What traders must know about supply and demand · John Grady

EP 148: The order book-what traders must know about supply and demand w/ John Grady
John Grady is an independent futures trader from Florida, who primarily trades Treasury bonds. His trading is purely discretionary, based upon his read of order flow. Essentially, he’s a scalper.
Throughout this episode we go over; the basics, the value of the order book, some of John's trading methods, order types and managing positions, how to build skill at reading order flow, as well as, the impact of HFT and what's commonly known as spoofing.

[@ChatWithTradersPodcast]

Full show notes for this episode, available here: chatwithtraders.com/148

[@jasonjohnson6216]

This was the best quality trading video ever

[@InJunoWeTrust]

Halfway in and I can already tell this is a top ten cwt podcast. Great insight john

[@ControlTheGuh]

Whats your top ten?

[@anindividual9225]

I think that about almost every one of them lol

[@1x0x]

@@anindividual9225 nah johns an OG

[@danman2070]

Excellent podcast. Great questions. One of your top interviews!

[@MissBardoJeep]

This podcast is such quality...thank you!!

[@410nikko6]

Just wanted to say thanks for this show Aaron ...it has helped tremendously..🔥👍👃

[@fosterchild4523]

Great questions Aaron. You were asking the questions that I was thinking. Thanks.

[@christdivers]

Excellent Interview Mr. Fifield

[@vinniebrown7296]

This was amazing. Thanks a lot Aaron.

[@jeremy1253]

lots of useful information. great interview.

[@GodIsPureLove]

This one was amazing. I used orderflow but never thought about volume

[@akshaydalvi2317]

So far the best interview in this podcast. Very Insightful. As the name goes No BS.

[@gavinmillershow]

Amazing interview! thank you!

[@remiewatkins8032]

Thanks Aaron i appreciate the awesome learning

[@WintrWolf]

This podcast got VERY GOOD when Arron begin asking John about the entry and stop loss. Lot's of the things John talked about I felt that I've also seen and experienced like I knew about those events. But the problems I am still losing money, well maybe that's not the real problem (losing money), the real problem is probably I don't know what I don't know.

[@bluewave2024]

How Wendy's drive thru?

[@astrogumbo]

anything change friend? because i feel like you in 2024

[@WintrWolf]

@@astrogumbo Nope, back to working full time, had my fun during covid. love your profile pick btw.

[@fredsanford1437]

Thanks for these podcasts Aaron! This is a legendary collection of knowledge!

[@walksoflifeph]

Im so focused on the chart that i forget the executed trades. Learned a lot! Thanks!

[@tradingpoker1324]

Excellent video. Thank you both

[@machotoejam]

You’re a great interviewer Aaron. Thanks!!

[@flippantfishtaco3132]

for real man, Aaron always asks great questions.

[@ctaggett1234]

Honestly this channel is the best thing going for traders. I’m about 50 shows in and how gotten something from everyone

[@Reotha]

Tony Stark i lost count lol

[@andym5663]

Real great interview

[@WestKentStudio]

Great episode

[@JD-5250]

Was studying his youtube vid and about an hour into it I put on this podcast not knowing it was the same guy lol. Great information here. Thx a lot!!

[@dezzihotep3768]

Just what I was looking for !!!!!!!!!!

[@corndog984]

YES YES YES YES YES YES YES YES YES THANK U FOR THIS

[@motojc]

Excellent chat. I would not have understood much of it a few months ago. Recently I’ve been trading 4am opens. The low vol and slow pace really gave me the opp to study how supply and demand interact with price

[@uhvoidme6321]

Hey man. You shouldnt be studying low volume charts. Volume is what moves and shows the true price action. Low volume charts arent good to study. Any great trader (not me) would say the same thats all i know. Look for volume stocks in the millions or the very least 400k + Hope that helps.

[@ztee100]

Thanks

[@Muskiehunter4841]

great info.

[@caiobam1163]

Great interview, that’s I’m looking for . Thanks !

[@hamisintunzwenimana8083]

Good Technical 1. Fundamentals: Order Flow / Book / Level 2 2. General advice

[@sri4sg3]

super interview, only a experienced trader can get this.

