15 July, 2016

Unfinished Business

Rationale & Trading Techniques

The volume traded at the bid and the ask at the extreme of a bar provides strong insight to supply and demand at this price level. As mentioned with the Single Print at Extreme indicator, at the end of a move, we would expect to see low volume as the market has run out of buyers or sellers at this price level. If we find that there is volume traded at the bid and the ask at the extreme of a bar, i.e. at this price there are both buyers and sellers, we refer to this situation as Unfinished Business – we have a price where both buyers and sellers wish to trade. It is likely therefore that this price will be revisited and the market will explore higher or lower until such point as we run out of buyers or sellers.

The Unfinished Business price level allows us to determine a near-term price target once price has moved away from the price level as well as look for possible entries at prices beyond the Unfinished Business price level in the knowledge that beyond this price level, we will at some point run out of buyers or sellers.

Unfinished Business at significant price levels during the day, e.g. Daily High/Low, Initial Balance High/Low allow us to consider trades with defined price targets and therefore favourable risk/reward ratios. A user-definable lookback period allows for filtering of Unfinished Business conditions within swing highs and lows.

In addition to highlighting the Unfinished Business price within the bar, you can select to draw an Extension Line which will remain in place until price trades at the Unfinished Business price.


Examples

In this example, note how the new low at 11:31:06 combined with negative Delta gave a strong indication that price would explore lower. The next bar (11:31:50) made a new low with Unfinished Business implying that even though we had positive Delta in this bar, we would see 2260.00 trade again which it indeed did at 11:37:56. Note the POC of the 11:34:49 bar is at the bar’s extreme – this would be highlighted by the POC at Extreme indicator. A trader relying on technical analysis would likely trade a double bottom pattern formed between 2260.00 and 2263.25. A trader using the emoji trading Order Flow suite would be aware of the market’s behaviour at the day’s low and could potentially profit from selling the move down from around 2262.50 to retest the low and get ahead of the potential double bottom breakout by going long after seeing that the Unfinished Business price at 2260.00 traded and held.

Order flow allows us to trade with incredibly tight stops and plan trades based upon the market’s reaction to traded volume and be well ahead of traders relying on chart patterns and lagging price-based indicators.

Unfinished Business - Emoji Trading Order Flow Suite

Unfinished Business Settings

Input Name Description
Lookback Period If set to a value greater than 0, Unfinished Business within the current  bar will not be displayed unless the current bar’s high (or low) is greater than (or less than) or equal to the highest high (or lowest low) within the lookback period.
Extend Until Future Intersection? Select whether Extension Lines are enabled/disabled for the Unfinished Business price level.
Extension Line Label Text indicator for the Extension Lines.

Indicator Subgraphs

ID Subgraph Description
SG1 Unfinished Business Price The price level at which the Unfinished Business condition is present.
SG2 Unfinished Business Drawing Top  Use in conjunction with SG3 to highlight the Unfinished Business price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs
SG3 Unfinished Business Drawing Top  Use in conjunction with SG2 to highlight the Unfinished Business price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs