A smashed window and a stolen cellphone. The crime itself wasn’t all that extraordinary or ingenious. Yet the methods used by police to track down the suspect was pulled straight from a James Bond movie.
It involved one of the government’s most powerful surveillance tools – capable of intercepting data from hundreds of people’s cellphones at a time. Known as a StingRay – perpetrators are literally tracked down right to the exact spot they are standing – leaving little room to hide.
When tracking down market swings, you can dust for fingerprints hours later – or you can nab an entry red-handed. Doing so requires triangulating price using a powerful set of market surveillance tools: Order Flow Sequence Tracking and True Value.
Price swings that show up after it’s all too late
Many times the suspects have no idea what’s even hit them – or how the police were able to find them so quickly. Such was the case when police showed up to nab the suspects behind the Baltimore smash and grab. This is because the equipment is unknown to most of the public and the manufacturer is basically a ghost on the internet.
Although the circumstances are very different, the sensation of being caught completely off-guard is a familiar one for many retail traders – especially when a market swing ensues. In this case, the perpetrators of the swings are the institutional traders who drive 95% of the market’s volume.
The swings creep up and then are missed altogether – mostly due to the fact that retail traders are using lagging price-based indicators. These indicators largely do nothing to factor the aggressive activity that incites a swing, and many times ignore the value zones that the market is responding to.
Aggressive moves and value. Two blind spots any trader can’t afford to have if they’re going to make a consistent profit or even a full-time income.
Triangulating price before it has a chance to run
The StingRay works by mimicking a cellphone tower and getting the phone in question to connect to it. Once that happens, it’s all over. As long as the phone is powered on – it will send measuring signals to the authorities as they ‘ping’ their way to the suspect.
You can triangulate price using Order Flow Sequence Tracking and True Value. Using the two in tandem, you can monitor the aggressive moves that are being made by the institutions. This dynamic intelligence can be ‘pinged’ against a value zone to reveal entry and exit zones that you’ll want to monitor.
Using the ES example here, you can see these two incredible market views overlaid. Starting with Order Flow Sequence Tracking – you can see the exact activity that’s unfolding within each candle. This allows you to see exactly who’s coming out on top between buyers or sellers at any given moment. Compare this with True Value – and you can see whether you’re really in a market extreme. Specifically, you can see if the buyers are taking over in Value Area High – overbought, expensive conditions – ready for a sell; or Value Area Low – oversold, cheap conditions – prime for a buy.
Finally, it tells you if you’re smack dab in the middle of the value zone – which is the price the institutions prefer to maintain.
Between the real-time Order Flow Sequence Tracking and Value Zones – you have a lot of what you’ll need to qualify high probability entries.
Using multiple views to nab profitable extremes
Defendants have demanded to see the data that the StingRay collects – without much luck. It seems law enforcement wipes the data logs clean in an attempt to keep the inner workings of the technology a secret. And so the debate about surveillance and privacy rights continues…
Not the case with Order Flow Sequence Tracking and True Value – the opportunities are in plain sight as long as you know what to look for. Starting with Order Flow Sequence Tracking – you’re simply looking for your fundamental reversal criteria. This includes Sequential Decline at the top or bottom of a candle, Responsive Activity from the other side, and the position of the COT (Commitment of Trader).
Once these conditions unfold, verify where you’re at relative to your intermediate value zone – supplied by True Value. In our same ES example, a sell opportunity unfolds at the top of Value Area High.
In this case all of the conditions you’d look for come into play. The buyers back off at the top of the bar with Sequential Decline and Responsive Activity. Furthermore the COT is at the top of Value Area High.
Setting aside a macro trading level – like volume rejection or institutional trading levels – you have verification you’re in overbought conditions with True Value.
What your price-based indicator can’t teach or show you
It’s not the first time that law enforcement has used cellphone data to determine the whereabouts of a suspect. It is however the first time that they’ve been able to pin their whereabouts to a 2-foot radius, versus a zone that could cover miles with a cell tower.
Likewise, many would argue that they have a trusty indicator that will tell them when a price reversal is about to take place. These rarely (if ever) will reveal the institutional activity that’s driving any price swing – like Order Flow Sequence Tracking does. More importantly, it’s not the tool that reveals the swing – it’s the practice of evaluating or ‘pining’ price relative to value that tells you if buyers or sellers have really had enough. While many retail traders simply guess as to whether they’re in a pricing extreme – True Value will tell you. Order Flow Sequence Tracking will confirm it by revealing the real-time positioning of aggressive buy and sell activity.
Don’t wait on a green or red arrow that will let you down more often than it succeeds. Actively evaluate swings and enter with the prevailing sides at real extremes!
Sting swings for profits before they get away!
According to a recent USA Today article, these devices are often used in secret. The suspect is completely unaware that they’re being tracked and giving away their exact location to authorities. A recent review of instances where the StingRay is used also revealed that the prosecutors are many times left out of the loop.
Despite the hopes of most institutional traders driving the market – you don’t have to be caught flat-footed when a swing ensues. Track price with your own ‘stingray’ as it’s headed for a reversal with both Order Flow Sequence Tracking and True Value.
When price enters a value extreme, hang tight until you see sequential decline and/or responsive activity. This will be your clue that you’re both in an extreme condition (overbought or oversold) and the tide is turning. Make your move on the ensuing bar when acceleration takes place with stacked imbalances.
Triangulate entries and exits right alongside institutional traders, collaring big profits in the process!
Noft Traders offers a Funded Trader Program. To learn more, visit their informational page at NOFT-Traders.com.