Order Flow Strategies
Real-time order flow analysis using delta, cumulative delta, footprint charts, and absorption detection for precise entries.
4 Strategy Templates
Order Flow analysis looks beneath price action to the actual market orders being executed. Aggressive buys at the ask versus aggressive sells at the bid, revealing institutional commitment that price charts alone obscure. Tools include Cumulative Delta (running sum of market buys minus sells), footprint charts (per-candle bid/ask volume distribution), and absorption/exhaustion detectors (large orders being absorbed at specific levels without corresponding price movement).
The strategies in this category trade three canonical order-flow patterns. Cumulative Delta Divergence trades setups where price makes a new high but delta fails to confirm, signaling aggressive buyers are exhausting while passive sellers absorb them. Absorption Reversal identifies large delta prints at specific levels where price stalls, typically preceding reversal as the absorbed side eventually fails. Selling Climax Bounce trades the extreme: cascading sell volume spiking to multi-standard-deviation highs, typically exhausting short-term sellers and producing a sharp mean-reversion bounce. Delta Divergence is the generic variant. Order flow requires tick-by-tick data. Not all retail platforms provide it. and works best on high-volume futures (ES, NQ, CL) where bid/ask classification is unambiguous. Applied to stocks in pre-market or thinly-traded instruments, order-flow signals become noisy.
When price makes new highs but cumulative delta diverges (makes lower highs), aggressive sellers are absorbing buy orders. Reversal imminent.
Large limit orders absorb market orders at key levels. When you see massive volume traded at a level with no price movement, a reversal is loading.
Cumulative delta tracks net aggressive buying vs selling over time. When price makes a new high but cumulative delta fails to confirm (divergence), it signals weakening conviction. Aggressive buyers a...
A selling climax is extreme panic selling. Volume spikes to 3-5× average as capitulation unfolds. The following candle's reversal often marks a major low. Trade the bounce after confirmed climactic ex...