medium · Order Flow Analysis absorption-exhaustion-imbalance
In Corn futures (ZC), you identify a stacked selling imbalance at 368.00, 367.75, and 367.50 with bid volumes near 500 per level. Typical single-level volume for ZC is 80-150.
How should the position size be adjusted for this setup compared to a standard setup?
- Increase to maximum position size because the absolute volume is 3x to 5x the market's normal level, indicating massive institutional conviction.
- Stay with standard sizing, since stacked selling imbalances in ZC futures are generally considered less statistically reliable than those seen in ES or ZN.
- Decrease position size because unusually high volume concentrated at a single price level often produces increased slippage on entry orders.
- Pass on the trade entirely, as a bid volume of only 500 contracts is too low to represent genuine institutional activity in any liquid futures market today.
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