In this video, CryptoCred cover’s institutional order flow.
– Problems faced by institutional traders
– Understanding liquidity
– Why price moves to certain areas
– Changing your view of the markets from a retail to an institutional perspective
– Liquidity pools and stop hunts
What is Order Flow?
Taken from TradingProbability
A concept in trading which many claim to understand. Few really do. The order flow of markets is what truly causes price to move.
It can be applied to many aspects of financial markets. There is stop hunting, market microstructure, tape reading, technical analysis patterns and many more.
Without going into too much detail, we must understand first the ‘metagame’.
This can be described as the ‘game within the game’. Going one further, this where player’s/trader’s make decisions not on a basic strategy based on the game’s rules, but based on the other player’s/trader’s decisions.
If you know your competition is going to do the same move over and over, reacting to this and adjusting your strategy would be playing the metagame.
This is an important concept in order flow analysis, due to trading and financial markets being a competition between humans. (This is despite the influx of trading algorithms – humans still program them).
The importance of this snippet is that reading the order flow of markets often depends on your knowledge of what other traders are likely to do. The term ‘weak hand at the table’ springs to mind. This is a poker turn of phrase, which means that the weakest player at the table will be exploited.
You must learn how to spot and where to find the weak hands in the market in order to truly understand order flow. The landscape of market microstructure and the order flow of markets heavily relates to the concept of the metagame.
CryptoCred is a technical trader, analyst and educator within the Crypto Community. His free educational content delivered across multiple platforms has seen him gain an impressive audience over the last couple of years.
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