Multiple Indicator Example: ZB

14 July 2016 – ZB 30 Year Bond

 

In this example of trading setups supported by multiple indicators within the emoji trading Order Flow Suite, we examine ZB’s first hour’s trading on 14 July 2016. The contract established an Initial Balance range of 26 ticks between 172’22 and 173’16. On most days, the Initial Balance range will be broken and with the emoji trading Order Flow Suite we can look for indications of whether we can expect a break to the upside or downside. There was no Unfinished Business at either the Initial Balance High or Low but the 08:17:37 price bar reversed a retracement from the Initial Balance Low with the maximum traded volume, i.e. the Point of Control, at the bar’s upper extreme. We also see Trapped Traders at the top of the bar and a low Ratio Display indicating strong supply.

In the next price bar at 08:20:44 Delta turned negative and an Unfinished Business condition arose at the Initial Balance Low giving a strong indication of a move further down.

An aggressive trader may well have entered a short position during the formation of the 08:20:44 bar in the 172’22-172-26 range with a hard stop at 173’00. A more conservative trader would have sold at 172’22 or better with a hard stop at 172’27.

The market then moved further down:

 

The 08:29:12 price bar demonstrates a high Ratio Display indicating a lack of continued selling supply. The most conservative trader would have exited at 172’21 or 172’22 for a scratch or 1 tick profit. A more aggressive trader could certainly have realized a quick minimum 4-5 tick profit between the 08:20:44 and 08:29:12 price bars. With experience using the emoji trading Order Flow Suite the trader starts to recognise entry potential and exit opportunities prior to confirmation bar closure without increasing entry risk and achieving even more favourable risk:reward ratios.