What is Order Flow?
Order flow is the real-time stream of buy and sell orders being executed in the market, analyzed to understand the direction and intensity of trading activity and institutional behavior.
Order Flow Explained
Order flow analysis goes deeper than price and volume by examining who is buying and selling, at what prices, and in what quantities. Tools like time and sales, DOM (Depth of Market), and footprint charts help traders see the actual transactions behind price movement. Order flow helps identify when large players are entering or exiting positions.
Real-World Example
A stock is trading at $50 and you see a sudden burst of large buy orders (5,000+ shares each) at $50.05, $50.10, and $50.15. This aggressive buying from large players suggests institutional accumulation, and a trader might join the buying side expecting further upside.
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