Levels

Why should watch Levels?

 Because a bunch of people do it. BUT that can also be a Pitfall where be Big Boys hit small traders and let them bleeding out. But here´s the great one: By watching the Flow you can see this activity - sometimes really clear sometimes not so (spoofing, flipping, absorbing and so on)

Why in my Opinion the Flow is much more important then Levels?

 Because price discovery is creating by Orders - The Interest of Buying and Selling. We as Day Trader only see "The Interest" but not the Reason! A Level can be the Reason for that it can also not! You actually nothing know about some possible Reasons below. Is that a:

-Hedge Activity or
-Speculation or
-Closing Positions (Loss or Gain does´t matter but its logical to say a closing from a Loss is characterized by much more hecticness)
-Delta Gamma Hedge (Options thing that got a BIG impact on Futures)
-Closing Puts/Calls if you a Option-writer and need Buy/Sell Futures Contract to deliver your Obligation.

All this things you actually DONT KNOW!

So again Why we should watch Levels?

Answer it to yourself!

So Levels are important but its also about the

-History – where market came from and what story he tell us.
-Order Flow – how market orders react on limit orders/ which side is more active.

Sometimes Market turn in a middle of nowhere – Level traders
look stupid from the laundry - Order Flow traders see this coming and can react on that. That does´t mean its free ticket to trade all day long but your trading activity is focusing on Market Behavior and not on static level every can see!

Trading Order Flow is like trading in the PIT and watch guys Buying and Selling. With the big difference unfortunately we did´t see the big boys that make this thing pretty tricky.