First Edition License Notes

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1 First Edition License Notes Please be mindful of copyright 3 Steps to OrderFlow Trading Success is intellectual property that is protected by copyright law. This may not be republished or distributed, either for financial gain or not, without written permission of the author. Copyright 2014 OrderFlowEdge.com

2 Introduction Hi there, I m Thomas DeLello, 17 year market veteran and full time OrderFlow trader. When it comes to trading I don t prescribe to the school of conventional thinking because I ve never been interested in conventional results. In fact, I learned early on that a change in your market perspective can make a huge difference in your trading so the path I ve taken is much different from most traders. My mission is to share what I ve learned and coach traders of all experience levels on how to utilize my proprietary Order Flow trading strategies in order to achieve a serious edge in the market. All of my success in the market revolves around a very simple approach that follows the real driving force in the market...orderflow! OrderFlow, simply put, is real-time Supply & Demand. It s this real-time Supply & Demand, caused by all the buyers and sellers coming into the market that creates price action. Once you understand how to measure OrderFlow imbalances that occur in key areas of the market, you become comfortable accepting risk because you know that probabilities are strongly in your favor. There is a simple elegance to the way we trade at OrderFlowEdge, and what it really boils down to is the data we look at (the OrderFlow information that the market is giving us), and how we have that data is organized on our screens in order to quickly identify opportunity. That s our Edge! and that s where the Trade Tunnel comes in. What the Trade Tunnel does for us is automate the important OrderFlow information, across several timeframes, simultaneously, and reveals precise trade entry, confirmation, risk levels, and profit targets. And, it does all of this much quicker than we ever could on our own. After all, how can we as humans possibly process all of the important, relevant data coming into the market on our own? How can we compete with the High Frequency Traders and Algorithmic Trading Programs (Algos) in the market every day? Fact is, you can t compete with them but, you can join them! And that is precisely what the Trade Tunnel allows us to do.

3 Why do we follow the Order Flow? OrderFlow drives price and change in OrderFlow precedes change in price. The Smart Money follows the OrderFlow High Frequency Trading (HFT) and Algorithmic Trading Programs (Algos) all follow the OrderFlow. In order to succeed in today s market, you must be able to understand and follow OrderFlow in a very quick and efficient manner. Order Flow and Stop Runs Brogaard finds that the aggregate trading of the 26 HFTs in his sample is consistent with a strategy based on order-imbalance (OrderFlow)-driven price-reversals. - Adam D. Clark-Joseph Harvard University When you are a professional trader, you learn to trade with stops. For example, if you are long the ES (Emini S&P 500) at , you may set a stop at (depending on your risk management). If the trade goes against you, then the trade exits with a small loss. The ability to manage risk properly is vital for any trader to be successful. In the era of High Frequency Trading (HFT) and algorithmic trading, these programs are looking to stop you out (stop runs). With the example above, the HFT programs are constantly driving the market lower looking for stops until the amateurs are stopped out. When this happens, there is a shift in the Order Flow as Demand exceeds Supply and the market floats higher again. This happens in every market and in every time frame. Every ebb and flow in the market is about running stops. How can we get an edge in the market in these conditions? By utilizing our proprietary software and methodology, we identify the stop runs in advance. Now I want to share with you the 3 Steps that we use to identify serious opportunity in the market and the 3 Steps that will help you define an edge in the market so you can be consistently profitable!

4 STEP 1: BIAS Bias is one of the most importance pieces of the puzzle. Who s doing a better of job of driving price buyers or sellers? We need to know who s presently in control of the market because that s the direction we want to trade in. The charts we use are bar charts displaying both price and current OrderFlow conditions. Before a trade is placed, I need to make sure the following conditions are met: The OrderFlow Control Bars must be showing Blue for me to take a long trade. The OrderFlow Control Bars must be showing Red for me to take a short trade.

5 Step 2 Ideal Trade Location Trading should be logical and concise. The Trade Tunnel Dashboard will show you where to enter each trade with ideal trade location. The lines that are surrounding the bar charts are the Trade Tunnel (TT) lines. This is our proprietary indicator, a study we programmed based purely on the OrderFlow information coming into the market real-time. Price reacts at the TT Levels on average 73% of the time. By reacting, I mean price changes directions. Before a trade is placed, I need to make sure the following conditions are met: Price simply kissing the Trade Tunnel (TT) without going fully inside the Trade Tunnel.

6 Step 3 Confirmation To increase the odds in our favor it s important that we see confirmation, in the form of real time OrderFlow clues, before a trade is placed. The yellow numbers that you see at different points in the chart are called Delta Force scores. When the Delta Force score becomes lower, it s telling us that a shift in OrderFlow is taking place, and we can expect the market to react in the opposite direction. Here are the 2 main confirmation clues we look out for: Blue OA bars telling us that buy pressure is starting to increase. Lower Delta Force score telling us that sell pressure is decreasing.

