What is Order Flow Really Telling You?

Hey , In my last email, we talked about why we trade order flow… Just to refresh your memory: We trade order flow because that's what prop firms do. (traditional "old school" prop firms) And because it's incredibly powerful for understanding market dynamics. Now, the next question that should come to any "smart" trader's mind (which I believe you are, since you're here trying to NOT be average) is: "Okay, but what exactly is order flow telling me? And why is it so important?" Here's my answer: Think of order flow like a big, delicious cake. (Stay with me here, I promise this analogy is going somewhere.) The cake represents liquidity in the market. Liquidity is the "fuel" that enables the market to move, but it's not the force that actually drives the movement. That force comes from the market orders that consume the liquidity. Now, imagine the buyers and sellers in the market are hungry party guests. They all want a piece of that liquidity cake. As the buyers and sellers "consume" the liquidity by executing trades, they're essentially taking bites out of the cake. The more aggressive they are, the bigger the bites they take. Order flow allows you to see this consumption happening in real-time. You can watch the buyers and sellers "eating" the liquidity, and observe how their actions impact the price. For example, if you see a lot of aggressive buying (i.e., big bites being taken out of the ask side of the liquidity cake), that's a sign that the market may be ready to move up. The buyers are consuming the available liquidity, and once it's gone, the price will need to move up to find more sellers. On the flip side, if you see a lot of aggressive selling (i.e., big bites being taken out of the bid side of the cake), that's a sign that the market may be ready to move down. So why is this important? Because it gives you a way to anticipate potential price moves before they happen. By watching the order flow, you can see when one side is starting to overpower the other, and position yourself accordingly. It's like being able to see the future... or at least, the very near future. Now, I know what you might be thinking: "But Pete, I don't want to stare at the order book all day like a zombie. I've got a life, you know!" I hear you. That's why learning to read order flow is so important. Once you train your eye to spot the key patterns, you can quickly glance at the order book and get a sense of what's happening. It becomes second nature, like riding a bike. If you're interested in learning more about this, I've got something for you. [We've already put together a video that goes deep into the nitty-gritty of order flow theory.>>]( It's a few years old now, but the principles are still as relevant as ever - in fact, we still have people coming back to watch it time and time again. So, if you want to geek out on order flow with me, give it a watch. I won't promise entertainment, but information like this won't be found even at a price. [Click here to check out the video.]( Keep trading smart, Peter Jigsaw Trading & Journalytix P.S. In my next email, we'll do a walk-through of some order flow scenarios. Trust me, you'll want to be there for that. P.P.S. When you are ready, here are two ways Jigsaw can help you: 1 - CHECK OUR YOUTUBE CHANNEL - Here is a bold claim: we offer way more value in our FREE YouTube videos than these gurus charge for workshops! You can absolutely go from trading newbie to a knowledgeable trader solely from the FREE trading knowledge we put there. [Visit our Youtube channel]( and discover a goldmine of trading knowledge. 2 - ACCESS PROFESSIONAL TRADERS' TOOLS AND EDUCATION - Whenever you’re ready... Here are 3 ways Jigsaw can help you improve your trading: [Three Jigsaw packages… that you can get TODAY so that you can finally get access to the tools and education professionals use to gain an edge in the market…]( Copyright © 2024 Jigsaw Trading, All rights reserved. You are receiving this email because you opted in at www.jigsawtrading.com or www.journalytix.me Our mailing address is: Jigsaw Trading Room 1203, 12/4, Tower 3, China Hong Kong City 33 Canton Road, Tsim Sha TsuiKowloon Hong Kong [Add us to your address book]( Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](.