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Quantower

Trading with Power Trades tool on ES and NQ futures

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The main goal of this thread is to show what Power Trades is and how it works in different markets. We will show some patterns on the ES and NQ futures, as well as discuss possible improvements to this functionality.

What is Power Trades?

Ok, first we will consider what the Power Trades is and how it finds zones.

Power Trades shows the zones with the execution of a large number of orders in a very short time, which will affect the price change with a high probability.

Here are a few examples of how it looks like

Screenshot_42.thumb.png.960675249488a28d3fe6135abb3132db.png

24156570_assets_-LD6FsRvQ3jgwJIg6O7r_-Lg9IKncZb0fllDgcTgG_-Lg9Tjqk-E5ssTNFxPEc_Powertradesfores.thumb.png.54a74f57e256af978b1d5bea5f5a98f7.png

How it finds zones?

There is a continuous process of placing, changing and executing orders in the market. All this affects the price change and the expectations of traders regarding the future price.

When a large order appears at a certain level, the price is more likely to come to this order and it will be executed because the market is always looking for levels with liquidity. This already applies to the order flow and the mechanics of orders matching, so we will omit the principles on which the orders are matched.

It is only important to understand that "abnormal events" occur in the market at certain times. Execution of a significant volume of orders in a very short time is one of such events.

The Power Trades Scanner has several important settings that directly affect the results:

Screenshot_43.png.3c9ccab5395b3fc5ff066c08319a2c52.png

Total Volume — the minimum value of the volume that should be traded during the specified time interval
Time Interval, sec — the time over which the Total Volume should be traded
Basis Volume Interval, sec — this parameter shows how much % took the traded volume in the total volume for the specified time.
Zone Height, ticks — this parameter will show only those zones where the height is less than or equal to the specified value (in ticks).
Level2 level count — the number of levels that are involved in the calculation of Imbalance and the Level 2 Ratio column in the table of results.
Filter by Delta,% — the parameter will show zones that have a delta value greater than or equal to that specified in the setting. The value must be specified by the module, so the table will show both positive and negative delta values. We recommend paying attention to the zones with the delta above 50% (taking into account the specifics of each trading instrument).

For example, let's set the Total Volume of 2000 contracts and Time Interval in 3 seconds on the E-mini SP500 futures. This means that the scan will be based on the available history and will show on the chart only those zones that have such a volume for the specified time.

Screenshot_45.thumb.png.8c7fa8d7bd01a502215d9b671bdce6d1.png

Additionally, it is worth to set a delta value to filter out the zones with one-side trades. The more delta value, the high probability that the price will reverse.

Screenshot_46.thumb.png.e0dcc2256e923a855b2026938b3b21e7.png

So, as a starting point about this scanner, I think this information will be enough

Edited by Quantower

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Today we have a huge volume on Europian session (2700 contract per 3 sec). Enormous basis ratio (64%) means that the value of this traded volume was 64% compare the total volume during the last 5 mins. For ES it's a very big number

Screenshot_57.thumb.png.e1f512b94c58267844f2e8061d64a39b.png

The price has fallen down to zones of the previous day. And we expected it return to our zone.

Screenshot_58.thumb.png.966c4860dbfb421febaa5d14f82a6fe8.png

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ES moves fast, updating its historical highs... One question — where we'll see a resistance that will stop the movement?

We know that catching a knife is a very dangerous strategy, so it's hard to talk about what levels ES can reach and from what levels to bounce off.

Just a fact — below at 2980.75 we have an untested point of control (POC) where the price can go.

attachment.php?attachmentid=3377269&d=15

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Yesterday I posted several screenshots on my telegram group with Power Trades signals on ES futures. It showed buy signals. 
The first screenshot it's Micro ES futures with a lot of zones

attachment.php?attachmentid=3407625&d=15

The second screenshot it's ES futures and the same place. Power Trades shows the big volume of 2090 contracts that were executed for 3 seconds.

attachment.php?attachmentid=3407628&d=15

Why the zone on 2823 is so interesting... We have several signals — VWAP (you can read in our knowledge base how I use it), Price Gap, Power Trades Zone on Asian session

attachment.php?attachmentid=3407632&d=15

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