Day Trading with Order Flow

Ex-Prop trader shares prop firm strategies

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Why do you like the U.S. treasuries? They seem slow in comparison to other markets.

September 13, 2015 By

The short answer is that I simply think they are easier to read than most other markets. I also think the Bund, Bobl and Eurostoxx are good markets as well and most people don’t know this but corn can be a very good trade. However, the commissions are high in the grain markets and that means less of an edge to retail traders. Fast markets are not always good markets to trade but the treasuries are not always slow. There are days when they rock and roll and the daily range is very wide. In general, they do tend to be slower than, for example, the equity markets but thicker markets are often easier to read. The treasuries and the Eurex markets are cheaper to trade than the equity markets. Bonus one. Bonus two is that I often make trades in the treasuries which do not even go one tick against me. This can happen in the ES but not nearly as frequently. I like knowing I have size behind me when I’m right and being fairly sure that if the market does blow right through me, I’m probably on the wrong side and can exit or possibly even reverse with confidence. It’s very much about risk to reward and what kind of a read there is to be had. Some people do not mind risking 6 to make 9 in the ES. They will hear no argument from me if it works for them. I do take trades in the ES at times and demonstrate them in my course material. I just think the treasuries are a better trade overall. Some previous webinar attendees have taken my concepts and implemented them into their own strategies for trading oil (and showed me the trades). I do not trade oil nor advise it to new traders but these attendees convincingly demonstrated how the order flow in CL can sometimes tip them off to a future move. It all depends on what suits you. Once you begin to understand the fundamental driving forces and you get a grip on why the markets do what they do, you will understand how you can apply the methodology to whatever market you want to trade.

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