Order Flow

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  1. Stable resting orders act as a magnet.
  2. Agressive market order breaking into liquidity indicates continuation especially if liquidity is added to opposing side (liquidity flip).
  3. Succesfull breakouts shows liquidity flip meaning S becomes R or vice versa in terms of liquidity.
  4. A healthy up trend shows consecutive HH and HL, when there is a high volume LL and low volume LH, this is a sign of reversal. (similar for down trend)
  5. Reversal hapens when in a swing failure pattern orderflow changes direction and more liquidity added closer and closer to the opposing side.
  6. Stair-step of big and agressive orders towards liquidity that is possibly stable and followed by agressive counter moves indicates spoofing and implies continuation in the direction of last moves (opposide side of the first agressive moves)
  7. In failed breakouts instead of large market orders ice bergs absorb the broken level and rotate the price, this might happen in stop hunts.
  8. Small but inhumanly consistent trading activity in the trend direction indicates continuation due to algorithms.
  9. Layering is defined as creating fake liquidity and pulling back, then reloading further in the trade direction. They passively stay and create magnets, but when it comes to absorbing momentum they step back.
  10. Flip of the Order Book!This is prohibited by CME!: When there is an established trading range, there is consistent liquidity on the boundaries possibly targeting the other end of the range. However, to slip the price into another trading range (not range expansion) they pull back their orders as the price approaches to the boundary and hit with the agressive market orders.

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