Order book forex trading is one thing that I wish I had when I started trading years ago. An order book is a read out of every trade that is being made in a market. Some traders specialize in just trading the order book, they watch and see the orders come in, and they make trades based on what they see in the price action.
When trading the order book, if you see a series of trades come in from a major bank, then can guess that they are trying to hide their position. You can make a profit by just following their trades.One problem with order book trading is that it's very rare to find book order software for forex. This because most retail brokers do not give their customers a direct feed of currency prices and they do not have access to order flow data. There are ECN's and direct bank feeds that offer an order book. This type of trading is one of the most successful forms of scalping there is.
Order book forex trading access: This type of access is known as level 2 access. Level 1 access is what the bulk of retail forex brokers provide. If you ever wanted to know what order book forex trading looks like, then head to you-tube and search for order book trading, and you will find several examples of how traders use the order book to scalp markets.
As a trader, our goal is to get a direct feed from a major bank so that we can be directly tapped into the market. We want to pay commission and not pips to trade, and we want level 2 access. The reason for wanting to pay commission instead of pips is because the ability to scalp the market.
Scalper is trying to make micro-pips and pip based payment plan cut into its profit, and it makes one style of order book forex trading impossible. Order book trading is something that all scalpers or would be scalpers should know about trading forex with retail brokers.
Retail brokers just aren't good for scalpers because they have made it impossible for traders to use this style of trading. The ECN's and direct bank accounts make it easy to scalp using level 2, and you can scalp for less than a pip of profit. I find that this is the most profitable form of scalping there is.
As you can see, the order book is something that is missing from almost all retail brokers. The order book is also known as level 2 access. It is one of the most profitable ways to trade any market, and it's a great tool to use if you scalp the market.
ECN's and direct banks give traders access to this much-needed data. However, the banks, as well as the ECN's, require a much higher deposits, than your standard market maker retail forex broker. Who you choose for an order book forex trading with, should be based on the tools you need.
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