Orderbook trading course

6. Highs and lows

Another important factor for order book trading is the importance of the current high and low for the day. Basically, trading futures is really a kind of game in which the highs and lows of the current day are taken out. So always remember, if we are trading near the current high of the day, we are more likely to go long and take it out than to spin and take the low out.

In the example below you see a volume ledge on the 139'40 and on the 139'200. The volume ledge on the 139,200 is only 2-3 ticks away from the current daily high, which means there is a higher probability that we will break the current daily high. The volume ledge on 139'40, on the other hand, is far from the current daily low, which means our chances for a successful trade are better there.

Please note this tip / rule for your next trades.

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