JaySignal combined with the Sym Renko bar type can show this imbalance using the following simple technique.
Most traders think we can’t truly quantify supply and demand. I argue that we can quantify supply and demand by looking at a renko price bar chart and know the exact renko bar on a closing basis where an order imbalance can take place thus giving us the edge in the markets to give us the best reward to risk per trade.
In fact, I believe that the price charts represent all buyers and sellers. To quantify supply and demand on a price chart one must know the inflection point where an imbalance is likely to happen on a daily basis. This is what I call the “edge” over trading opponents. The stronger the move in price away from a price level of support/resistance, the more out of balance supply and demand is at the level. This to me creates the imbalance that we need as traders to stay out of the chop phase and position ourselves into the direction of the imbalance of orders. If the market wants to mark the market down then I want to be short, If the market want to mark the market up then I want to be long. It is as simple as that or what I like to call the “Order Flow Bar”. This exact bar qualifies my setup that a possible imbalance of orders will drive price in the direction of the imbalance.
The Jaysignal is comprised of 3 important components. 1. Market Profile 2. Fibonacci Retracement Dots 3. Elliott Wave Patterns. Once these three phases all agree then it is time for the order flow bar. The order flow is much like market delta and is used to confirm that the setup after the automated arrow has fired that an imbalance of orders are going to occur or not going to occur. Meaning do we have a high probability setup or do we have a higher chance of a stop out. This edge is very important because not all setups will have order flow bar entries. In other words, the order flow bar allows the trader to cherry pick only the setups that have the high probability of an imbalance in the direction of the arrow. If an imbalance does not occur then the trader can sit and wait for the next setups thus reducing his or hers risk level.
It is as simple as waiting for an automated arrow on all markets with JaySignal and then waiting for a partial candle close of the 2nd bar after the arrow that closes below the low or above the high of that arrow. Don’t make it any more difficult than that. The 2nd bar after the arrow tells the trader that yes/no the setup has order flow backing the short or long. If it does not then a lower probability trade is possibly occurring and the trade can be avoided or a small loss or profit can be taken. Traders that have been using this technique find that price reacts almost immediately in the direction of the signal thus creating high probability first target moves due to order flow. If waiting for the arrow and just entering off the order flow bar, traders can adjust stops to the high or low of the arrow bar or the previous bar before that on a closing basis. This gives the trader the ultimate edge with getting in on an order flow bar with small risk thus creating the edge daily. Remember, the order flow bar is great confirmation that the market is creating an imbalance of buyers vs sellers and this is exactly what we want.
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