daytradr 3.2.2.0, Jigsaw 2022 Product & Group Therapy Plans

Published on: March 30, 2022

Today I am writing to you from a little detox resort in Samui where fat people go to be reborn into skinnies again. Like many, I experienced a little ‘depression’ of sorts during covid and ate the entire contents of the refrigerator every day.  I gained 23 kg and the wife said that this was “a bit too much Pete”, so she sent me here where I am on day 31 of a 37-day juice fast and about 13 kg lighter.

Much of the weight seems to have been lost from between my ears – and so I have not been replying to emails much or booking meetings. Normal service will resume after 11th April. 

Till then – you haven’t been forgotten if you think you have!

Today, we are releasing daytradr 3.2.20. It’s a maintenance patch and the list of issues resolved are below. This is a mandatory release as we’ve changed the way we distribute the charting licenses (the ones we pay for, not the ones you pay for). You won’t notice a difference, but charts will stop working on older versions on April 1st. 

We’ve been quiet in the past 12 months as we’ve been ramping up our development capabilities considerably. That included a brand-new development office. We still have staff in Thailand, India, Spain, Portugal, and Brazil, so not all developers are in the new office – but we needed a core group of smart people in one place and all new developers we hire will be there too

The process of getting them productive took a lot of time, but now we are ready to execute our 2022 plan. In short, this plan is:

• Do less work. In other words – don’t bite off more than we can chew in terms of functionality and partner relationships. So, we do less but better and end up doing more.
• Use part of the development team to push out “minor” enhancements at the rate of 1 release per month. By “minor” – we mean minor to us, not minor to you – because some things we do will have a major impact on you but not be a lot of hours for us.
• Another part of the team is on longer-term projects. Stuff that won’t see the light of day for at least 6 months. Some that you might not even be aware exists but is there to build architecture for the REALLY good stuff. 
• We have some unreleased items from last year that need a 3rd party component – and due to us being late, they ended up not being able to start their part – but that begins soon.
• We are also looking to complete charting – and we do use 3rd party libraries, and they have some very cool features we can give you with zero work to us. The other timeframes will come as well as significant performance boosts. This will help another “tranche” of users on other platforms to consolidate to 1 and reduce overall fees.

To expedite the monthly releases – the whole company gets a bonus the first time we commence working on AND release some features within the same calendar month. Well – the whole company except me. Apparently – I can only give bonuses. I expect this to happen in April or May – once it does, then expect new functionality each month.

In terms of team changes elsewhere – you may have noticed a video recently from Fernando on the Momentum Tails (here it is). It’s a good video – you can hear he’s a bit “robotic” in it – but he does actually have more than one tone to his voice.  The content is good, and he’ll relax more and bring a more natural, conversational tone as he does more. So, kudos to Fernando!

Then Gonzalo has been given the responsibility for what I call “Product Marketing” – or deciding what we do next. It’s him leading a team effort, and I always add my 2c – but he’s doing all the legwork, writing requirements, etc. HE also runs the support – so he knows the gripes and requests. So, the “idea factory” is back online.

With Gonzalo and Fernando and the new Dev team in place, we are no longer putting systems in place. The Group Therapies will start again, and the first will be on figuring out how you find your market. We are all so different – yet 99.99% of Futures Traders want to trade the S&P500. 99.99% of you will still think you are in the percentile that should trade S&P500 – but it’ll be food for thought. Then it’ll be back to individual trader group therapies. 

If you are not in the inner circle yet, and you want your say in what goes in the next monthly releases – go to https://support.jigsawtrading.com and put a support request in with the title “Inner Circle” – and we’ll let you in. Gonzalo is in there and will pop up as we are discussing the nuances of new features. Often we can’t decide if a feature should work one way or the other, and that’s where your input comes in handy.

