Disliked{quote} Well it's not that I have a negative mindset, it's just everyone has a different consensus as to what is order flow and how to look at it. Some say look at futures, DOM. Some say look at forex live for the order updates. But i still don't know how to put it together. I see orders on forex live, so i mark off the zone on my charts, cool, all that means to me is that there are standing bids and offers, I still don't understand how to capitalize on that by looking at price action, I cant visually conceptualize how to trade from a chart cause...Ignored
In the simplest sense it means that someone - whether a person, hedge fund, whatever - has an opinion where price will head and wants to execute a trade. If they want immediacy, they can opt for a market order which removes liquidity from the market. If they want to provide liquidity, they can opt for a limit order (I read Darkstar's book years ago so I'm a little rusty on the microstructure--it's not that important anyway, IMO). This person is providing order flow because they're participating in buying/selling and influencing the price.
Anyway, the art and science of OF trading comes from analyzing the metagame - looking at the order flow of traders that actually move the markets. Trying to figure out what would cause big traders to sell off their positions in droves, or start buying like crazy and drive price up. Small fish like us are in the order flow too, but we don't have the power to move markets so why bother. That's all order flow analysis is.
So you've charted the info on forexlive, but why? The goal is to find a price level that many people are aware of and will gun for. Forexlive is a widely read site so if they post some stops, you can bet people will mark them on their charts. You can do the same by pulling up a daily chart and marking obvious S/R. So this is the first part of the puzzle and fairly straightforward.
The second part of the puzzle is knowing how to actually trade with that info...this is where analyzing the metagame comes in - meaning learning about sentiment analysis, market expectations, scenarios, etc. 99% of this information is foune outside of the charts. You're trying to figure out how to use price action to do that, and that will lead you to a dead end because price action isn't what moves markets - large order flow is.
I would strongly, strongly recommend you check out orderflowforex.com and darkstarforex.com. I'm a member of both.
PS - let me know if I'm rambling...just trying to pass time at work