[@bangkokskater]

great questions, gj

[@markettechniques]

I trade in a similar fashion including HTF with pairing of the trading lower timeframes using fresh supply and demand being read through the candle stick breakouts. It's possible in forex. I'm amazed this guy has spelled out the ethos behind my trading methodology on the trading the lower timeframes, the fact that swing has a lot of information entering the market that can affect positions and if there not a very high probability it will cause thc chain reaction and change your swing position idea quite quickly. I dont trade stocks but this guys ethos in the short term is 100% profitable way to think as I use it myself from experience. Listen to the fundamental ideas of how the market works in probabilities. Key thing is working out what scenario your in on the lower timeframes compared to the higher timeframes. Very good interview got a lot of confirmation from this. Thanks

[@budijohnson405]

Wait how do you get market depths for forex? Also what's an htf?

[@PotatoGunCamper]

You can't really trade like an HTF using Forex. Why? you don't have real market depth, with many brokers you don't have 'real' limit orders, you cannot really provide liquidity, you can't bypass the spread because the broker gets paid off of the spread. So, it is NOT real HFT market making but perhaps some other type of high frequency scalping. I ended up in futures and trading the DOM/Price ladder because of this-- Back in my Forex days I tried to trade like this on the quoteboard!!! I didn't know enough then that it wasn't really possible.

[@jerrydigdigan9035]

Very useful info about order flow. My only gripe with it is his stance on swing trading. He claims hes never met a successful swing trader and yet theres a lot of successful swing traders that Aaron has interviewed. I don't doubt hes found success scalping but I feel hes wrong for just completely discounting the possibility of success that swing traders can attain. As a matter of fact, there are some traders that Aaron has interviewed that have found far more success swing trading in comparison to day trading or scapling. His order flow insight is great, but hes close-minded with his views on where people can find success by using different trading styles.

[@InJunoWeTrust]

Felt the same. The interview is 10/10 but when I got to the swing comment part, I was caught off guard by his opinion behind it. He made it seem like it was unprofitable strategy. Personally, I believe swing trading is much more beginner friendly and traders evolve (or devolve) into scalpers.

[@rashad1saifullah]

Agreed his example wasn't swing trading

[@nicholassutcliffe8134]

Theres this weird perceptual blindness that specialists can have..... like Anton Kriels traders who think its impossible to trade any timeframe intraday ! claim its just noise (you can tell the guy really belives it! amazing. Like th flat earth society i guess!) kzbin.info/www/bejne/bqHOeYiofaene9E

[@davidwidlak2097]

@@nicholassutcliffe8134 true, Anton is super close minded. After all these years of trading I've learned there are an infinite ways to trade profitably (and more ways unprofitably). But the main point John is saying is that technical analysis isn't reliable

[@SuperDeathgate]

How can I watch the order book? If I can only see 10 or 15 lines and it's moving at warp speed. Grant that I'm trading in crypto not stocks. With crypto the orders are flying by so fast that you can't even read one number before it's replaced by 10 more. What say ye.

[@manubhadoria24]

Thanks for the amazing podcast. Around 1:11:00 What does hitting a big order as its leaving means?

[@sommi888]

He means... Imagine a price bid 10, offer 11 The price @ 10, has an order of 10,000-lot The price @ 11, has an order of 5,000-lot If you see the bid @ 10... drop from 10,000 down to 7,000 down to 2,000... you are witnessing a large amount of "market hitting orders". If you can hit with that, down into the bid (aka you Sell into it), you have a high probability trade. You are 'going with' an order attack of ~8,000 lots immediately, and soon enough it will down to 1,000-lot then 0-lot and eventually Offer for you. This is what HFT's do all day. Its impossible to do now because humans cant react to microseconds (whereas HFTS/algos do this)

[@manubhadoria24]

sommi wow, great explanation! Thanks. Do you trade based on order flow? What instruments?

