You might be surprised to learn that I did not learn to trade on charts. In a Proprietary Shop (prop shop) you are taught to trade using DOM-like indicators that show, in real time, how orders are flowing into the market. For sure, you have an exact view of whether the market is being dominated by buying or selling. You can clearly see support and resistance by observing where resting orders are stacking up. Further, as you learn price behavior around these areas of support and resistance you can tell, with a good deal of accuracy, whether the price is going to stop at support and resistance or continue through.

What a fantastic advantage order flow gives e-mini traders!

Of course, if you add charts to order flow analysis you have a distinct advantage over of the oscillator/indicator traders.

Why?

No matter what the oscillator or indicator may be, there is always going to be a certain level of lag and to how the oscillator/indicator reports. This lag can be the difference between a highly successful trade and a trade that is marginally successful. With the order flow analysis, it is easy to see when traders begin to abandon the direction of price action and begin to accumulate contracts in the opposite direction. Oddly enough, very few e-mini traders utilize this form of analysis; and I don't know why. For many, I suspect that order flow analysis is simply not taught in the trading curriculum they have chosen. As a trader who spent a career trading at the institutional level, I depend upon order flow to make trading decisions. Without order flow analysis, my ability to trade successfully is greatly reduced.

Moving average (MA) traders are at an even greater disadvantage, as moving averages are the laggards of chart reading. In my estimation, moving averages generally place traders in a trade 2-4 bars late. I put great emphasis in my trading on timely entry, and cannot afford to insert a trade late, let alone 2 - 4 bars late. A late entry makes it very difficult to hit your profit targets, which I generally base upon the Average True Range.

As of late, there have been a number of very effective order entry analysis tools on the market. Yet, I very seldom see these indicators on a retail e-mini trading chart. I will often question a trader why he or she ignores order entry. Most traders indicate that they are unaware of how order entry works or consider the programs too expensive. I often ask the same individuals; if you had to pay $500 a year for a trading tool that will make you $10,000 a year, would it not be wise to invest in that indicator?

Yet, order entry at the retail level is still generally ignored.

I can assure you at the institutional level order entry is not being ignored, and is an integral part of every workstation. I want to know, in real time, whether the order entry is positive or negative. This information keeps me out of many false breakouts or breakdowns or market feints in one direction or another.

In its simplest form, order entry is the study of the flow of orders; both buy and sell, occurring in real-time. What information could be more important to your trading? I can think of none.

In summary, I encourage you to investigate the current offerings of order flow analysis. Most of these programs have a free trial and I encourage you to take the free trial and see the difference in your trading. As I mentioned earlier, I cannot imagine trading without order entry analysis.