Sure thing. I'll try not to blabble as this is a forex forum.
Futures go through a centralized exchange so it enables you to get accurate data on the volumes and number of buy/sell contracts going through at real time (similar to level 2 on stocks). This is visible on what's called a Depth-Of-Market (DOM) - aka, the ladder. I've attached an image I grabbed from google. The numbers in the blue column are the buyers, the numbers in the red column are the sellers.
If anyone reading this doesn't understand order flow: you need to have a buyer in order to sell and vice versa - that's how price moves. If all the sellers at one price dry up, obviously the price will jump up one tick to the next price given that there's a higher supply of buyers than there is sellers. Sounds simple but it happens very quickly in real time. Here's a great video that explains it - especially from 9.10 in.
The way it works is by watching the tape and seeing when excess buyers / sellers come in at a given area (for example, support/resistance) and jumping in the market in anticipation for a few ticks (or using the ladder to time your entry for a swing trade).
Futures contracts are expensive so most tape readers just aim for a few ticks. For example, S&P500 (ticker: ES), is $12.50 per tick. So you can imagine that 4 contracts is $50 per tick and you may get out at 6 ticks = $300. Do that 4 times a day = $1,200 per day. Simple in theory and doesn't sound too bad... until you see it jump 10 ticks against you in a couple of seconds..
I got into it because it looked interesting and even though I ended up being profitable in the end, I did lose a lot of money learning - I'm not afraid t admit that. I would only recommend going into this form of trading if you're able to be awake during high volatility hours, enjoy glaring at a screen, can think quickly.. and have a large amount of equity.
