you will have confirmation whether the buying or selling volume will support the entry.

All of this delivered to you in real time, right within the candlestick as it happens. Your lagging indicator can’t come close to the intelligence this provides. The institutional ‘Matt Damon’ traders are praying you don’t pay attention.

The advance work that you’ve put in with establishing value areas and confluence with volume dips can now pay off.

Prepare to play and profit with the ringers

Allegedly, World Series of Poker champ Jamie Gold nearly lost his entire bankroll at Viper in this game. Either he lost a step, or someone saw something he didn’t.

Institutional investors are always looking for easy money — and it’s out there in the form of 10 million retail investors.

Start your trading day by sizing up the table. Establish the value zones and plot their relationship with volume. Locating dips in volume, where price rejection is likely, will serve as valuable reference points. When these points converge with VAH or VAL levels, your opportunity to enter has presented itself.

Sidestepping this homework could position you as the sucker at the table before you make your first trade. On the other hand, putting this work in can turn you from a break-even trader into a profitable rounder.

Order Flow Sequence Tracking Intelligence allows you to see each card as it’s dealt — providing real-time insight as to when to exit or fold.

Play with the institutions and win.

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