$DOT What is Order Flow?

In the context of trading, "order flow" refers to a technique of analysis that examines the volume and sequence of buy and sell orders to understand market dynamics and anticipate price movements.

It involves analyzing how orders are executed, identifying support and resistance levels, market liquidity, and potential entry and exit points.

What does order flow analysis imply?

✨Price reading: Allows you to see how buy and sell volumes impact the price and how it reacts to those entries.

✨Level identification: Detects support and resistance levels based on buying and selling activity.

✨Understanding liquidity: Assesses market depth, identifying where there is more or less order activity.

✨Market sentiment analysis: Helps to understand buying and selling pressure, identifying whether there is more interest in buying or selling.

✨Better decision-making: Enables traders to make more informed decisions about market entries and exits.

Tools used in order flow analysis:

🚀Time and Sales: Displays the record of all executed trades, including price, volume, and time.

🚀Footprint: A chart that shows tape information, but organized by price and volume, allowing visualization of order flow at each level.

🚀Order Book: Displays pending buy and sell orders at different price levels.