The order book strategy is based on analyzing the supply and demand of an asset in real-time to identify possible price movements before they occur. It focuses on evaluating market depth, support and resistance levels, and potential manipulations by large players (whales).
Key points of the strategy:
1. Analysis of Key Levels:
• Orders are grouped in increments of 100 to identify important liquidity zones (e.g.: 97700, 97800, 97900, 98000).
• Levels with high concentration of orders can act as support or resistance.
2. Detection of Hidden Orders and Spoofing:
• Some large orders may be placed and quickly withdrawn to manipulate the market.
• The persistence of these orders is monitored to differentiate between genuine and false orders.
3. Imbalance between Buyers and Sellers:
• If there are more buy orders than sell orders at a key level, it could indicate bullish pressure.
• If there are more sell orders than buy orders, the price may decline.
4. Tracking the Whales:
• Large orders are identified and their behavior is analyzed.
• If a whale places a large buy order, it may indicate a possible price increase.
5. Entry and Exit Strategy:
• Areas with strong accumulation of orders are sought to enter with lower risk.
• Stops are used in areas where liquidity is low to avoid stop loss hunts.
This strategy is especially useful for scalping and day trading, as it allows anticipating market movements without relying exclusively on traditional technical analysis.
