medium · Order Flow Analysis absorption-exhaustion-imbalance
During a session in Corn futures (ZC), you identify a 3-tick zone where the diagonal ratios of ask volume to the bid volume below are 3.8:1, 4.2:1, and 3.5:1. Price is currently 5 ticks above this zone.
How should a professional order flow trader utilize this information?
- Enter a limit buy order in the middle of this stacked buying imbalance zone on a retracement.
- Place a resting stop-loss order exactly at the single highest price tick of the imbalance zone.
- Enter a market sell order immediately, reasoning that the market is now overextended to the upside.
- Wait for a horizontal volume peak to form before considering the imbalance zone valid support.
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