easy · Order Flow Analysis absorption-exhaustion-imbalance

Why is a 500-lot stacked selling imbalance in ES considered a 'moderate' signal while the same 500-lot imbalance in Corn (ZC) is considered a 'massive' signal?

  1. Corn futures are dominated by retail traders who cannot handle 500 lots.
  2. Relative volume; 500 lots is near-average for ES but 3-5x the normal single-level volume for Corn.
  3. Corn is a faster market, so volume matters less than price speed.
  4. The tick value of Corn is much higher, making every contract more significant.

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