If you had the misfortune of going into battle with a Nambu Type 94, making a run for it may have been the wiser choice. Widely regarded as one of the world’s worst service handguns, it contained a series of deadly design flaws.
Among the least of notorious 94’s issues: being unreliable, ridiculously inaccurate and difficult to operate.
The static rules and setups used by most traders when executing trend or counter-trend trades contain similar flaws. A surefire way to fix this can be found in using real-time order flow data that puts you in a position to qualify your trades.
Static Rules & Setups = Blind Misfire Trades
The Type 94’s worst flaw was an exposed trigger bar along its left side. If accidentally pressed with a round in the chamber — the gun would discharge.
Simple rules many traders use, like only fading the first breakout or using small stops to limit risk, are like using accidental discharges to generate consistent profits.
For example, take a swing high in any given market. Your move is simple: trade or fade? For crude, many believe that you always trade the breakout. If this were the S&P, others might say you should fade because it consistently reverts.
In reality, your trade really is just a guess unless you can qualify your theory by seeing exactly what institutional traders are doing at that moment.
Order Flow Sequence: Going into battle with fully loaded candles
To make matters worse, our poor Type 94 only held 6 bullets — and the ammunition was known for being strangely underpowered.
In a battlefield filled with institutional investors, using a six-shooter equivalent with static rules and setups won’t do you much good.
Order Flow Sequence Intelligence gives you a fully loaded candle, automatically reloading each second with real-time data.
Looking closer at our hypothetical, we see that the swing challenged the high and then reverted. Good or bad, depending on your static guess.
With Order Flow Sequence Intelligence you would have watched in real time as:
1. Buyers come in and push with the activity in the light green.
2. Sellers absorb the buyers with the trades in the red boxes.
3. Sellers start trading over the buyers, eventually taking over.
Would you rather qualify your move using this intelligence, or take a blind shot?
Responsive vs. Static: The difference between early or dead
As if there weren’t enough problems — the slide on the 94 was difficult to operate in moist conditions. Bad news if you’re operating in the jungles of southeast Asia.
Like a jammed slide — static rules and setups don’t reflect the changing landscape of the market. The position you’ve assumed, likely 6-10 ticks late, could already be compromised with many common setups.
This is why you’re getting inconsistent results, even when using previously successful approaches to seemingly identical market situations.
With Order Flow Sequence Intelligence your trading strategy is qualified early — based on what’s taking place before you. This allows you to get in before the market move fully materializes.
With the above chart, note how clearly the score is kept between the institutional buyers and the sellers as the swing reaches its peak. You know who is going to prevail, your entry is qualified and you’re rolling with the winners.
This was happening right in the middle of your static setup, unseen without a dynamic tool like Order Flow Sequence Intelligence.
Consistent profits require analysis, not arrows and setups
Taking on the highly-trained institutional traders isn’t simply a matter of watching to see if numbers turn red or green. Don’t fall for this common indicator trap. It’s a developed discipline of understanding the behavior and the demand that’s driving the aggressive trading.
With our swing example — sure, you may have gotten in early when the buyers were pushed back. But it was the one-sided nature of the seller route that ensured where you made your real money.
It was the stopped-out buyers and the demand shift that the institutional traders selling at that moment seized. Those who could see and discern this got their pockets lined.
And let’s be honest. Without being able to see the lack of grit in the buyer’s response would you have chickened out when you saw the comeback?
Stem the tide, turn your simple setups into wins
Despite its known flaws, the Type 94 managed to get worse and more dangerous as the war progressed. This was likely due to a scarcity in skilled craftsmen and materials.
There are plenty of traders willing to use the Type 94s of supposedly proven rules and setups. Ignoring their notorious track record, they step on the battlefield completely unaware of what’s taking place. The result only worsens their position and trading history.
Don’t be one of them. See institutional fortifications as they’re prepared, and enter early using the fully loaded candle of Order Flow Sequence Intelligence. Avoid the trap of simply looking for signals, and analyze the behavior that’s driving aggressive activity.
Stem the tide and turn your static setups into consistent profit — now, before it’s too late!
Noft Traders offers a Funded Trader Program. To learn more, visit their informational page at NOFT-Traders.com.