WHAT IS ORDER FLOW TRADING? – A BEGINNER'S GUIDE

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WHAT IS ORDER FLOW TRADING? A BEGINNER'S GUIDE

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Order flow trading is a relatively new method of
trading. In these years, the futures traders have
been very popular with the attention and favor of
the professional institution. This method of
trading is quite special compared to other
trading methods in the market. Here things happen
with keen attention. The order flow is more
concerned with why these things happen in the
market. About the order flow the first thing you
need to know, it is difficult to understand the
distribution of the volume before the digital
trading era began. It is mainly because the data
provider (vendor) does not provide this
information as well as software technology the
development of network technology What is an
order flow transaction? Order flow trading
itself is not an innovative method in trading
techniques. It has existed since the birth of
modern financial markets it's just that the
original form of expression is very different
from what we see today.  Simply put, the focus
of order flow trading is to observe the trading
trajectory of large institutional traders.
Understanding how institutional orders enter the
market, thus following the trend of the market is
necessary. There are too many variables involved
in financial markets, so much so that when you
use graphical analysis tools to transfer data to
the human brain it is almost impossible to infer
price behaviour from it. And the power of order
flow lies in the fact that you can graphically
present the quantity and price data of long-short
orders (also known as footprints) for the order
flow, making the market more transparent. The
concept of market transparency is a cliché,
though, but the order flow trading strategies do
bring our ideas to life.
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What are the important parameter concepts in the
order flow trading method? Price The imbalance
between supply and demand will lead to price
fluctuations. If the supply is low, demand tends
to increase with price. If the supply is high,
demand tends to decrease, the price will go
down. Volume Volume is the number of trades
within a specific period. This parameter is
closely related to our order flow, can help you
determine whether the supply is low or high. View
long-short orders related to price movements do
they move together or in different directions? If
you start to see the imbalance between supply and
demand, then it's trying to choose the direction,
this means that there is a trading
opportunity. Buy/sell unevenly In addition to
price and volume another factor to consider is
the buy-to-let imbalance. View orders from other
dealers and institutions, you can tell if the
buyer or seller is influencing the price
movement. View meaningful real-time orders, you
can predict the direction of future orders.
Delta Delta refers to the difference between the
active buy and active buy within a single line of
a symbol. Delta can be positive or negative.
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This parameter value plays a key role in
predicting changes in market prices. Compared to
ask and bid in the order flow, when there is an
imbalance in the direction of price movement,
disagreements can arise. By viewing different
long and short orders, you can avoid being
trapped by false fluctuations or illusions. The
chart structure of the order flow The structure
of the order flow chart is easy for us to
understand. Think of it as a single column
horizontal axis, each row represents a minimum
price change (tick). It contains the number of
trades that occurred during the time the candle
was traded and the long single short order (also
known as the footprint). These orders are updated
in real-time provide information on new
transactions made at every moment. If you are
interested in learning the Order flow trading
strategies, then connect with the experts now!
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