Here at Littlefish FX, our whole trading ethos is centered around trying to trade in the same direction as the big fish: the Banks and major financial institutions. Whilst in the past, trading aspirations such as this would have been relatively impossible due to lack of information available to traders outside of these institutions, we now find ourselves at an incredibly interesting and exciting point, with market data, information and analytics creating opportunities for retail traders that have never before been seen.

With that in mind, we have designed what we believe to be some of the most consistent and profitable trading strategies available built around this central theme of using the available market data to trade in line with the big players instead of against them, a trap which many retail traders fall foul of.

These strategies comprise of using the Order Flow Indicators available on the Reuters Eikon trading software platform and our very own COT indicator (to be used on NinjaTrader 7) which automatically displays the information from the weekly Commitment of Traders report in a really effective visual format on your charts.

We have also developed an Order Flow Indicator package which can be used on Metastock Pro which is a professional market data & charting package, the LFX Order Flow Trader, which automatically generates trading signals for you based on a confluent crossover of the Psychology & Order Book Regression indicators.

Here is a quick look at a strategy combining both the COT indicators we built for NinjaTrader and the Order Flow Indicators we use on Eikon.

So first of all we look to our NinjaTrader charts to see if the COT Indicator is giving any clues as to potential moves. As many of you will now be aware, the green lines on the indicator signal the Non-Commercial market participants (the Banks & institutions) and these are the guys we want to be trading in line with.

USDCAD

Looking at this USDCAD Daily chart we can see price beginning to trend higher from the September lows, whilst COT indicators remain to the downside (Green lines below blue). However, as price continues higher through early October, indicators begin to move to the upside and we then see bullish crossovers on Index, Strength, WILLCO & Net Positioning with Momentum moving steadily higher. With these crossovers in place we now have our Bullish trade signal, at which point we move across to our Eikon charts to look for entries using the Order Flow indicators.

COT&OrderFLow

We can see that on the Bullish candle formed (which marked the final COT crossover on the Index indicator) both Psychology and Order Book Regression indicators crossed to the upside giving us our long trade entry.

Whilst we did see initial bullish crossovers on the COT indicator confirmed by a bullish Pin Bar, we didn’t get the confluent Bullish crossovers on the Order Flow indicators, and as you can see, price moved lower from that Pin Bar before we finally got the entry signals on the Order Flow indicators. This really highlights the value of combining the two indicator sets to clarify entry points once a directional bias has been established.

USDCAD

With COT indicators remaining at highs, keeping the bullish bias intact we can use the order flow indicators on lower timeframes to add to bullish positions.

COT&OrderFLow

We can see here on the H4 chart that after price consolidated for a period shorty after our initial long position was established we then saw price breaking out to the upside. As this continued bullishness occurred we can see that Psychology & Order Book Regression indicators crossed to the upside giving us a signal to add to our core long position.

This is a very quick look at this combined strategy using both the COT indicators on NinjaTrade7 and the Order Flow indicators on Eikon, but the profitability of combining these tow indicators is evidently clear.

This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.

Authors' opinions do not represent the ones of Orbex and its associates. Terms and Conditions and the Privacy Policy apply.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Education feed Join Telegram

Editors’ Picks

EUR/USD: Bulls rejected and bears eye break below 1.0480

EUR/USD: Bulls rejected and bears eye break below 1.0480

1.0550 is capping the bulls that look for space above 1.0600. The price moved in on the support zone and has found buyers again. The bulls eye an upside continuation with 1.0600 on the radar on a break of the bull cycle highs.

EUR/USD News

GBP/USD aims an establishment above 1.2200 ahead of US forward inflation indicator

GBP/USD aims an establishment above 1.2200 ahead of US forward inflation indicator

The GBP/USD pair is aiming to shift its auction profile above the round-level hurdle of 1.2200 in the early Asian session. Earlier, the Cable displayed a firmer recovery after dropping to near 1.2100 on Wednesday.

GBPUSD News

USD/JPY holds gains around 137.50 as yields retreat

USD/JPY holds gains around 137.50 as yields retreat

USD/JPY is consolidating gains around 137.50, as US Treasury yields lose their recovery momentum amid a cautious mood. The dovish remarks from BoJ's Nakamura helped the pair's advance earlier in the day, as the central bank divergence theme continues to play out. 

USDJPY News

Editors’ Picks

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD fades recovery moves above 0.6700 ahead of RBA Bulletin, Australia Trade Balance

AUD/USD struggles to defend the latest bullish impulse around 0.6725-30, after bouncing off a one-week low the previous day, as traders await updates/data from Australia during early Thursday.

AUD/USD News

EUR/USD: Bulls rejected and bears eye break below 1.0480

EUR/USD: Bulls rejected and bears eye break below 1.0480

1.0550 is capping the bulls that look for space above 1.0600. The price moved in on the support zone and has found buyers again. The bulls eye an upside continuation with 1.0600 on the radar on a break of the bull cycle highs.

EUR/USD News

Gold eyes further upside on downbeat United States Treasury bond yields

Gold eyes further upside on downbeat United States Treasury bond yields

Gold price seesaws around $1,785, after posting the biggest daily gains in a week, as buyers seek more clues to approach the five-month top marked earlier in the week. The yellow metal’s latest run-up could be linked to the downbeat performance of the United States Treasury bond yields.

Gold News

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price has investors dialing in as Network advancements are arousing speculation. Still, the technicals will need to show forth stronger signals to justify opening a long position.

Read more

What happens after the Fed reaches the terminal rate

What happens after the Fed reaches the terminal rate

The discrepancy starts to show. What will the Fed do? For now, the Fed is raising rates to stave off inflation, and are expected to level out at around 5.0%. 

Read more

RECOMMENDED LESSONS

7 Ways to Avoid Forex Scams

The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?

What Are the 10 Fatal Mistakes Traders Make

Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.

Strategy

Money Management

Psychology