[@sommi888]

-- I've been in the game for 7 years... I trade Futures, mostly spreads (Bond spreads, Energy spreads, some currency). I did give Order Flow trading an honest go... I bought John's education courses end of 2016 (NoBs Day Trading). I learned the game of order flow reading inside-out. One issue is the hours & scaling issue along with volatility of returns. Because I'm in Australia, to trade the U.S. Tnotes I have to only participate from 11pm-3am... with Daylight Saving it becomes 12:30am to 4am almost. Also, you can't transfer your skillset from Treasuries to Oil/Gold/other markets without learning them individually yourself. If I could recommend something else, it's to look at Axia Futures videos... some of them are okay. You'll need to learn Market Profile to trade the Bund for example as thats what most traders use on it. If you can do it, I strongly recommend order flow trading though. And most important to keep system costs low (only use Jigsaw trader). My system costs are $6,000/month and rising because of all the information I need to use to have an edge in Futures/spreads. Of course, if you made it this far to the end of my post, it's best I tell you that Order Flow reading is actually best done in either Equities (shares trading) or Crypto Currencies. Algorithms/HFT's don't have their fuckwit fingers in them and aren't "cheating" as heavy as they will be in the next 10-years.... clock is ticking...

[@ifoundthistoday]

thx for your explanation what would you use to visualize order flow for crypto?

[@manubhadoria24]

Sorry for a very late reply. I like to write comments on a computer and I saw your comment notification on my mobile and almost forgot about it. I had a location problem too being in Singapore. I understand what you are saying regarding skillset transfer from one market to another. I was recruited into a prop trading firm straight out of college. In the firm, I was given a platform called stellar and product I traded was corn futures. Could clearly see a lot of things in OF just by staring at it. I got too excited with all that I saw. My firm gave me jack shit for education. Sometimes, traders in the firm were spoofing orders in markets that same firm traders were trading in. I got out of the firm in a month's time due to my own mental state and also because of what that place was. Then I joined a data analytics firm in logistics sector. But I kept coming back to trading since I knew what I saw was the RED PILL of the markets. Jigsaw is the best one in my research too. I will make it to the end of any OF related post always haha I have researched a bit on HFT as I have some coding background and its understanding has expanded my OF learning. Looking at a particular market's OF for some time started giving me a feel of it. Cryptos are great for OF trading. But more and more clever players are entering it and RIGGING the OF. Just a few months back, you could look at OF of a small market cap coin like EOS or any other small coin on bitfinex and have 10x more accurate predictions than in markets like commodities. If majority of trading volume of the coin was on just 1 exchange then that was gold. I with my small account influenced the prices of small cap coins. Now, that has changed. OF of all major cryptos is far more erratic now.

[@flippantfishtaco3132]

What is an up-tick/down-tick split?

[@IRAKAZ]

In my opinion the best way to eliminate spoofing is chargin fees to canceled orders with a certin rules like : distance to the actual price, ration between canceled orders and filled orders (for example). If the exchanges want to do it, they can do, but it seems that they are confortable with that ...

[@eyeservantez]

Who would they blame for flash crashes if they eliminated it?

[@Augie-]

They won’t ever do that. ECNs make money on every order, so those NIF orders are beneficial for them in multiple ways. Spoofing is technically illegal, but it’s really hard to prove. Poor fuck NAV got scapegoated but other than that it’s almost unheard of

[@georgemcduffey2622]

It's funny how a lot of traders with a "targeted" expertise think the others are fools. I've listened to my share of the podcast; Part of its beauty is the inclusion of many styles: Volume Profiling, order flow, trend following, quant trading, scalping, hft, "in-play" momentum trading, position/swing trading, CANSLIM, etc...and There's something to be taken from all of them.

[@carlosharper7414]

I was thinking the same thing

[@akashpantha]

🔥

[@welcomelubisi4107]

what was the second platform?? jigsaw, cqg and what?

