Flow

[Trader Question]

Perhaps we said it and I just need to get use to it that is - i.e. - OK were at the Daily EB -( or some other P&L tool)- is the mkt exhibiting support or resistance at this point - if support then BUY - if resistance then SELL.

D.M.

[pldot]

===yes, that is closer... but you have to have a reason on the htp why to do this, and then of course never buy resistance and not sell support, etc... You have to understand what the market wants to do, and then look for evidence that it is doing it. Such evidence is "making progress towards its goal." and when you can see it then you know what to do.

[Trader Question]

it is a bit nebulous - its like I have it in my hand yet it keeps slipping out and I have to go back and look at the charts to get a grip on it. I don't know if I'm being clear in what I'm trying to say

Its just not real clear cut to me yet

D.M.

[pldot]

==not very, yet.

==Nope, and so you need to understand flow better, and targets. Merge these with termination and dot push on various timeframes and you've got it.

[DG12]

I am still having hard time grasping flow. Could you give me a conditional statement for why the red bars(down flow) change to green bars (up flow) and vice versa ? ie.( if the bar close is > than the nearbys and if ...)

[ted]

Flow is calculated using five elements: position of the close relative to the high and the low, the range of the bar, degree of directionality, a measure of "progress" through the envelope matrix, and the bar relative to the prior bar.

These are all encompassed in the phrase "progress towards a goal" and that remains the best definition of flow for the human (as opposed to the machine) observer. When looking at the market if you can see good evidence of direction then you have good flow; if not, then you have poor flow.