Streamline your sales order flow for HighTech with airSlate SignNow

How to create outlook signature

hey everybody it's Mike from immortalflows and welcome to today's video today is uh Tuesday January 24th 2023 and it's kind of quiet day in the markets and you know I was looking through some of the comments this morning um yesterday's videos and what I there was a question on there which you know this is sort of the the whole point of today's video is um you know how can markets rise on aggressive selling right because technically under aggressive selling shouldn't the market be selling off and you know that's what I'm going to address today so again you know just really briefly if you enjoy my videos be sure to subscribe to the channel and you know if you find you get some value be sure to like the videos so I'm going to be showing you the example in U.S bonds right 30-year bonds we're using a four range chart here because you know I like to use range-based charts on bonds because you know they tend to be quite slow moving at times and you know if you're using a minute based chart it's going to be a little bit difficult to understand what's happening in the order flow since there's not a lot of uh price movement in certain times of the day right and you know when you're looking at order flow you also want to take into account the movement of the market right just not seeing a big order hitting the market and on trying to understand its effect on the market you're looking at sort of the cumulative effect of the orders coming into the market all right so today in the bonds there's a perfect example right that's that's why when I was I saw the questions and I was watching the bonds today I thought you know hey this would make a great uh a great example in the video so you can see the bonds moving up right we hit our low today 129.16 you know just before nine o'clock and then we started putting in this rally all the way up to the high of the day and on this move up we're seeing aggressive selling that's taking place right well how do I know it's aggressive selling well on the surface the most easiest way to tell is by looking at the Delta right the Delta is the net difference between the aggressive buyers and aggressive sellers in the bar basically the volume that's traded on the bid the volume that's traded on the offer now on most footprint charts I mean like my footprint chart that I use regularly I have just a Delta Max Delta Min Delta cumulative Delta Delta volume and the bar's volume you could actually you know a lot of the software's out there I know mine offers it is you can actually see what the actual volume was that traded on the bid and the actual volume traded on the offer so I'm just going to throw that up here so you know it just gives us an idea of what's taking place here so I'll just give it a second here so I'll just add it go into the summary content add the ask volume add the mid volume okay so ask is volume is going to be the first line bid volume is going to be the second third one is the Delta so as you can see here right on the low the Delta is 701 it's a positive Delta right so that volume traded on the offer is 25.53 the volume traded on the bid was 1852. that difference is 701 it's a positive number because more volume traded on the offer meaning that 25 53 2553 contracts traded on the offer that were aggressively bought versus 1852 sold into the bids there in this bar and the net difference 701 it's a positive difference because there's more volume traded on the offer is telling me there's more aggressive buyers Market moved up that's what you expect to see right then the next bar positive Delta of 51. and this time is a little bit closer right the volume traded on the ask was 1591 the volume traded on the bid was 1540 so 1 591 contracts traded on the offer side in this bar versus 1540 was traded on the bid side meaning there was 1540 contracts sold into the bids versus 1591 contracts bought at the offer okay so what you're measuring is the aggressiveness in the bar right the aggressive buying you know people crossing the bid offer line people that were either working bids that went up and bought the offer or people that just came in and bought at the market that is the volume on the ask the volume on the bid is people that were probably working an offer and sold into the bid they got tired of waiting and sold it into the bid they crossed the bid offer line or people that are just coming in and hitting the bid immediately okay so the next bar also a green candle okay so we got green candle positive Delta green candle positive Delta now all of a sudden we've got green candle negative Delta minus 95. what's going on right you have negative Delta so you have more aggressive sellers selling into the bid then buying the offer yet the market is still going up what gives well let's go over the math again so what you have is 18 38 1838 contracts bought on the offer 1933 contracts sold into the bid okay giving you a difference of minus 95 there was 95 more contracts sold into the bid then bought from the offer right giving you this negative Delta now you know granted 95 it's not a huge amount it's you know it's 95 contracts it could be a difference of one or two trades you know this this bar could have just you know late buying could have come in I mean there could have been some decent selling early late buying came in you know when I see relatively small Delta is like 51.95 I kind of treat it as neutral but right now it's negative negative 95 and what is going on well let's look at the volumes right you can see at 26 there was 729 contracts traded when it was bid there versus 581 when it was offered at 25 there's 501 traded on the bid versus 434 when it was offered at 24 it was 649 traded on the when it was bid there versus 254 when it was offered so what you're starting to see is some signs of support bidders coming into the market that are starting to absorb that aggressive selling that's coming into the market and this is how markets go up on aggressive selling because even though you have the aggressive selling you got to still realize what's meeting it well passive buying is meeting it it's passive buying is it's stepping up to absorb that aggressive selling that's why the market is not going down is because you have bidders in here passive buyers that are happy to be buying it at these levels right the selling is coming in because remember right markets don't go up because there's more buyers than sellers markets don't go down because there's more sellers and buyers for every buyer there's a seller in the market but when you start thinking about passive buyers and passive sellers in addition to just the aggressive buyers and aggressive sellers that's the difference that order flow is going to give you in your analysis as opposed to just regular following price because now you're adding into it that element of volume that's traded on the bid the element of volume traded on the offer and you know whether it's strong or not then the next bar another green candle okay and you got positive Delta okay that's what you expect to see right you know we had that one bar with the negative Delta here but green green Green right positive Delta positive Delta positive Delta the one bar with negative Delta okay but look what you have in this bar you have a selling imbalance 1774. okay so when you're looking at imbalances you're looking at the imbalance in the two-way auction when it was 28 bit at 29 1774 traded on the bid versus only 320 on the offer that is a selling imbalance more than four to one I use a ratio of four to one you determine my imbalance is traded in this two-way auction just as here one tick below when it was 27.28 you had 347 only traded on the bid at 27 versus I'll show you at 20 this is 27 versus 1884 trading on the offer at 28. so you have a buying imbalance here then you have a selling imbalance here so what is actually taking place okay so while the markets 7 8 you know it's trading eights trading eights and then it turns eight bid so not only did it you had that aggressive buying taking place at eight here at 28. once it turned 8 bid there was a strong bid coming into the market basically absorbing whatever selling there was now at 28 before there was a there was passive sellers at 28 now you have strong passive buyers at 28 that are sitting here absorbing all that selling that's coming down now this bar still had the positive Delta because there was still more volume being traded on the offers at the different price levels in this bar but let's take a look at the next bar another green candle got a strong negative Delta minus 274. and it's trading higher okay so in this move you've had one from the bartholo one two three four five bars two of them have negative Delta okay let's take a look at the volumes well here volume traded on the offer at the ask is 3258 volume that was traded into the bid the aggressive selling into the passive buyers was 3532 giving you a difference of minus 274 so you actually had more aggressive selling in this bar you had minus 274 274 more aggressive sellers than aggressive buyers in the bar yet the bar went up okay well why did it do that well why why did the bar go up meaning you had the aggressive sellers there when it was at 130 even okay there was 23.94 contracts traded on the bid but you had a lot of selling coming into that bid right when it was even bid at 01 everyone is selling it thinking I can't go any higher you know this this line here is is the opening price you know which is you know it is a level for for a lot of Traders the opening price you know hanging around basically unchanged you know they're happy to sell it because you know for whatever reason you know maybe they're thinking well you know we have just our normal distribution day this is probably right around you know where the value was I haven't pulled up a value a volume profile but it's probably where the POC was for the day so you have a lot of aggressive selling coming in there but you have strong buyers you got more people bidding than aggressively buying then once those aggressive sellers had you know once their bullets ran out and they got no more contracts to sell then the market starts ticking higher that's what causes it to go up it's not going up because you have aggressive sellers it can't you get more aggressive selling so once that aggressive selling stops that then the market starts going up right and you see it's going up it's not a heck of a lot of volume um you know 72 contracts you know you got the 37 then the next bar is the doji bar opens it closes you know basically at the same level but still a nice negative Delta minus 400 it's actually one of these candles where it traded down and then closed up again okay but again minus 424 Delta the volume that was bought on the offer was just 2283 2283 versus the volume sold into the bid of 2707. okay and again you know this bar so you know the bar it was starting to sell off it was looking like a nice big red bar but what happened once those aggressive sellers ran out of bullets you don't that's