Silver Explodes - A Lesson To Track Shifts In Order Flow

Hey traders,

In today’s analysis, it’s hard to ignore Silver following the 🚀explosive🚀 8%+ move up.

Let’s unpack the action as of late via the OFA script :

To do so, I am not going to apply any subjective type of analysis such as drawing trendlines, counting waves based on what way the wind blows, or any other form of guessing game…

Instead, we let the formation of fractal structures (objective measure of moves) create the pathway from which we can all make decisions. Fortunately, there is no need to engage in laborious manual work?

Why? The OFA script has all of us covered. So, with that in mind, what can we observe in the silver market?

What recurring pattern do you notice? Clue - Pay attention to the visual Ms and Ws type pattern forming…

These patterns entail, as stated in the chart, “dynamic fractal-based order flow cycles where a decreasing involvement in one direction (depicted by cycle/wave/line counts leads to a predictable move in the opposite direction seeking out the next equilibrium area, in most instance, with potential profits as a by-product…”

If you are into disseminating order flow, nothing I’ve seen beats the objectivity in analysis one can carry out via the formation of structures derived off fractal structures. Note, the chart ignores the dominant trend and simply focuses on the M and W patterns. Can you imagine if you start to align trading in the direction of just simply the dominant trend in the higher timeframes + proper risk management? Let you fantasise with that!

Remember the two key main features of the OFA script:

Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude?

Velocity: When it comes to the distance the price moves, the magnitude is only ½ the equation. The other ½ has to do with the velocity of the move or the speed. Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg.

DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.