Tracking the Aggressors with TradeFlow
TradeFlow is CQG’s innovative charting style that is color coded to track traded volume at the ask price versus bid price. The high and the low of the TradeFlow bar is the best bid and ask prices. The TradeFlow bar is colored green for the percentage of volume at the ask price (buying) and red for the percentage of volume of trades at the bid price (selling). For more information on TradeFlow, please see the article list.The chart is using the 5-tick aggregation.
Thursday’s trading is a good example of how the aggressors can be the buyers or the sellers. But, if both the buyers and the sellers are not aggressive, then the market goes into a choppy trading phase.
We can see that at the start the green line, which is the running sum of the trades at the ask price, was holding above the running sum of trades at the bid (the red line) from the TradeFlow Volume Cross (TFCross) study. But, then both trended down, indicating traders were backing away from buying or selling, and the market edged down to support.Support held, then the buyers took the market higher, but both lines tracked each other. This is ongoing choppy trading.
The TF5Um5D study, which is the difference between the buy and sell lines, went into positive territory just past the middle of the chart. Notice the short dips into negative territory on the right hand side of the chart. The small dips indicate temporary selling against the up trend.
Today, traders hit bids right after the open. The volume is heavier, as indicated by the TradeFlow bars are wide and brightly colored. For the moment, the market is holding at support, but the buying (the green line) is falling as the inside market is climbing. Looks like a choppy day at the start.