By Marco BösingWhat Is Order Flow?
Order flow refers to the stream of buy and sell orders entering and executing at an exchange. Unlike traditional chart indicators that interpret past price movements, order flow analysis reveals the actual trading activity in real time.
Every transaction at an exchange occurs when a market order meets a limit order in the order book. Order flow analysis makes this interaction visible, allowing traders to identify the intentions of large market participants.
Tools such as footprint charts, the volume profile, the order book (DOM), and tape reading form the pillars of order flow analysis. Together, they provide a deep understanding of who is moving the market and why price is developing in a particular direction.