For the release, here are the items fixed:

• New licensing files added for Charting Modules
• Improved Rithmic Reconnect Process/Connection Stability
• Backup connection timeout added for Tradovate
• Fix: Some instruments not loading data on existing D&S
• Fix: MT5 does not rebuild Volume Profile on reconnecting
• Fix: Gauges not showing the right high and low values on the needle for bridge connections (MT5 and NT8)
• Fix: Some Footprint charts do not move scroll on a new bar
• Improved Error Reporting on charts when no bars were available
• Fix: Bars missing on chart after adding cumulative data (Rithmic only)

As usual, the download is available here

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Order Flow itself is simply information. Just like charts, it can be used in a number of ways, some good and some bad. But let's first break down order flow into it's components so we all agree what we are talking about:

Order Executions/Tape Reading - This aspect is the real flow of orders. It's the information we see in Time & Sales, Footprint Charts, Cumulative Delta. It is looking at market orders, either as they execute or historically. I guess this is the "true order flow". Every trade is a buy and a sell. We look at market orders because we consider them to be more aggressive. When someone trades with a market orders, they are giving up a price to get an instant fill. Limit orders on the other hand just lazily sit there waiting for a market order to hit them. Often these are market makers with no directional conviction. So we see market orders as being more significant.

But we don't use these in isolation.

Volume Profile/Positions - The tape reading part helps us assess various things like momentum, traders getting stuck, balance of trade BUT the volume profile helps us understand where people are positioned and likely to get stopped out. I sometimes call this "Order Flew". It's important to know when trades will be "washed out" - for example - if we have a volume cluster on the S&P500 Futures and the market moves up 100 points and back down to it, it's unlikely short term traders on either side that were positioned there will still be there. But recent, nearby volume helps us assess areas of positions.

Market Depth - The bids and offers, the lazy passive orders waiting to be hit. This is part of the story but in terms of overall importance, I'd put it at around 20% at most. For example - if you return to the high of the day on any market, the offers will be quite large directly above the high. It means nothing at all. It's just a quirk of the market. It does not help you tell if a price will hold. On the other hand, if you see large depth and as we approach it, we see more added to the depth in front of that price, it means others are front running that depth and that is a useful bit of information.

This is the key - it is all just information. Just like price charts are information. When people look at Order Flow, they consider it to be a technique more than a set of information. They look for things like iceberg orders and decide to make a one rule trading system to fade every iceberg, For these people - yes, order flow trading is overrated because they are trying to ignore everything else going on in the markets and construct a trading system a chimp could execute.

For those looking to improve a decent trading approach, the best thing to focus on in Order Flow is momentum. Once you can read momentum you can:

• Avoid getting into positions when momentum is against you.
• Confirm trades are working after entry when momentum goes your way.
• Exit trades in profit when momentum fades.

That's perhaps the easiest way to use order flow because momentum is easier to read. It's about the market continuing to do what it's already doing. On the other hand, reading a turn in the market with order flow takes a higher level of skill and a little longer to learn.

Order flow can't put lipstick on a pig. It won't help you 'improve' something that doesn't work anyway, which is why whenever someone calls me, the first thing I ask is what they are currently doing and we discuss whether they need a reset or whether it will actually help.

When Jigsaw started back in 2011 - we were one of the first in the space and certainly had the best education. It was always going to attract the underbelly of the trading education/tools world and now we see stuff out there that is so complex but so impressive and futuristic that new traders are drawn to it like moths to a flame.

So here's my advice when looking at Order Flow

• Order Flow can't improve something that doesn't work.
• Order Flow can be used on it's own, without charts to enter and exit the market but you also have to be able to recognize different market states that need different/altered setups. There is nothing magical about this.
• Don't start jumping at shadows and take 50 trades an hour in your first week looking at Order Flow, be selective. It can be exciting to see cause and effect play out in front of you for the first time but don't overtrade.
• Do drills to learn how to read it before you trade it.
• Markets can only go up and down. Don't overcomplicate it. If you have too many Order Flow tools on your screen - you will not be able to make consistent decisions. Less is more.
• Take time to choose a market with a pace you like. Interest rates might send you to sleep, the DAX might give you a heart attack.

It is hard to see how a set of information could be overrated. It is true that some methods of presenting this information are better than others. It is also true that some people simply get on better with different tools (e.g. Footprint vs DOM).

There's a middle ground between complexity and simplicity that will leave you making consistent decisions where you improve over time. For those people, Order Flow will be way underrated because they will be the one's getting the most out of it.

Those that jump in with both feet on day one and those that have 100 different tools up, for those, it's a painful experience.

Keep it simple and manageable. Start with momentum reading and build from there. You will never look back.