Orderflow trading, which uses charts displaying interactions between buyers and sellers, is explained. It highlights the dynamics between aggressive (market orders) and passive (limit orders) participants, detailing how their interactions drive price movements. The discussion covers scenarios where market orders are either satisfied by existing bids/asks or cause slippage, and introduces the concept of "path of least resistance," where price movement follows the route with less passive order resistance. The podcast further explains concepts like absorption, aggression, book sweeping, and delta, illustrating how these factors influence trading decisions. Volume profiles, value areas, and low volume nodes are also examined to identify institutional activity and potential trading opportunities.
Part 1: Fundamentals of Orderflow
Part 2: Real-Time Analysis and Mechanics
Part 3: Volume Profile and Auction Theory
Part 4: Practical Application and Execution
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