[@robotman8651]

TT

[@welcomelubisi4107]

@RobotMan thanks

[@alphabeta8403]

I happen to be a successful swing trader last 5+ years

[@tjhammer24]

47:00. Scaling vs all in- all out

[@ethanrichards8434]

Sierra chart DOM does the up/down tick splits now just like jigsaw for any readers who were thinking about switching for that reason. I personally use jigsaw but Sierra chart is a great second option if your broker doesn't use jigsaw etc

[@proprietarycurez8463]

Plus you can automate with Sierra.

[@sergevoz9554]

Just started using Sierra. Is it everything I can find in settings?

[@quasars6365]

Great interview but platform biaised... Sierra chart has a way more powerful dom than those mentioned for a much much cheaper price, and that was already the case at the time of recording ...

[@proprietarycurez8463]

Not more powerful but cheaper,,, unless you value education and Journalytix.

[@vegitoblue4390]

Swing trading made me money, day trading is harder I lost all swing trader got me lol. Swing trading is suitable for most people than day trading is. I'm dong better day trading but it does take lots of time and losses to finally get it. AI: I don't think AI will take out human traders out, no matter how smart algos get because their job is to trade fast, so if a trader can trade along AI just like driving behind an ambulance which opens the path for you. If trading changes because of it then traders who can easily adapt will prevail. I could be wrong but that's what I think will happen.

[@gomesdiogo]

27:41

[@fishpiana890]

Was hard to determine if he would say good bye or not.... he did not

[@proprietarycurez8463]

"Alright" counts.

[@rashad1saifullah]

His example of swing trading is inaccurate around 1:01:00 . Swing trading is holding for moves longer than 1 day, what he mentioned was more like day trading or scalping

[@TheJermy2000]

rashad1saifullah swing trading still doesn’t work

[@speedwayman100]

@@TheJermy2000 tell that to wayne mcdonell

[@proprietarycurez8463]

swing highs & swing lows

[@chrisbranton73]

@@TheJermy2000 wat. I make bank on swing trades

[@chrisbranton73]

He knows the order book, but he doesn't know other niches of trading. His talk of swing trading was biased. He says you can't know where the market is going in a few hours (should be days), but he's wrong. It's just like his scalping method--you don't have to know, it can go up or down. You just have to be in a good r/r situation and be right roughly half the time. And also, knowing how to read the order book is great for swing trading. It helps me enter positions and exit my positions with discretion. I'm not all-in all-out trader either, buys and sells don't have to be so rigid. It's limiting in my opinion...

[@pranjayarora8115]

44 MIN STOPLOSS IS NOT VISIBLE IN ORDER BOOK (2) STOP PROFIT ORDER VISIBILITY CHOICE OF TRADER

[@JoshuaBudd]

Grady apparently has a different definition of "swing trading"? He alludes to it being a waste of time and states nobody knows what the market is going to do in 2 hours -- from: 1:04:21

[@vegitoblue4390]

ikr swing trader is safer, it's basically long term investment in a short period of time lol

[@oroboros4858]

@@vegitoblue4390that’s not trading then, that’s called a short term investment

[@eyeservantez]

Swing traders " I never met a successful scalper". Scalpers "I've never met a successful Swing trader." Me "I trade opportunities not time frames".

[@eyeservantez]

Nothing really about Supply and Demand. More like level two order flow.

[@oroboros4858]

That is literally supply and demand, the bids are the demand, supply is the offers and price is the equilibrium point where they both trade.

[@chasegiddens8697]

introductory to a trading lesson talking about tweets... lmao

[@paws4thought449]

He is a pit trader. Not an ex-hedge fundie. So I would say to John to stick to what you know before you start throwing rocks

[@Ninja-iq2xt]

30:00

[@babasabbirajdar3138]

If he is scalper he should know supply demand will not work on lower time frame that can be CONS trading

[@davidwidlak2097]

Supply and demand is visualised in the dom, and for scalping you use the dom... And it is very effective

[@pranjayarora8115]

order book has manipulated even 1000$ trader can manipulate i did it in andhrabank at lower bid from rtp

[@caleb7799]

wish he would stop smacking his lips....

[@s.w.u.1972]

.... and now we re going back to the outdated mt5 platform.....good job☹

[@aLittlePal]

good point on treasury futures.