What Is Orderflow?

Hello Traders,

I think many traders don’t understand what makes the market move. Many tend to think that the market moves up or down coz there are more buyers than sellers and vice versa. That’s not true. Understanding Orderflow answers this question.


Order flow is simply a term used in place of transaction flow. It occurs when someone believes the value of a currency will move and then decides to execute an order (transaction) in the market.

The individual may want to be aggressive and execute a market order and pay the spread. That is one potential option.

The other option is for that individual to enter in a limit order or stop order (passively) specifying the order flow or transaction to be executed at a certain price (limit order) or executed after the market hits a certain price (stop loss order). Both are various kinds of order flow.

Now, when it comes to Orderflow Trading you simply MOVE with the transaction flow, when the tide changes, you can see it and all you got to do is adjust accordingly.

Most traders will tell you that Price is the number #1 indicator. Very true, because price does not move because of some magical technical indicators, or a bunch of moving averages combination.

In fact most indicators out there are a derivative of price. So, In order for price to move, market participants need to execute orders- enough orders to consume the liquidity at the best bid/offer.


If no orders are going to be executed, then price is not going to move. That is the hard truth in trading and in orderflow trading.

It’s reffered to as Aggressive Buying & Selling.

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