Unfinished Business
Identify Price Target Opportunities
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Unfinished Business is an add-in for selected trading platforms and available on a monthly subscription. You can also select to license it as part of emoji trading Order Flow Suite of 14 indicators.
Identify Price Target Opportunities
If you have no plan to exit, how can you plan to enter?
Many new, unsuccessful or inconsistent traders will enter a new position based upon their magic lagging price-based indicator’s red or green arrow and set arbitrary take profit targets and stop loss levels in total ignorance of where supply and demand reside. “With my TP20 & SL10, I can have twice as many losing trades and still break even!”
They lose money and continue doing the same thing. Order flow analysis allows us to take a more considered approach and plan likely exit and entry levels. For any trade, if we have not formed a plan of where we will consider exiting, then we have no justification to enter a trade let alone a view of the risk:reward ratio.
Using order flow to identify an unfinished auction – also known as unfinished business – can provide us with well-defined target price levels. To understand why, read on….
Imagine you are at an auction of classic Ferraris. A particular car has a price estimate of $350,000. Bidding starts at $200,000 with much interest in the room and rises in increments of $10,000 until there is only a single bidder left. The hammer falls and the car is sold at $380,000. This is no different to how markets auction up and down. Price moves up until there are no buyers prepared to pay the offer price. Price moves down until no sellers are willing to accept the bid price.
The Ferrari auction is in progress and the auctioneer is looking for bids at $280,000. Four bidders are interested when suddenly someone shouts ‘this car is stolen!‘. The bidders put down their bidding paddles and the auction stops until proof of ownership can be demonstrated. We have an… unfinished auction! An event happened in our market causing buying interest to disappear yet we had not established the price at which the final buyer was prepared to buy. After a few other completed sales, the auctioneer displays proof of ownership to the room. The auction restarts at $250,000 and the car sells for $380,000. At $280,000 we know that we had not found the last buyer as the car had not sold and there were four interested buyers. By extension, there was a price beyond $280,000 that would establish the last buyer and completion of the auction.
Unfinished Business allows us to visualize and track these price levels that have not established the presence of the last buyer or seller. They can form excellent intra-day targets, for example, Unfinished Business at the Initial Balance high or low price can present us with the opportunity for an ‘inside out’ trade if we know the likelihood of our particular contract’s frequency of breaking the Initial Balance. Unfinished Business at the session or daily high or low can provide opportunities to both trade back to this level and be alert to finding the last buyer or seller and trading back into value.
emoji trading’s Advanced Lookback Analysis allows you to filter unfinished business opportunities using price and time filters that are independent of the chart you are looking at to highlight opportunities only at swing, session, daily or time window highs and lows. Our powerful implementation also identifies whether the unfinished auction was caused by Absorption pushing price back. This can act as a guide to quickly trade away from the price level. Using our Ferrari auction example above, this is analogous to the discovery of another 10 identical cars for sale as extra lots added to the sale catalogue. There is now more supply (1 + 10 cars) than the 4 buyers that existed when the bidding level was $280,000.
The indicator provides flexible EmojiZone visualization modes so that the level is highlighted as a potential target opportunity. You can even track how the level reacts when it re-trades. The existence and state of unfinished business levels are also made available programatically to your trading platform to enable alerts and automated trading from the unfinished business condition.
Unique Advanced Features
Supported Trading Platforms
Unfinished Business is available for:
- NinjaTrader 8 – Free, Lease & Lifetime licenses are all supported. Windows 10 is required
- Sierra Chart – fully compatible with Standard & Advanced Packages