selling pressures removed from the market the market ticks back up in this case you don't really have you know a the selling and balance like you had here the 1774 against 320 or the 23 94 against 288 um here it's kind of evenly distributed for the most part the only areas that sort of out is um you know this 923 this is just a shade more on the bid side than the offer side but it's you know spread out over four levels then the next bar another green candle positive Delta okay you know sort of what you expect so here you've had one two three four five six seven bars of which one two three have had negative Deltas now you're on the eighth bar negative Delta minus 180. volume bot aggressively volume traded on the offer at the ask 1344 volume sold into the bid 1524 giving you a negative Delta of minus 180 but you still have a green candle well why you got 843 here at 10 traded on the bid versus 299 on the offer right that was enough volume coming in here to absorb whatever aggressive selling was taking place to arrest this move from dropping lower in this bar now again remember these are range bars these are not minute based charts okay so it's based on price movement then the next bargain another doji bar open and closed at the same level positive Delta 549 okay now we're still going up next Bar Green candle big negative Delta minus 309 got that imbalance 10 29 1029 against 41 this imbalance is coming in at 13. okay you're starting to see the pattern here right what's happening here is you got a strong bidder to absorb whatever aggressive selling so this Market went up obviously there was aggressive buying right that's what's going to move you know removing the next offer and the next offer and the next offer is what causes it the market to go up but what stops it from going down is the support of buying the passive bidders coming in for size you know the 729 the 500 the 649 the 1774 the 2300 the 1000 the 900 you know the 600 the 800 the 1061 the 1029 that's why this Market is not selling off you do have aggressive selling but it's being absorbed by strong passive buyers and then we went up to new highs okay but it was pretty evident I mean you're not going to see it down here or here it's a little vague at this point you start seeing it grow a bit more here even though you got the positive Delta you know the the clue is one is obviously this negative Delta but again it's kind of small it's not you know it's not minus 450 it's just minus 95. this should get your interest up and then by the time you get to this bar you know so it's a decent move I mean I'm not saying yeah you would have bought it down here no you wouldn't because you still got the positive deltas but when you start seeing this folding you can see the bitters just coming into the market it's clear as day look at this volume trading right here on this side 729 51 649 1774 2300 900 1000 this is your clue this is I think the area where a lot of people sort of click with them that hey you know what this Market's got that support of buying that we need to absorb whatever aggressive selling is coming in and then we had this nice March up and it happened pretty quick right it happened this bars 924 up until 9 56. so about 30 minutes went from 130.01 all the way up to 21. and you're still getting that support of mine coming in here here even here as you're making the new highs and I mean look at this move from we got one two three four five six seven eight nine ten eleven twelve bars from low to the high how many bars with negative Delta one two three four five six half of the bars you don't see any red bars in here on this move up so it's a nice beautiful move up without any pullbacks but you still see that negative Delta you still see that aggressive selling so even though you have that aggressive selling I mean every bar is going to have aggressive selling there wasn't there would just be all zeros here but what you have is absorption right you have people that are bidding the market to absorb whatever aggressive selling is taking place as the market is moving up that's what you like to see on a move now in some markets it's going to be difficult to see you know if if you're trading a thin thinly traded Market you know where it's a lot of zeros or one twos and threes it's not as clear takes a you know a little bit more experience to to understand what you're looking at but you know on markets that trade a lot of volume obviously bonds tends it's it's clearer to see that's why I use the bonds as an example so I hope you guys understand it now um I forgot the username that brought up the question but you know that's how the market can go up on aggressive selling even though it's not going up necessarily on the aggressive selling is going up on the passive buying that is absorbing the aggressive selling the aggressive selling is there right there's always aggressive buying and aggressive selling in every bar but when you generally when you talk about aggressive selling taking place you think the market is going down here you have aggressive selling taking place that's been absorbed by the strong passive buyers right the people that are working bids passive sellers would be people working offers okay so in this case it's going up because people are just catching whatever selling is taking place because you know their view of the market is markets going up all right guys I'll end it there so hope you enjoyed this video be sure to subscribe to the channel and hit the like button if you got some value out of it and keep those comments coming bye bye