easy · Order Flow Analysis absorption-exhaustion-imbalance
A trader sees a short signal in the E-mini S&P 500 (ES) but notices that the 10-Year Treasury (ZN) is also showing a strong selling imbalance at its lows.
What should the trader do?
- Be cautious or reduce size, as 'risk-off' assets should typically move opposite to equities.
- Ignore the Treasury market because it is too slow to impact index futures.
- Only trade the Treasury (ZN) because it has higher volume.
- Double the position size because two different markets are showing selling.
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