7 What s Next? Although our method is very complex and robust behind the curtain, learning how to read OrderFlow and use the Trade Tunnel is a very logical, and therefore, a simple process. But, there is a learning curve, and you must be coached. Please keep an eye out for an and an invitation from us, to attend a live demonstration where you can witness the Trade Tunnel Dashboard in action. During this session we will also delve deeper into our OrderFlow concepts and market perspective so you can continue to gain a grasp of just how powerful trading the OrderFlow way is. Please do let me know what your struggles are. What are your biggest frustrations or challenges when it comes to trading? Please me at We read every . What are some of our students saying about our program? Thomas, Just wanted to let you know that I really appreciate this list of steps on how to go about quantifying order flow. After studying it for a couple of days I was able to personalize how to use it. I am a pilot and one of the things drilled into me during pilot training was to scan my instruments in a specific order continuously during the flight to keep track of the performance of my aircraft. I now realize that is exactly what you have provided your students a specific order to scan the charts to continuously determine the performance of the market. WOW! Thanks - Robbie C, Seattle, Washington, US Tom, First and foremost I have to say that I am truly thankful that I am able to have you as a mentor. I have a new found understanding of the market, in addition, before I used all these different strategies, and lines, and always missed the correct entry and exit points which had led me to having very little success in the market.

8 Although, you have simply highlighted ideas on how to view the market (different from the majority of retail traders) you are providing a sophisticated insight rarely seen in trading blogs. Most people do not want to leave their own vantage point whereas you want to understand the mindset of your competitor. A very simple concept (in war and in competition) but for some reason rarely addressed by retail traders. Bernadee M, Orlando FL Thomas been going through my stats and been with OFE 25 months now of those I have traded 24 (Took last year August off) had only one breakeven month, the rest all positive with all my best performance stats within that time over a period of trading full time 143 months Dean The orderflow edge methodology provides clear, identifiable edges necessary for profitable trading. Since I ve been with orderflow edge I have learned 5 edges that make up my predominant criteria to enter trades. Being clear on my criteria has in turn allowed me to focus on my mental and emotional capabilities so that I am exhibiting consistent profitable behavior. The consistent feedback from the orderflow edge team has also been instrumental in shaping my trading behavior. Thanks guys! Keep up the good work. Jason M. Thomas, I have to say...your wisdom is great...teaching that its not where one got filled, but why...the clues. Without learning the system, you cant go on and trade confidently and make it a business...thanks Tom T Thanks for your help, Thomas, and for creating this program. I've been day trading 10 years, full time 5. I've made a decent living at it. But I always felt something huge was missing. Now I feel very "calmly confident" that the missing piece of the puzzle is right here at OFE. Max V i just can't understand how somebody can trade the ES without OFE Octavio Hey Guys, Something I've been meaning to do for a while now so here it is. I joined OFE back in Sept./Oct. '11. After having been in a couple of different rooms and having taken various courses I was a bit

9 skeptical. While i may have picked up various tidbits of info in the other rooms / courses they were basically a waste of time and money. I basically told myself that this would be my last attempt to learn and make trading a viable undertaking. I also dedicated myself to learning the methodology and giving both it and myself the necessary time for a realistic test. Well, and the reason for this missive, in the past year OFE has exceeded my wildest expectations. I am able to confidently trade each day and take consistent profits from the market. So this is basically a big Thank You for all for excellent teaching and support. I continue to follow the room each day even though I am confident I can use OFE completely independently. I like the community you have built and there is always useful information being relayed. I look forward to being a member for years to come. So once again Thomas thanks for your efforts and instruction. Best Regards, William

10 FAQ ABOUT THE ORDERFLOWEDGE METHOD Q: Do I need a specific charting platform or data feed to access the Trade Tunnel? A: No, the Trade Tunnel is accessed via our member portal. You just simply log in to access the dashboard and information. Everything is displayed real-time with zero lag. We do also an option where you can have the Trade Tunnel on your own personal platform, but there are some charting and data feed requirements. Q: Is the Trade Tunnel a black-box system? A: No, the Trade Tunnel is a dashboard containing all of the important OrderFlow data a traders needs to succeed. We as independent traders use the information to pin-point ideal trade location. Q: As a member, do I receive interactive training? A: Yes, all of our members receive regular live training sessions & daily market analysis in the member s trade room. Along with that, members also receive video based training to get them familiar with our method on their own learning pace. Q: How long does it take someone to learn how to trade with the Trade Tunnel? A: Every trader will be different depending upon experience level, and the amount of time they can commit. But, that being said, our method is simple to understand to the point where we feel anyone can learn this. The average amount of time to have a firm understanding of our OrderFlow concepts is about 2 weeks.

11 HYPOTHETICAL PERFORMANCE RESULTS WHERE DESIGNATED AS "HYPOTHETICAL PERFORMANCE RESULTS," THE RESULTS SHOWN ARE BASED ON SIMULATED OR HYPOTHETICAL PERFORMANCE RESULTS THAT HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. UNLIKE THE RESULTS SHOWN IN AN ACTUAL PERFORMANCE RECORD, HYPOTHETICAL PERFORMANCE RESULTS DO NOT REPRESENT ACTUAL TRADING. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT OR TRADE WILLOR IS LIKELYTO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. BECAUSE THESE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED OR HYPOTHETICAL TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOTGENERALLYINVOLVE FINANCIALRISK AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO APARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS THAT CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMBEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECTACTUALTRADING RESULTS.