Trading Strategies
Order Flow Trading
Reading the actual buying and selling hitting the book (DOM, footprint charts, delta) to time entries, instead of relying on price patterns alone.
In plain English
Order flow traders watch how volume trades at each price: aggressive market buys versus sells (delta), absorption where big passive orders soak up attacks, and imbalances that precede moves. Footprint charts and the DOM are the primary instruments.
The style excels at precise entries with tiny stops, which prop drawdowns reward. Its costs are real too: the tooling (order flow platforms, quality data) matters, and the skill floor is high. Firms whose platforms support footprint charting attract this crowd deliberately.
- At a range low, a trader sees sellers hammering the bid while price refuses to drop, with delta deeply negative: absorption.
- They buy with a 6 tick stop under the absorbing level.