hard · Order Flow Analysis absorption-exhaustion-imbalance
A 'Doji' candlestick forms at a resistance level. The footprint shows buying imbalances in the upper wick and stacked selling imbalances in the body.
How does the order flow trader's interpretation differ from a traditional technician?
- Traditional analysis correctly identifies a reversal, while order flow signals consolidation.
- Order flow identifies the Doji as retail noise because delta is near zero.
- Order flow sees an 'unfinished auction' at the high requiring a bullish continuation.
- Order flow sees trapped buyers in the wick being overwhelmed by sellers in the body.
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