USDJPY Order Flow: Let The Structure Be The North Star

Hey traders,

Once again we are letting the power of the OFA script dictate the dominant structure.

Let me showcase a neat example in the USDJPY.

As one can observe, the daily chart has been predominantly buyers as per the circles outline. For position buyers, it is as easy as to go long or short when the structure suggets so. For those wanting to engage in swing or scalps, then keep reading...

How can you find an entry if you fall under the category of 'swing' or 'scalp' trading?

By reading the market structures and the subsequent entry signals (diamonds and circles) that the OFA script fires in the lower timeframes in line with this daily chart.

Remember the two key main features of the OFA indicator:

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.

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