Today I will reveal some of the order flow patterns that I use in my daily futures scalping strategies. This is not something you will find easily on the Internet or in books, it’s some exclusive content for trading-revealed.com and as such I hope it will help you to read the markets and kill the market makers!
The following examples are taken from an ES emini futures (sp500) 1 minute chart. But it can be applicable to all others futures charts. These are very recent examples, I will add the date for each example to show you it’s real (you should see the same stuff on your chart).
1. Multiple bottom with selling pressure absorbed
Date : 2021.03.29 17h20 (UTC+2)
Notes : interesting example of a quadruple bottom. You can see the selling pressure in cumulative volume delta indicator because it is decreasing and the red bars are bigger than the green bars. Despite this pressure, price couldn’t go down because we had buyers absorbing everyting. This is a nice buying signal.
2. Sellers absorption at a price level
Date : 2021.03.26 17h09 (UTC+2)
Notes : another sellers absorption example, not at a low this time but after a first move up. Price retraced to 3920 level with some big selling activity that we can see in the cumulative volume delta. But sellers are absorbed and price couldn’t close below 3920. It was a buying signal again.
3. Double bottom with big sellers at first leg only
Date : 2021.03.29 18h23 (UTC+2)
Notes : Here we have a double bottom (also called a W pattern) where we can see a big selling bar at first leg. And then all following cumulative volume delta activity is very small: there was no more sellers. It was a nice buying signal confirmed when we saw the first big green candle at 18h29.
4. Stop hunt low and sellers absorption
Date : 2021.03.30 14h50 (UTC+2)
Notes : another sellers absorption variation here because we had a big selling activity to push the price below the previous lows (most likely a stop hunt low). And then the price couldn’t go lower, all sellers have been absorbed and cumulative volume delta was rising. This is a short term buy signal.
5. W pattern with high selling pressure
Date : 2021.03.29 19h31 (UTC+2)
Notes : here we have a quite small but nice W pattern. Why?
Because the cumulative volume delta activity during this W pattern is very interesting. You have some big sellers at both leg and the most interesting is that the selling at second leg couldn’t push the price lower. This was an opportunity for a buy scalp.
I have to admit this trade would have been closed quickly because we had a sell signal 3 minutes later (stop hunt high with cumulative volume delta divergence).
6. Buyers absorption at CVD level
Date : 2021.03.29 15h53 (UTC+2)
Notes : let’s see a Sell signal this time. After a big push up, we saw that price came back down while some buyers were still there in Cumulative volume delta. They tried to break the indicator level 3 times but they couldn’t do it, that was a sell signal.
7. M pattern with no buyers at 2nd leg
Date : 2021.03.26 15h45 (UTC+2)
Notes : in this example, we have a M pattern (double top if you prefer) but look at the cumulative volume delta while the price was making the second leg: there was some big sellers in there. This was an easy sell signal because the selling volume there is very impressive and there was really no buyers to push the price higher.
8. Double top with big sellers at 1st leg only
Date : 2021.03.29 19h14 (UTC+2)
Notes : this is another double top pattern example with no buyers at second leg. It is very similar to the previous example, and it happens over and over again.
There are others patterns that you can use with the cumulative volume delta, these are a few examples only.
I hope it will help you to understand how to find some nice entries by looking at the relation between the price and the cumulative volume delta. Don’t hesitate to comment if you have any question.