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?

  1. Enter a limit buy order in the middle of this stacked buying imbalance zone on a retracement.
  2. Place a resting stop-loss order exactly at the single highest price tick of the imbalance zone.
  3. Enter a market sell order immediately, reasoning that the market is now overextended to the upside.
  4. Wait for a horizontal volume peak to form before considering the imbalance zone valid support.

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