In the Oil Trading Room, we put indicators on our charts for two basic reasons: 1) as a reminder of something we should know. This is like putting something on your daily calendar to remember. 2) The second reason we put an indicator on our chart is because we want to be able to see something that is happening that you cannot see just by looking at the chart (something that is inside the market but that cannot be discerned without it). This generally falls into 2 main categories: Order flow and Momentum. That being said, this article is about Order Flow indications that you cannot see just by looking at a chart that is a leading indication and that provides a trading edge.
Order flow analysis as we do it in the trading room is done with respect to price action. If you have tried trading order flow and have not been entirely successful, this is likely the reason; you have not combined them for a complete analysis. So first we know what the price action is telling us, then secondly we want to know if the order flow is going with the price action or against it. Thirdly we want to know momentum (which is beyond what we are covering in this article).
If the TTO is going against price action, then traders are likely trapped on the wrong side of the market. This is why we call our order flow indicator the Trapped Trader Oscillator (TTO, or STTO for Smart Trapped Trader Oscillator). In other cases, the TTO is going with price action. Depending on the price action, we want to know when these two cases are present because in the room we say, "Price Action plus Order Flow plus Momentum." When you have those three things happening it typically means there is opportunity as the market is in a state of imbalance. Imbalance that will likely correct or continue to your benefit (continue reading for probabilities / percentages).
The TTO pump is the most basic form of order flow imbalance as it relates to price action / structure. Here are the rules for it: 1) if the TTO is above or below the dot dashed purple lines (see image below), then it is a TTO pump.... and 2) If the TTO has broken two prior TTO lines, then it is also a state of TTO pump. 3) Both the above can be true, in which case you will have a double TTO Pump.
TTO Patterns combined with price action patterns in and of themselves can have a theoretical probability of about 80% - 96% for follow through and these methods are taught daily in the trading room.
Be sure to ask questions in the room if needed.